Apple fixes eBook prices

[dalebert]

Before you label this as government interfering in the free market, remember that they opened the Pandora's box with Copyright and DRM or this wouldn't even be an issue.

http://www.theverge.com/2013/7/10/4510338/apple-found-guilty-of-ebook-price-fixing

[Jim Johnson]

People would be attempting that shenanigan in any type market, regardless of if it were completely free or completely controlled.

[KBCraig]

The irony is that Apple's "fixed" prices, which were ruled anti-competitive, were lower than Amazon or B&N.

Apple brought competitive pricing to the marketplace, and got slammed for it.

[dalebert]

The irony is that Apple's "fixed" prices, which were ruled anti-competitive, were lower than Amazon or B&N.

Apple brought competitive pricing to the marketplace, and got slammed for it.

Not according to the article. The claim is they were trying to fix prices $3 to $5 above what Amazon is charging.

http://www.reddit.com/r/technology/comments/1jki1k/apple_faces_5year_ban_for_ebook_price_rigging/

[KBCraig]

The irony is that Apple's "fixed" prices, which were ruled anti-competitive, were lower than Amazon or B&N.

Apple brought competitive pricing to the marketplace, and got slammed for it.

Not according to the article. The claim is they were trying to fix prices $3 to $5 above what Amazon is charging.

Apple let publishers set prices and was guilty of price fixing, but Amazon's products all sold for the same price and they were the victim? Despite a larger market share?

[dalebert]

Apple let publishers set prices and was guilty of price fixing, but Amazon's products all sold for the same price and they were the victim? Despite a larger market share?

I'm not following how your coming to these conclusions. These two articles are all I have to go on. If you've been following this through other articles or something, maybe you could link them.

[KBCraig]

Apple let publishers set prices and was guilty of price fixing, but Amazon's products all sold for the same price and they were the victim? Despite a larger market share?

I'm not following how your coming to these conclusions. These two articles are all I have to go on. If you've been following this through other articles or something, maybe you could link them.

From the first: "The Department of Justice accused the companies of banding together to keep ebooks above Amazon's rock-bottom discounts and chip away at its Kindle-fueled runaway lead in the ebook market. To do so, they relied on an agency model, which allowed publishers — not retailers — to set prices."

The publishers set the prices, not Apple. Now, it seems likely that Apple convinced them where to set the prices, but the publishers were not bound in any way to do so. But, most of them did go with the higher prices, and brought more titles to the ebook marketplace.

Meanwhile, Amazon set all prices the same. This resulted in less availability, since some publishers refused to sell at that price.

Which one actually fixed prices?

If Apple had set all prices at $8.99, Amazon would have ironically screamed anti-trust. Apple didn't set prices at all, and Amazon still screamed anti-trust.

As for the second link... well, a reddit link is like throwing the internet at someone and saying, "See, isn't it obvious?"

[dalebert]

As for the second link... well, a reddit link is like throwing the internet at someone and saying, "See, isn't it obvious?"

Sorry. That's how I discovered the article and it imposed an extra click. Here's the article linked at reddit.

http://www.nbcnews.com/business/apple-faces-5-year-ban-e-book-price-rigging-conspiracy-6C10825035

[Viscid]

http://www.nationaljournal.com/tech/how-apple-tried-to-turn-the-e-book-industry-against-amazon-and-lost-20130710

[KBCraig]

http://www.nationaljournal.com/tech/how-apple-tried-to-turn-the-e-book-industry-against-amazon-and-lost-20130710

See, there's a good example of the two-faced nature of the process.

I'm not defending Apple's plans nor methods, but if they had done exactly what Amazon did, they'd be accused of predatory pricing by selling ebooks at a loss in order sell more hardware -- and as the bigger, richer company, they'd still lose.

That link even explains that Apple's prices were not higher than Amazon's for the same title: the agreement with publishers required their prices be set at not more than the competition.

I don't have a dog in this. I don't buy major title ebooks, at all. I refuse to pay almost hardcover list price for ebooks, where the publisher has almost no distribution costs and a fraction of the risk.

[dalebert]

With Amazon's aggressive pricing, the publishers reasoned, the Internet company might grow so powerful it could drive down prices for all books, even the hardcovers sold in mom-and-pop stores. Amazon might even begin to negotiate directly with authors and cut out the publishing houses altogether.

Ahhhh. So Apple is actually rescuing the world from a company that might become a monopoly because their prices are too good. And the way they can do this, ironically, is because they're big enough to pressure the publishers into ending their agreements with Amazon that allow Amazon to sell books so cheaply.

The only way any of this can even be an issue is based on the artificial scarcity maintained by copyright laws.

[dalebert]

The irony is that Apple's "fixed" prices, which were ruled anti-competitive, were lower than Amazon or B&N.

No. At best they were as low as.

Apple brought competitive pricing to the marketplace, and got slammed for it.

I still don't see any evidence for this claim. They applied tremendous pressure on the publishers to end their wholesale agreements with Amazon thereby ending their ability to offer the books so cheaply to customers.

Apple let publishers set prices and was guilty of price fixing, but Amazon's products all sold for the same price and they were the victim? Despite a larger market share?

No they didn't. Their agreement capped the price publishers could charge at the lowest price anyone was charging, i.e. at Amazon's price. Amazon could charge those prices because they worked out wholesale deals--I presume buying lots of licenses to a book in bulk and handing over a big wad of cash to the publishers up front. Apple's deal required publishers to cap their prices at whatever Amazon charged and expected the publishers to eat the losses, thereby putting tremendous pressure on them to stop making wholesale deals with Amazon so they could THEN actually raise their prices.

Meanwhile, Amazon set all prices the same. This resulted in less availability, since some publishers refused to sell at that price.

Amazon's prices aren't all the same. I don't know where you're getting that either. They had a lot of cheap deals when they were able to work out wholesale buys with the publishers. They have plenty of books that cost more than that, presumably because they weren't able, or interested in, working out wholesale deals on those books. Maybe they just weren't big enough sellers to warrant taking on the risk that they might not all sell. Amazon sells plenty of books for more. I don't know of them turning anyone away because they wouldn't lower their price arbitrarily. I don't know of any books that are not on the market at all because Amazon chose not to sell them. I need to know where you got the information to explain such a claim.