Judge OKs Class Action Suit Against Apple For E-Book Price Fixing 88
An anonymous reader writes "Reuters reports: 'A federal judge in New York granted class certification on Friday to a group of consumers who sued Apple Inc for conspiring with five major publishers to fix e-book prices in violation of antitrust law....The plaintiffs are seeking more than $800 million in damages.' The trial will probably be in July or September. The judge who granted class certification, Denise Cote, ruled in 2013 that Apple was guilty of colluding with other publishers to raise the price of e-books and to force Amazon.com to do the same."
Anybody should be able to open an e-book shop (Score:2, Insightful)
The fact that anybody can't is quite disturbing. Obviously there is a major problem with the system and a class action lawsuit should go forward. The publishers who are forcing DRM and giving discriminatory pricing should be prohibited.
Re: Anybody should be able to open an e-book shop (Score:2, Insightful)
What about the AUTHORS! Seems that greed and corporate collusion has forgotten the actual content creators. Why don't authors self publish, shouldn't be too diffucult with to days technology? Cut out the middle man altogether. But if too many start doing that it'll probably be outlawed.
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I agree that self-publication on the web would probably generally be a good thing for authors and readers, but I can think of a few obstacles:
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As an author with more than 10 self published works for sale on Amazon, you can be sure that I have not sold my soul to the devil (a.k.a. Publishers).
Having tried to sell my works via my own site I can tell you that even with the amazon cut I make a lot more money using them than I did before.
As for the costs to the purchaser? Well two of my books are available at £0.99 anf the highest price is £5.99. Hardly breaking the bank for purchasers. If I printed the book and got it into book stores the
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As an author with more than 10 self published works for sale on Amazon, you can be sure that I have not sold my soul to the devil (a.k.a. Publishers).
No, you sold your soul to Amazon. And without evil Apple they'd still take 65% of the selling price.
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I agree that self-publication on the web would probably generally be a good thing for authors and readers, but I can think of a few obstacles:
Nor is marketing necessary. I don't think I've seen a lot of marketing for books over the years. Sure, one or two here or there. You see more marketing for a single movie than you probably have in your entire life for books.
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Reasonable point, but I suspect there's a lot of value in simply being listed on Amazon.
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Reasonable point, but I suspect there's a lot of value in simply being listed on Amazon.
No, not really. There is so much listed on Amazon that without marketing to get people to click on a link any book or ebook just goes under without a trace. Single celled organism in an ocean kind of a deal. The ability of people to self publish to Amazon has created this ocean.
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-not recommend books I've already bout thru amazon
-allow me to flush existing recommended books and get a new set of recommendations (if its on the list for a month, and I haven't bought it, I'm not going to.
-tag and buy, rather than the atrocity that is one click buy
-multiple accounts per one device, and an easy
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Self publishing *is* difficult - and a lot more work than you think because now the author has to do all the marketing, all the site maintenance, all the accounting, all the everything that isn't writing. Assuming a middle man is nothing but a leech is foolish, in many cases they actually do provide valuable services. Middle men didn't arise just by chance or malfeasance, nor do they pers
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Bingo.
And it wouldn't be hard to deploy ebooks like that either.
Have an open DRM standard for ebooks. Publishers license the ebook shops to distribute those open standard ebooks. Have the standard be something that works on the Nook and the Kindle and whatever else. Its not a big deal.
There after, the publishers won't just be dealing with Amazon. So if some book seller is giving them a hard time they can simply refuse to sell to them and instead be comfortable that enough of their books will sell elsewhere
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if they're price fixing books then what does that mean? Are you suggesting they did it in collusion with the publishers?
If so, then the publishers are party to the conspiracy but they're not named so they weren't.
Which means apple was setting prices for books which is not something they should have a role in doing.
They should instead set their percentage or fee for listing a book and perhaps a per transaction fee per download.
Short of that, they have no reason to care what price publishers or authors charge
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Content distributers rip off the artist and the consumer at the same time. They destroy creativity and resist innovation. Where have I heard this before?
I happened to know a small time author and he distributes through amazon. The price of his ebooks is the same as the price of a real book. Yet amazon pays him less for an ebook sale than a real book. He has no choice in the matter. So he tells everyone to buy the paper copy if they can. Seems like bullshit to me.
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As for your first paragraph, it's simply bias on your part and not at all supported by fact. If they "resist innovation" please tell me how the whole ebook thing took off? It wasn't the indies that spurred it.
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800MM seems impossibly low (Score:5, Insightful)
Anyone you accuse of participating in a cartel should be sued for dissolution, not monetary damages.
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Because they pay judges and politicians a lot of money to make it different.
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Re:800MM seems impossibly low (Score:5, Insightful)
It is a real shame that in the US, your comment is not satire but a reflection of reality. So who will be the Apple political stooges, I guess we will just have to wait and see.
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Because you don't imprison non-violent offenders. They present no real danger. Just confiscate their key to the executive bathroom and take away their parking space. That will put the fear of god into their heathen souls.
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Bernie Maddoff, Jeff Skilling.
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What about 'em? I'd rather see them outside facing the glare of angry eyes. What benefit do we derive from locking them up? It's much better to have have them working at McDonalds so we can garnish their wages.
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perhaps if more join the amount could go up.
The serious problems for Apple will be the conditions of the settlement.
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Pain and Suffering (Score:1)
Re:Pain and Suffering (Score:5, Funny)
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Maybe your class action law suits need to be fixed? I still get my $110 refund for every Fujitsu HDD I return here in Canada.
Legal Action Hasn't Worked (Score:2)
Despite the legal action (and victories) by the DoJ it doesn't seem to me like we've had any price drops to reurn us to the pre-cartel pricing. So apparently these guys get a slap on the wrist and will get to keep the fruits of their bad behaviour?
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Slap on the wrist? I bet any settlement includes the text "Apple admits no wrongdoing".
Compete on Price (Score:5, Informative)
There was no "pre-cartel" pricing. There was only Amazon selling at a loss to drive every other ebook store out of business. They failed to do that, though they have been successful at getting the courts to go after everyone else in retribution.
from http://www.justice.gov/atr/cas... [justice.gov] "On January 27, Jobs launched the iPad. As part of a beautifully orchestrated presentation, he also introduced the iPad’s e-reader capability and the iBookstore. He proudly displayed the names and logos of each Publisher Defendant whose books would populate the iBookstore. To show the ease with which an iTunes customer could buy a book, standing in front of a giant screen displaying his own iPad’s screen, Jobs browsed through his iBooks “bookshelf,” clicked on the “store” button in the upper corner of his e-book shelf display, watched the shelf seamlessly flip to the iBookstore, and purchased one of Hachette’s NYT Bestsellers, Edward M. Kennedy’s memoir, True Compass, for $14.99. With one tap, the e-book was downloaded, and its cover appeared on Jobs’s bookshelf, ready to be opened and read.
When asked by a reporter later that day why people would pay $14.99 in the iBookstore to purchase an e-book that was selling at Amazon for $9.99, Jobs told a reporter, “Well, that won’t be the case.” When the reporter sought to clarify, “You mean you won’t be 14.99 or they won’t be 9.99?” Jobs paused, and with a knowing nod responded, “The price will be the same,” and explained that “Publishers are actually withholding their books from Amazon because they are not happy.” With that statement, Jobs acknowledged his understanding that the Publisher Defendants would now wrest control of pricing from Amazon and raise e-book prices, and that Apple would not have to face any competition from Amazon on price."
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This is a clear example of Fascism in action.
The #1 Bookseller uses the Justice System to guarantee it's success when the marketplace alone does not. I wonder if the Justice Department had an impulse to step in and preserve competition in the marketplace -- or if it went away when money changed hands.
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We're seeing a natural result of a lack of refactoring (;-))
The law in this area is now complex enough that one can easily hold two mutually contradictory opinions with decent precedent for both. That calls for a superior court to disambiguate them, and/or a legislature to set a legislative intent and test.
And yes, this means that antitrust law is suffering from technical debt.
--dave
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Re:Legal Action Hasn't Worked (Score:4, Informative)
Amazon, using its monopoly power in ebooks, kept prices artificially low. When Apple entered the market, Amazon lost some of its monopoly power and publishers used this event to increase eBook prices across the board.
Pricing Artifically Low (Score:5, Informative)
Amazon, using its monopoly power in ebooks, kept prices artificially low. When Apple entered the market, Amazon lost some of its monopoly power and publishers used this event to increase eBook prices across the board.
From http://www.justice.gov/atr/cas... [justice.gov] Page 160 "Amazon screwed it up. It paid the wholesale price for some books, but started selling them below cost at $9.99. The publishers hated that — they thought it would trash their ability to sell hardcover books at $28. So before Apple even got on the scene, some booksellers were starting to withhold books from Amazon. So we told the publishers, “We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.” But we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too. So they went to Amazon and said, “You’re going to sign an agency contract or we’re not going to give you the books.”"
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Thanks for finding the reference for my comment.
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So in this case, the Justice department swoops in to punish the one group preventing Amazon from owning the ebook market as a monopoly.
I love WalMart prices folks, but Amazon was going to own this whole game. WalMart prices go up, you'll notice, in areas where there are no other big competitors. If the #1 Bookseller has cheaper books and doesn't have the Agency Model -- then how the Hell is Apple price fixing?
Apple's prices sucked and most people were not going to buy from them unless they had plenty of mon
Re:Legal Action Hasn't Worked (Score:4, Informative)
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On the other side, Apple was found guilty of conspiring with publishers to make it absolutely impossible for other resellers to sell their books cheaper than Apple. If Apple had just demanded that they got the same or lower price on ebooks as other resellers, then they would have likely escaped litigation.
The situation is quite a bit more nuanced than that, and you've got your basic facts surrounding the case slightly wrong, since what you've stated Apple should have done is exactly what Apple did do. But, strangely, they also did what you said in your first sentence too. The illegal collusion and price fixing that's happened here revolves primarily around the interplay of two otherwise-perfectly-legal ideas: the agency model and most favored nation (MFN) clauses.
Agency Model: The agency model allows the pub
Books vs Apps (Score:2)
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apps are platform specific, books aren't
when you buy an iphone you buy into the platform. why I won't buy an iphone.
It costs more up front, I've only bought unlocked phones.
actually cheaper in the long run.
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Minimum price agreements were widely used in the heyday of CDs. The practice was upheld by courts.
"Minimum Advertised Pricing" not "Miniumum Price" (Score:5, Informative)
Minimum price agreements were widely used in the heyday of CDs. The practice was upheld by courts.
I noticed this gets modded up as fact...the truth is a little more interesting http://www.stereophile.com/new... [stereophile.com] this is an article from 2000 where the Big Five got in trouble with the Federal Trade Commission for "Minimum Advertised Pricing on CDs" where retailers were forbidden to *advertise* CDs below an established minimum. Unlike Apple they had heard of Sherman Antitrust Act
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Unlike CDs, Apple only set a *maximum* price. The eBook publishers were free to set any price they wanted, even $1 a book. The reason prices went up to that maximum is because eBooks were more valuable than the wholesale or lower price Amazon was selling them for.
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To dramatize the immediate increase in the price of e-books that the Publishers could achieve under the Apple agency agreement, and to assure each Publisher Defendant that it was being treated no differently than its competitors, Moerer sent a table of proposed book prices to them in identical e-mails on The Draft Agreement capped e-book prices at $12.99 for New Release titles with hardcover list prices of $30 or under, and set a $14.99 price tier cap for New Release titles with hardcover list prices above $30, with incremental price tier increases for every $5 increase in the hardcover list price above $30. For books other than New Releases, the price cap was set at $9.99. The January 4 term sheet had set a price cap at $14.99 for any book with a hardcover list price above $35, and $12.99 for any hardcover book listed below $35. The Draft Agreement, by contrast, set the demarcation between $12.99 and $14.99 at $30, allowing for higher e-book prices in relation to a title’s hardcover list price. the same day Apple sent out the Draft Agreements. The table showed fiction NYT Bestsellers from every member of the Big Six. It listed the book’s title, author, and publisher. It showed each title’s hardcover list price, followed by its retail prices when sold as an Amazon hardcover book; Amazon e-book; Barnes & Noble e-book; and finally, as a proposed iTunes e-book. The proposed prices under the iTunes column were always either $12.99 or $14.99, and were always several dollars higher than the then-existing e-book price at Amazon and Barnes & Noble. In some cases, the iTunes e-book price was even higher than the Amazon hardcover price.31 Sensitive to the fact that the table looked like an Apple retail price list, Moerer clarified in a follow-up email to Shanks that the prices in the table’s final column designating the “iTunes eBook Retail Price” are the “top price tier we’ve proposed” and that “[i]n the agency model, Penguin would set retail prices at its sole discretion, at this price or any lower price, with Apple acting as your agent.” While the final column would only display Apple’s e-book prices for titles published by the particular Publisher receiving that version of the table, the layout made it easy for the Publishers to see that they were all being treated identically
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The difference is "price fixing” (a specific legal term) only applies when multiple vendors collude to set a price and effectively stifle competition. In the case of a sole vendor there is no competition, so they can legally set whatever price they want; this isn’t “price fixing”.
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I failed to see how this is different?
Perhaps I am missing something?
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So in this case it is apple and multiple publishers colluding?
Well, that is the question. The judge (the same one as in this case) declared that they were before the court case even started. Publishers who were willing to declare in the court that Apple wasn't part of any collusion were not allowed to testify in court. There is no actual evidence of collusion other than the judge's strong belief.
And it would be perfectly legal for Apple to offer the same contract to all publishers and all publishers accepting it, unless they all discuss that between themselves and
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So again, what is he difference on the colluding point?
If someone deals drugs on pain of death it is still a drug deal. The courts may decide to only prosecute the person doing the blackmailing but it does not mean that the charge of dealing drugs is not applicable.
In this case the weight of law for colluding++ should come crashing down atop Apple's head and not a moment too soon. Anti-competitive practices should not be allowed in a free mar
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How anyone got in trouble over moving to the Agency model (which is perfectly legal) while Amazon got off scott free for doing what everyone acknowledges was dumping (and to top it off, getting the courts to claim the *dumping* price to be the fair cost of goods) is a fucking travesty.
The judgement showed that Amazon's ebook division was profitable. Ergo, it's not dumping despite what you think "everyone" agrees.
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Re:Cote did her job (Score:2)
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Lets see what happens on appeal then ... of course if Apple loses it you'll just declare the next judge prejudiced as well.
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Lets see what happens on appeal then ... of course if Apple loses it you'll just declare the next judge prejudiced as well.
Which just makes sense, because it is the same judge again. And this time, the judge would have to either judge against Apple or against her own previous judgement, so she effectively has to be prejudiced.
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Sympathy (Score:1)
I don't have any.
Litigation hurting them is a positive in my mind. However, they probably won't get fined enough money to really hurt them.