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  • Apple's Guilty Verdict Lends Big Advantage to Amazon


    As MMi reported Wednesday, a federal judge ruled yesterday that Apple conspired with five major publishers to raise the retail prices of ebooks.

    U.S. District Judge Denise Cote found "compelling evidence" that Apple violated federal antitrust law by playing a "central role" in a conspiracy with the publishers to eliminate retail price competition and raise ebook prices.

    Although Apple plans to appeal the decision, if the ruling ultimately stands, it could lead to "substantial damages" for Apple. And the clear winner will be Amazon, an in-depth report from Bloomberg suggests today.

    “Amazon emerges as the winner from all of the activity related to e-book pricing,” Tom Forte, an analyst at Telsey Advisory Group, tells Bloomberg. “The company seems to be free to price the way it wants to, which, by Amazon’s standards, is aggressively to gain market share.”

    A judge’s ruling that Apple violated U.S. antitrust laws by colluding to increase e-book prices gives retailers such as Amazon added flexibility to sell digital books more cheaply and gain market share. The decision may also lead to greater government oversight of the iPhone maker’s ability to control pricing in other markets, such as music and movies.
    Apple maintains it didn't nothing wrong and never sought to "fix prices" with publishers.

    Source: Bloomberg
    This article was originally published in forum thread: Apple's Guilty Verdict Lends Big Advantage to Amazon started by Michael Essany View original post
    Comments 9 Comments
    1. Dark_Ninja's Avatar
      Dark_Ninja -
      Lol of course Apple is lying!
    1. jOnGarrett's Avatar
      jOnGarrett -
      +1 for Amazon for standing up to bullying
    1. tridley68's Avatar
      tridley68 -
      Quote Originally Posted by Dark_Ninja View Post
      Lol of course Apple is lying!
      sounds like a judge is on Amazons payroll or she just has a hard on for Apple like the rest of them Apple will prevail.
    1. fleurya's Avatar
      fleurya -
      What confuses me most about this case is, isn't Apple on the agency model where publishers set the price at whatever they want and Apple takes 30%? The only other provision is that Apple required the publishers can't sell their books in other outlets lower than they sell in iBooks. So how did Apple fix the price if, contractually, the publishers were free to set the price at whatever they wanted?

      This is a strange case, and depends totally on how you look at it. One way is that Apple is trying to inflate prices. Another is that Amazon, with it's commanding market share, strong-arming publishers with it's commanding market share by forcing prices below what publishers can handle, but they have no choice but to play ball with Amazon. ( similar to what Wal-Mart does with it's suppliers) Either way, it's kinda bad, with all businesses just looking out for themselves. Which is the lesser evil?

      Quote Originally Posted by Dark_Ninja View Post
      Lol of course Apple is lying!
      Amazon is far from an innocent company. They have been known to give away publisher's books for free as part of their monthly free book deal without the permission of the publisher. But what could the publishers do? Kick up a fuss and get kicked out of Amazon? That would be suicide! So they just had to take it up and the tailpipe and let amazon do it. Talk about Bullying! They literally stole from publishers and got away with it!

      Reality is, all huge companies pull this kind of crap. Just look at all the TV makers like Samsung and Panasonic getting into trouble multiple times for price-fixing! So you really shouldn't get too worked up over one company or fall in love with another. They are all out to screw you over for their own interests.
    1. REMED1AL's Avatar
      REMED1AL -
      So now Amazon can go back to losing money on every book, under pricing publisher retail significantly, hurt paperback sales, hurt other businesses who want to offer consumers e-books but can't afford to lose money to do so, and continue acting like the victim.

      On the other side, Apple can;

      - Continue letting publishers price their books and take their 30% but get very little to no business b/c "retail" is suddenly overpriced.
      - Use the Amazon model and lose money to complete and not make their 30% and essentially be giving the e-book a better deal than music labels and app makers.

      This is bad for consumers no matter how you look at it. Amazon essentially eliminates competetion by LOSING MONEY on every sale. No business can validly compete with that type of business model.
    1. steve-z17's Avatar
      steve-z17 -
      Quote Originally Posted by Michael Essany View Post
      Apple maintains it didn't nothing wrong and never sought to "fix prices" with publishers.

      I think you mean, "Apple maintains they did nothing wrong and never sought to "fix prices" with publishers".
    1. vinaygoel2000's Avatar
      vinaygoel2000 -
      Quote Originally Posted by jOnGarrett View Post
      +1 for Amazon for standing up to bullying
      Amazon wasn't even involved in this case. ROTFL.
    1. unison999's Avatar
      unison999 -
      All eBooks needs is a server and some accounting to keep track of sales, print has quite a bit higher cost like paper + ink + glue + trucks + distribution centers + markup at stores etc
      So why should consumer pay same price for eBooks as print? That happened at around the same time Apple came into eBook market. I remember paying same price for my hardcover book as what Apple sold the same eBook. Where is that money going to? Pockets of publishers and Apple.
      Amazon do not lose money on every sale, there is always a profit in business just not as much as Apple would like.
    1. REMED1AL's Avatar
      REMED1AL -
      Quote Originally Posted by unison999 View Post
      All eBooks needs is a server and some accounting to keep track of sales, print has quite a bit higher cost like paper + ink + glue + trucks + distribution centers + markup at stores etc
      So why should consumer pay same price for eBooks as print? That happened at around the same time Apple came into eBook market. I remember paying same price for my hardcover book as what Apple sold the same eBook. Where is that money going to? Pockets of publishers and Apple.
      Amazon do not lose money on every sale, there is always a profit in business just not as much as Apple would like.
      Amazon paid $10 for a book they charged the consumer $9.99. Retail was $12.99 or so and hardcover was priced above e-book retail.

      Yes, Amazon made a business model in which they deny the publisher's retail and go as far as losing money on each book just to keep anyone else from competing with them.

      The cost of an e-book and cost of a hardcover may not be the same however no one is paying for the way they get the content; they are paying for the content. Relating costs to produce to cost of a product is ignorant.