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Judge Approves Settlement In eBook Price-Fixing Case 242

An anonymous reader writes "On Thursday a U.S. District Judge approved a settlement between the Department of Justice and three publishers accused to colluding to inflate ebook prices (order). 'The Justice Department had accused Apple and five publishers in April of illegally colluding on prices as part of an effort to fight internet retailer Amazon.com Inc's dominance of e-books. The publishers who agreed to settle are News Corp's HarperCollins Publishers Inc, CBS Corp's Simon & Schuster Inc and Lagardere SCA's Hachette Book Group. Apple; Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH; and Pearson Plc's Penguin Group have vowed to fight the Justice Department's lawsuit with a trial due to start on June 3 next year.' The decision came after a lengthy period of public comment. According to the AP, 'The ruling released Thursday cast aside the strident objections of Apple, other book publishers, book sellers and authors who argued the settlement will empower Internet retailing giant Amazon.com Inc. to destroy the "literary ecosystem" with rampant discounting that most competitors can't afford to match. Those worries were repeatedly raised in court filings about the settlement. More than 90 percent of the 868 public comments about the settlement opposed the agreement.'"
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Judge Approves Settlement In eBook Price-Fixing Case

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  • below cost? (Score:5, Insightful)

    by gl4ss ( 559668 ) on Friday September 07, 2012 @10:16AM (#41259795) Homepage Journal

    how do you sell an ebook copy at "below cost"? that implies that amazon paid authors out of their own pocket? is this right?

    (because, in the sw world.. amazon actually makes the author accept zero payment for the privilidge of amazon giving the sw away as promotion)

  • by hawguy ( 1600213 ) on Friday September 07, 2012 @10:33AM (#41260001)

    I, for one, hope this results in lower eBook prices.

    I have a Kindle (and Nook tablet) that are underutilized because I refuse to pay more for an eBook than I do to have a paper book delivered to my house. About the only eBooks I read are from Smashwords [smashwords.com] or Baen [baen.com]. Almost every book I've bought from Amazon has been a used paper book because they are typically about half the price of an eBook.

    After 2 years with the Kindle, I've bought exactly 3 Amazon eBooks - all purchased before traveling since I didn't want to carry around heavy paper books. I've never gotten around to reselling my used books (which would net me another dollar or two of savings), so my local thrift shop has been getting them.

  • Re:below cost? (Score:5, Insightful)

    by jandrese ( 485 ) <kensama@vt.edu> on Friday September 07, 2012 @10:33AM (#41260005) Homepage Journal
    As I understand it, the books aren't actually "below cost", they're just below what the Publisher charges for their own version of the same ebooks. Amazon can't really afford to sell the books below cost because books are their primary business, especially on the Kindle. You can't make your biggest income source a loss leader for long. This sounds a lot like publishers going "mah profits!!!" because they thought they finally had a way to destroy the secondary market with ebooks and get everybody to pay retail again but then Amazon came along and wrecked their plans by selling below MSRP.
  • Re:below cost? (Score:4, Insightful)

    by RenderSeven ( 938535 ) on Friday September 07, 2012 @10:33AM (#41260009)

    how do you sell an ebook copy at "below cost"

    The problem is they are selling it below Apple's cost. According to Apple no one should be allowed to undercut Apple, and they have lawyers to prove it.

  • by medelliadegray ( 705137 ) on Friday September 07, 2012 @10:35AM (#41260015)

    I am getting pretty annoyed how so many companies are being settled with for legal issues, at cost of a mere pittance to these companies.

    I want to see the ban hammer come down and come down hard on these guys. If i break the law with something as simple as a parking ticket, that is a substantial cost to me. if I were to break the law in something major it screws me for life. Why is this not being applied to corporations?

    Price fixing? confiscate ALL past profits gained from of the fixing, and fine future profits as an exponential multiplier of the fixing revenue. not to mention jail time for the crooks who okay the fixing. make companies leave yellow piddle marks when people even suggest they could be price fixing, colluding, bribery.

  • by aristotle-dude ( 626586 ) on Friday September 07, 2012 @10:49AM (#41260115)

    Do you realize that the agency model was designed to allow for publishers to set the prices thereby removing the power from the distributor/seller and to disrupt Amazon's monopoly?

    Amazon could, at first, offer lower prices to the consumer until they wiped out the competition but once they were supreme, they could jack up the prices or try to gouge the publishers/authors for lower wholesale prices with threats to not carry their books in the future.

    You seriously should not be happy with a monopoly of the justice department enforcing a return to a monopoly. The market should be allowed to decide. If a book does not sell well, the market forces should cause the publisher to lower the sale price until it does sell.

    Amazon, in the digital space, and Wal-mart in the brick and mortar space, were actively using predatory pricing to squeeze out all of the other competition. That situation is not good for the consumer in the long run.

  • by geek ( 5680 ) on Friday September 07, 2012 @10:55AM (#41260165)

    Do you realize that the agency model was designed to allow for publishers to set the prices thereby removing the power from the distributor/seller and to disrupt Amazon's monopoly?

    So instead of Amazon having a monopoly the publishers get one. Your logic fails. Having a monopoly isn't illegal either. Abusing that monopoly is. Amazon never attempted to stop others from selling anything.

  • by bdam ( 1774922 ) on Friday September 07, 2012 @11:13AM (#41260393)
    Monopoly ... mono ... kind of indicates the singular so I don't see how multiple publishers can have a singular monopoly. Certainly, the big 5 can be dickish but there are hundreds if not thousands of smaller publishers out there; I work for one. I would consider dumping product as an abuse of a monopoly and Amazon had done just that with our books in the past and there's no reason they won't do so in the future to further cement their monopoly in online physical book sales and e-books via the Kindle.
  • Re:below cost? (Score:5, Insightful)

    by Beetle B. ( 516615 ) <beetle_b@@@email...com> on Friday September 07, 2012 @11:32AM (#41260637)

    Of course, the smart publisher would not sell a license to Amazon. Perhaps it's because my knowledge of the matter is admittedly incomplete, but I fail to see what leg these publishers have to stand on, considering.

    Your so-called smart publisher would not value his brains when he has to shut down as a result.

    Amazon has a huge edge on ebook sales - ask any publisher how many of their ebooks are sold on Amazon vs all other venues combined.

    People don't go for the best products on the market. Everyone I know other than myself bought a Kindle instead of better alternatives. Their argument always was: "Oh, your device may be better, but Amazon has the largest selection."

    "OK, what ebooks do you want that can only be bought at Amazon?"

    No answer. Because there aren't any. Sure Amazon really does have a larger selection, but no one I personally know wants any of the exclusively Amazon ebooks anyway.

    But would a consumer do that analysis? No. Not even when it's pointed out to them before they buy.

    Guess how many of these Kindle owners buy ebooks from anywhere other than Amazon?


    So yeah, a publisher can say, "Nah, we won't sell on Amazon" to which Jeff Bezos will throw some change their way saying "Here're some pennies for when you become homeless."

  • Re:below cost? (Score:4, Insightful)

    by jkflying ( 2190798 ) on Friday September 07, 2012 @11:34AM (#41260669)

    Then why don't you just buy a whole bunch of your books from them? It would be like a direct cash transfer from Amazon's bank account into yours...

  • by bdam ( 1774922 ) on Friday September 07, 2012 @12:25PM (#41261339)

    So, you'll be replaced with lighter, more flexible, more competitive entities that do "editing, promoting, designing, and selling" and focus on competitive digital distribution.

    The OP suggests that publishing model is obsolete and good riddance with publishers. So what he is suggesting is to get rid of publishers who take manuscripts, process them, and deliver them to market. You then suggest they be replaced with entities that do the same thing. The entities you describe already exist and they have a name: publishers. Will they have to adapt to the market? Yes,and those that hope to survive must. Would the market be better off if there were no publishers willing to risk author advances, process manuscripts, and deliver them to the market? I believe so, yes.

  • Re:below cost? (Score:4, Insightful)

    by bws111 ( 1216812 ) on Friday September 07, 2012 @01:40PM (#41262757)

    No, this is not true. Amazon may well say (to the publishers) 'nobody can buy books cheaper than the price Amazon' gets. Apple, on the other hand, says 'nobody can SELL books cheaper than Apple can'. Those are two vastly different things.

    Even if nobody can get a better deal than Amazon, they can still sell them for the same or lower price than Amazon. In fact, that is what the publishers are complaining about Amazon doing to them. That, however, is competition, and results in lower prices for the consumer.

    Apple's deal, on the other hand, says that nobody can SELL books for a lower price than Apple. Nobody even has the opportunity to use the books as a loss leader. That is anti-competitive behavior, and results in higher prices for consumers.

Karl's version of Parkinson's Law: Work expands to exceed the time alloted it.