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(Tom's Guide)   Looks like Apple may want to bone up on the Chewbacca defense   (tomsguide.com ) divider line
    More: Interesting, Chewbacca defense, Penguin Group, Macmillan, Hachette Book Group, worst case  
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2423 clicks; posted to Business » on 25 May 2013 at 8:58 AM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-05-25 02:16:24 AM  
Looks like they should buy themselves some judges and senators, like Samsung did.
 
2013-05-25 02:39:31 AM  
Conspiracy thread!
 
2013-05-25 09:17:01 AM  
Who is their tax accountant? Bono?
 
2013-05-25 09:25:31 AM  
Chewbacca defense? Does that mean they are looking to pull Droids' arms out of their sockets?
 
2013-05-25 09:35:29 AM  
Last I checked, Apple's contribution to this "conspiracy" was saying, "Hey, we're going to go with the agency model, but if you want us to do that, you can't undercut us on price anywhere else."

Which, honestly, the agency model  makes sense for ebooks. Amazon hates the idea, of course, since they can make a lot more money (and manipulate prices better) using the wholesale model.
 
2013-05-25 09:57:59 AM  
Naturally Apple doesn't share the same opinion. In fact, the company still doesn't think it's done anything wrong

Doesn't every collude with each other to set prices?
 
2013-05-25 09:58:39 AM  

t3knomanser: Last I checked, Apple's contribution to this "conspiracy" was saying, "Hey, we're going to go with the agency model, but if you want us to do that, you can't undercut us on price anywhere else."

Which, honestly, the agency model  makes sense for ebooks. Amazon hates the idea, of course, since they can make a lot more money (and manipulate prices better) using the wholesale model.


In other words, collude with us to raise prices.
 
2013-05-25 10:09:28 AM  

Marcus Aurelius: In other words, collude with us to raise prices.


I don't see it. I recognize that I have only the vaguest understanding of anti-trust rules, but I have a hard time seeing, "We'll act as your agent, under the condition that you sell for the same price here that you sell anywhere else," as "collusion to raise prices".

Apple isn't setting prices- the publishers are. Apple allows the publisher to set any price they want- but Apple will refuse to act as their agent if it isn't as good or better than other prices for the same good. The impact is that it gives the publishers more leverage over Amazon so that Amazon can't sell their products as loss leaders to drive more traffic, which means prices will go up, on average. But Amazon's the real distortion in the market- they have enough market power that they have completely distorted the price of ebooks.
 
2013-05-25 10:10:17 AM  

Marcus Aurelius: t3knomanser: Last I checked, Apple's contribution to this "conspiracy" was saying, "Hey, we're going to go with the agency model, but if you want us to do that, you can't undercut us on price anywhere else."

Which, honestly, the agency model  makes sense for ebooks. Amazon hates the idea, of course, since they can make a lot more money (and manipulate prices better) using the wholesale model.

In other words, collude with us to raise prices.


In other words, contractually-obligated pricing practices.
 
2013-05-25 10:17:58 AM  
Alright Fark law-talkers and GED holders; can you explain something to me?

Why would a judge "glimpse" at the evidence, say it's strong circumstantial evidence, and issue an early opinion? Isn't circumstantial evidence generally considered weak at best, or is it different for civil trials? Doesn't giving an early opinion show bias before the trial?

Is it merely a business-friendly way to let the defense know that a plea bargain or deal would be a good thing at this point?
 
2013-05-25 10:22:45 AM  

t3knomanser: Marcus Aurelius: In other words, collude with us to raise prices.

I don't see it. I recognize that I have only the vaguest understanding of anti-trust rules, but I have a hard time seeing, "We'll act as your agent, under the condition that you sell for the same price here that you sell anywhere else," as "collusion to raise prices".

Apple isn't setting prices- the publishers are. Apple allows the publisher to set any price they want- but Apple will refuse to act as their agent if it isn't as good or better than other prices for the same good. The impact is that it gives the publishers more leverage over Amazon so that Amazon can't sell their products as loss leaders to drive more traffic, which means prices will go up, on average. But Amazon's the real distortion in the market- they have enough market power that they have completely distorted the price of ebooks.


How is what you described that NOT colluding to raise prices? This case seems like a slam dunk for the DOJ and that is probably why every publisher settled instead of going to court.

The Judges comments the other day sending apple fans into an apoplectic fix was funny to watch.
 
2013-05-25 10:22:52 AM  

skrame: or is it different for civil trials?


It's very different for civil cases.

skrame: Doesn't giving an early opinion show bias before the trial?


It's almost certainly not going to trial, but even so- the job of the judge is to administer the proceedings and discuss matters of law with the lawyers. A judge needs to be frank about what his reading of the evidence thus far is.

It's different in the cases where you have a jury trial, and have to worry about tainting the jury.
 
2013-05-25 10:34:52 AM  

Carth: How is what you described that NOT colluding to raise prices?


Because Apple is not a publisher. They're an agent acting for publishers. Apple will only act as that agent under certain contractual obligations- what's commonly known as a "most favored nation" clause, which is common in  wholesale contracts as well. Amazon almost certainly has that in their agreements with publishers (in short, Amazon won't buy books unless they're given the lowest wholesale price).

We can flip this around, and demonstrate how this is built to drive prices  down and not up. If Amazon tries to undercut Apple on price, the publisher must lower the price of the book in the Apple store. Since the publisher has no control at  all over how Amazon prices books, this should mean lower prices for everyone.

The reality is that publishers  would like to use this as leverage to get Amazon pricing books closer to the RPP they provide. But Amazon is free to set its own prices, and there's farkall the publishers can do about it.

And regardless- it's not price fixing that's really at issue. The collusion, now that I've read up more deeply on the subject, is not over "raising prices". The collusion is that Apple revealed to each publisher that they were reaching the same agreement with all of the other publishers. Which still strikes me as absurd, since Apple basically publishes their terms for acting as an agent publicly, but whatever.

So it goes like this:
Apple tells the publishers that they all get the same deal, and it won't negotiate separate terms for any publisher.
The DOJ claims that the publishers would never have gone to the agency model without this collusion.
The DOJ claims that this removes the ability of retailers to compete on price with agents, since agents are guaranteed a price match.
The DOJ claims that this drove prices up.

Now, I'm just operating in common sense land, but I still don't see the problem with what Apple did. Though, to be fair, I've always disliked the wholesale model for books. It's wasteful, and never even worked well with the brick-and-mortar stores. It's an absurdity when you get to ebooks.
 
2013-05-25 12:04:16 PM  
As an Amazon Marketplace Dealer I could use some collusion to raise prices. farkers zero out their prices "to be competitive" and NO ONE makes any money. farking morons.
 
2013-05-25 01:16:25 PM  
This isn't collusion, it's competition.

Apple offered a better deal, and publishers took it.

There is literally nothing to see here.
 
2013-05-25 01:34:42 PM  

TheZorker: This isn't collusion, it's competition.

Apple offered a better deal, and publishers took it.

There is literally nothing to see here.


You say that, but seeing as how most of the publishers folded pretty quickly, one can assume that they acknowledged wrongdoing...or at the very least, that a good argument could be made for it.

I must say that my opinion is a bit biased...as I would like nothing better than to see Apple burn to the ground.
 
2013-05-25 01:54:43 PM  
Chewbacca Defense?  I did it all for the wookie?
 
2013-05-25 02:47:38 PM  

t3knomanser: We can flip this around, and demonstrate how this is built to drive prices  down and not up. If Amazon tries to undercut Apple on price, the publisher must lower the price of the book in the Apple store. Since the publisher has no control at  all over how Amazon prices books, this should mean lower prices for everyone.


No, you can't, because that isn't what happened.   The publishers forced everyone into an agency model and then colluded to raise prices.  With the agency model, the publisher DOES have control over how Amazon prices books.  THAT's what happened.  In under four months, the price of ebooks rose by 30%.
 
2013-05-25 06:57:49 PM  

Lsherm: The publishers forced everyone into an agency model and then colluded to raise prices.


I thought Amazon was still mostly wholesale. Whatever, it's not really important to my point: Apple didn't participate in that. The  publishers are settling out of court for good reason: they were engaged in price fixing. Apple's contribution to the conspiracy is that Apple informed all of the publishers that they were all getting the same deal from Apple. Because they all knew they were getting the same deal, their price-fixing plan could go forward- essentially Apple resolved the prisoner's dilemma that would otherwise have kept them on the wholesale model.
 
2013-05-25 07:51:34 PM  

t3knomanser: Lsherm: The publishers forced everyone into an agency model and then colluded to raise prices.

I thought Amazon was still mostly wholesale. Whatever, it's not really important to my point: Apple didn't participate in that. The  publishers are settling out of court for good reason: they were engaged in price fixing. Apple's contribution to the conspiracy is that Apple informed all of the publishers that they were all getting the same deal from Apple. Because they all knew they were getting the same deal, their price-fixing plan could go forward- essentially Apple resolved the prisoner's dilemma that would otherwise have kept them on the wholesale model.


The whole deal wouldn't work without Apple's cooperation. Only the threat of jumping ship to Apple, with the market penetration of iPads and phones, was significant enough to force Amazon into accepting the model. So it wasn't just a matter of information. Apple provided the whole platform that made the price fixing deal possible, and did so with full knowledge of the crime. The publishers may be more culpable, I don't know, but it's still a big deal regardless.
 
2013-05-25 08:57:35 PM  

Johnsnownw: TheZorker: This isn't collusion, it's competition.

Apple offered a better deal, and publishers took it.

There is literally nothing to see here.

You say that, but seeing as how most of the publishers folded pretty quickly, one can assume that they acknowledged wrongdoing...or at the very least, that a good argument could be made for it.

I must say that my opinion is a bit biased...as I would like nothing better than to see Apple burn to the ground.


What flavor was the Kool-Aid the day they got you, you worthless brainwashed sack of shiat?
 
2013-05-25 09:19:11 PM  

wraith95: Apple provided the whole platform that made the price fixing deal possible, and did so with full knowledge of the crime.


But Apple was acting in their own interests, and would have acted the same whether or not any price fixing was going on. I mean, Apple uses the exact same model for their App Store ecosystem, including the amount they take as a cut. Apple wanted to get into selling books, so Apple got into selling books using the same engine they use for selling apps.

The fact that Apple entered the market as a viable competitor to Amazon, which gave the publishers leverage to negotiate terms they preferred with Amazon, strikes me as how the market is supposed to work. Again, the problem is that the publishers decided, as a group, to work together to ensure this happened. Had the publishers been acting independently, there was the potential for a prisoner's dilemma scenario, where one or more defectors could have ruined the plan.

I guess the real problem is: to what degree is Apple responsible for the actions of the publishers? Apple wasn't going to go into the wholesale book business. It doesn't jive with their model. The only way Apple could have gotten into ebooks was through agency. To succeed in the market as an agent, Apple needs to be transparent about the deal it gives to its clients, and clients need good confidence that they're getting a fair deal which is the same as all the other clients. In this case, Apple was entering a distorted market run by a monopoly, so their clients were interested in using Apple's entry as a weapon against Amazon.

I just fail to see what Apple could have done differently in this situation.
 
2013-05-25 10:07:37 PM  

t3knomanser: I guess the real problem is: to what degree is Apple responsible for the actions of the publishers? Apple wasn't going to go into the wholesale book business. It doesn't jive with their model. The only way Apple could have gotten into ebooks was through agency. To succeed in the market as an agent, Apple needs to be transparent about the deal it gives to its clients, and clients need good confidence that they're getting a fair deal which is the same as all the other clients. In this case, Apple was entering a distorted market run by a monopoly, so their clients were interested in using Apple's entry as a weapon against Amazon.


Apple's culpability came when Jobs worked with all five publishers to set the prices for books across the board.  They didn't just have an agency model - Jobs demanded that the price of the books sold through Apple (book price + Apple's 30% cut) was the lowest price a book could be sold anywhere at any time. Not only that, but Apple worked with the publishers to set a price point that not only garnered the publishers more money for their books but also made sure Apple's cut was significant.  DOJ has email from Jobs admitting that ebooks would go up in price and hurt the consumer, but that's what the publishers wanted anyway.

So say you're Amazon and you've been forced into the agency model.  You want to sell your books cheaper so people will purchase through your store and not Apple - well, you can't do that.  The publishers just raise the price on their end so the total cost is the same as what you get from Apple's store.

So, what happened is typical when you have collusion among suppliers and distributers:  prices went up almost immediately.  It's the only thing that could happen, since Apple set the floor price of ebooks with cooperation from the publishers.  If they had only set up an agency model they'd be in the clear - it was their demand that ebooks couldn't be sold cheaper anywhere else that landed them in hot water.  If Amazon had been free to set up an agency model with, say, a 10% cut instead of Apple's 30%, then they might be free and clear.  But they didn't, so here they are.

I hope they go to trial and get spanked.
 
2013-05-26 12:13:32 AM  

bingethinker: Johnsnownw: TheZorker: This isn't collusion, it's competition.

Apple offered a better deal, and publishers took it.

There is literally nothing to see here.

You say that, but seeing as how most of the publishers folded pretty quickly, one can assume that they acknowledged wrongdoing...or at the very least, that a good argument could be made for it.

I must say that my opinion is a bit biased...as I would like nothing better than to see Apple burn to the ground.

What flavor was the Kool-Aid the day they got you, you worthless brainwashed sack of shiat?


The irony in this would be humorous if it weren't so sad. Let everyone know when you move out of your mom's basement and realize that Apple isn't a perfect company that makes unicorns that fart rainbows, and then we'll be happy to talk to you. In the meantime, you just sound really, really stupid.
 
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