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deesy58
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Re: American Booksellers Association, Barnes & Noble to weigh in on Apple ebooks case


frantastk wrote:

If, as you say, the agency model itself is illegal, then why do you think they did not file suit against Random House or Smashwords or any other publishers using the agency model pricing? The DOJ only went after the 5 publishers and Apple that are involved in the alleged collusion. And, from what I've read of the proposed settlement with the 3 publishers that have decided to settle, they may go back to using agency pricing individually after a term of 2 years (it might be 3 years, I can't rememebr the exact time frame). If agency pricing itself is illegal, they would not be allowed to do that. From everything I have read about the case, it is the collusion of all the publishers involved and Apple that is illegal. If each publisher had come to the agency model on their own, and negotiated contracts for agency model pricing independent of what the others had done it would not be illegal. Publishing and e-books are not the only industry where agency model pricing contracts happen. As far as I know, the DOJ is not going after every company using agency pricing.

Agency pricing, per se, is not illegal, as was pointed out in the case of real estate brokers, insurance brokers, and automobile dealers.  If, however, it is established solely for the purposes of controlling retail prices and ensuring profits, and if it is done in a manner that restrains trade, then it violates the Sherman Act. 

 

Note that buyers are able to negotiate final purchase prices even when dealing with an agent in the case of real estate, insurance, autos, etc.  Note also the words of the defendant employees and the DOJ in the body of the suit.  It was acknowledged that the model would not work unless everybody (most publishers) participated. 

 

Even if an individual publisher were allowed to re-establish an "agency" model of doing business within two or five years after the Court formally accepts an out-of-court settlement, that publisher would be at such a severe disadvantage compared to those that retained the Wholesale Model that their profitability would probably suffer. 

 

It is the fact that the publishers colluded (with or without Apple) that makes this particular case illegal.  The agreement was made primarily to benefit Apple, which has not agreed to settle, as I understand it.  How, then, could Apple become part of any future "Agency Model" agreement without colluding all over again?  What would tempt a publisher to try to re-establish such a pricing and business model, especially if it would risk the wrath of Amazon if it did so? 

 

We'll have to wait and see, of course.  However, it appears that these parties will be watched closely by the DOJ, and by their competitors.  Unless they want to spend the rest of their careers in courts, the executives of the defendant companies will have to tread carefully in the future, IMO. 

 

It's really great to own a business in which profits are guaranteed, regardless of the ineffectiveness of its management or business model.  Such businesses are called monopolies, and they are, generally, illegal in the US, or are regulated by governmental agencies (electric, gas and water utilities come to mind).  If one or two publishers returns to agency pricing, I don't think that could be considered a monopoly. 

 

By offering to settle, those three publishers have acknowledged that they broke the law.  Their actions presumably damaged Amazon, and a great many consumers.  Will the door now open for "class action" lawsuits?

 

Has anybody thought about the possibility that Amazon could now sue those publishers and Apple for actual and punitive damages after the DOJ suit is resolved?  Could the whole notion of agency pricing become so distasteful that we might never see it again in the world of e-book publishing?  Food for thought.

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BearLion
Posts: 92
Registered: ‎02-10-2011

Re: American Booksellers Association, Barnes & Noble to weigh in on Apple ebooks case


deesy58 wrote:

frantastk wrote:

If, as you say, the agency model itself is illegal, then why do you think they did not file suit against Random House or Smashwords or any other publishers using the agency model pricing? The DOJ only went after the 5 publishers and Apple that are involved in the alleged collusion. And, from what I've read of the proposed settlement with the 3 publishers that have decided to settle, they may go back to using agency pricing individually after a term of 2 years (it might be 3 years, I can't rememebr the exact time frame). If agency pricing itself is illegal, they would not be allowed to do that. From everything I have read about the case, it is the collusion of all the publishers involved and Apple that is illegal. If each publisher had come to the agency model on their own, and negotiated contracts for agency model pricing independent of what the others had done it would not be illegal. Publishing and e-books are not the only industry where agency model pricing contracts happen. As far as I know, the DOJ is not going after every company using agency pricing.

Agency pricing, per se, is not illegal, as was pointed out in the case of real estate brokers, insurance brokers, and automobile dealers.  If, however, it is established solely for the purposes of controlling retail prices and ensuring profits, and if it is done in a manner that restrains trade, then it violates the Sherman Act. 

 

Note that buyers are able to negotiate final purchase prices even when dealing with an agent in the case of real estate, insurance, autos, etc.  Note also the words of the defendant employees and the DOJ in the body of the suit.  It was acknowledged that the model would not work unless everybody (most publishers) participated. 

 

Even if an individual publisher were allowed to re-establish an "agency" model of doing business within two or five years after the Court formally accepts an out-of-court settlement, that publisher would be at such a severe disadvantage compared to those that retained the Wholesale Model that their profitability would probably suffer. 

 

It is the fact that the publishers colluded (with or without Apple) that makes this particular case illegal.  The agreement was made primarily to benefit Apple, which has not agreed to settle, as I understand it.  How, then, could Apple become part of any future "Agency Model" agreement without colluding all over again?  What would tempt a publisher to try to re-establish such a pricing and business model, especially if it would risk the wrath of Amazon if it did so? 

 

We'll have to wait and see, of course.  However, it appears that these parties will be watched closely by the DOJ, and by their competitors.  Unless they want to spend the rest of their careers in courts, the executives of the defendant companies will have to tread carefully in the future, IMO. 

 

It's really great to own a business in which profits are guaranteed, regardless of the ineffectiveness of its management or business model.  Such businesses are called monopolies, and they are, generally, illegal in the US, or are regulated by governmental agencies (electric, gas and water utilities come to mind).  If one or two publishers returns to agency pricing, I don't think that could be considered a monopoly. 

 

By offering to settle, those three publishers have acknowledged that they broke the law.  Their actions presumably damaged Amazon, and a great many consumers.  Will the door now open for "class action" lawsuits?

 

Has anybody thought about the possibility that Amazon could now sue those publishers and Apple for actual and punitive damages after the DOJ suit is resolved?  Could the whole notion of agency pricing become so distasteful that we might never see it again in the world of e-book publishing?  Food for thought.


Settlements are not an acknowledgement of wrong doing. Often parties settle becuase they do not want to go through the lengthy and expensive litigation process. And, amazon would be silly to file suit for punitive damages when they actually made more money from the agency model due to no longer being able to take a loss on books. Punitive damages are for punishment--there's no reason, from amazons end, to punish. There's not even a good case for compensatory damages.
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deesy58
Posts: 2,423
Registered: ‎01-22-2012
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Re: American Booksellers Association, Barnes & Noble to weigh in on Apple ebooks case


BearLion wrote:

Settlements are not an acknowledgement of wrong doing. Often parties settle becuase they do not want to go through the lengthy and expensive litigation process. And, amazon would be silly to file suit for punitive damages when they actually made more money from the agency model due to no longer being able to take a loss on books. Punitive damages are for punishment--there's no reason, from amazons end, to punish. There's not even a good case for compensatory damages.


Hmm.  Does that mean that consumers (who have clearly been harmed) cannot file a class action and seek punitive damages? 

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BearLion
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Re: American Booksellers Association, Barnes & Noble to weigh in on Apple ebooks case


deesy58 wrote:

BearLion wrote:

Settlements are not an acknowledgement of wrong doing. Often parties settle becuase they do not want to go through the lengthy and expensive litigation process. And, amazon would be silly to file suit for punitive damages when they actually made more money from the agency model due to no longer being able to take a loss on books. Punitive damages are for punishment--there's no reason, from amazons end, to punish. There's not even a good case for compensatory damages.


Hmm.  Does that mean that consumers (who have clearly been harmed) cannot file a class action and seek punitive damages? 


There are already class actions by private lawyers going on where customers have been solicited (though I'm not sure if any of those classes have been certified). That said, a customer could be a part of a certified class and win, but it's not like they will see a lot of money--many a few bucks if they're lucky. Class actions like those benefits the lawyers more than anything.
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deesy58
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Re: American Booksellers Association, Barnes & Noble to weigh in on Apple ebooks case


BearLion wrote:

deesy58 wrote:

Hmm.  Does that mean that consumers (who have clearly been harmed) cannot file a class action and seek punitive damages? 

There are already class actions by private lawyers going on where customers have been solicited (though I'm not sure if any of those classes have been certified). That said, a customer could be a part of a certified class and win, but it's not like they will see a lot of money--many a few bucks if they're lucky. Class actions like those benefits the lawyers more than anything.

If the lawyers win, somebody loses.  In this case, it would be Apple and the publishers who lose.

 

Even though each individual consumer might receive a pittance, it usually adds up to a substantial amount for the defendants.

 

Besides, I have been a participant in several class action suits where the plaintiffs have prevailed, and I never believed that the damages I received were not worth the time it took to fill out a form.  The $108.00 I received from the Microsoft class action settlement in January of 2007 was certainly worth my efforts.

 

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Sun_Cat
Posts: 788
Registered: ‎12-03-2011
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Re: American Booksellers Association, Barnes & Noble to weigh in on Apple ebooks case


BearLion wrote:

Settlements are not an acknowledgement of wrong doing. Often parties settle becuase they do not want to go through the lengthy and expensive litigation process.

This is 110% correct. I would say "very often."

 

When the plaintiff (DoJ) in a civil suit has vastly more resources than the defendants, it amounts to a legal form of extortion. If the defendants refuse to settle (i.e. pay protection money to the extortionist -- remember that the plaintiff is dictating the settlement terms), they open themselves to unlimited legal expenses plus the possibility of losing in court. It's not a pretty set of alternatives from which to choose.

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deesy58
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Registered: ‎01-22-2012
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Re: American Booksellers Association, Barnes & Noble to weigh in on Apple ebooks case


BearLion wrote:

Settlements are not an acknowledgement of wrong doing. Often parties settle becuase they do not want to go through the lengthy and expensive litigation process.


Sun_Cat wrote:

 

This is 110% correct. I would say "very often."

 

When the plaintiff (DoJ) in a civil suit has vastly more resources than the defendants, it amounts to a legal form of extortion. If the defendants refuse to settle (i.e. pay protection money to the extortionist -- remember that the plaintiff is dictating the settlement terms), they open themselves to unlimited legal expenses plus the possibility of losing in court. It's not a pretty set of alternatives from which to choose.


Deesy wrote:

 

That’s an interesting perspective, Sun_Cat.  Do you also believe that local police and prosecutors engage in legal forms of extortion whenever they prosecute criminals or traffic violators?  Do you believe that the plaintiff (the state) is dictating settlement terms when a driver receives a speeding ticket?  Doesn’t the prosecutor have an advantage over the defendant in such a case, and in many other cases? 

 

What would you propose as a solution to such an unpleasant “set of alternatives from which to choose”?  Should we eliminate our police and prosecutors?  Perhaps we should repeal all of our civil, criminal and traffic laws.  Wouldn’t that lead to anarchy?  Would that be a desirable outcome? 

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BearLion
Posts: 92
Registered: ‎02-10-2011

Re: American Booksellers Association, Barnes & Noble to weigh in on Apple ebooks case


deesy58 wrote:

BearLion wrote:

Settlements are not an acknowledgement of wrong doing. Often parties settle becuase they do not want to go through the lengthy and expensive litigation process.


Sun_Cat wrote:

 

This is 110% correct. I would say "very often."

 

When the plaintiff (DoJ) in a civil suit has vastly more resources than the defendants, it amounts to a legal form of extortion. If the defendants refuse to settle (i.e. pay protection money to the extortionist -- remember that the plaintiff is dictating the settlement terms), they open themselves to unlimited legal expenses plus the possibility of losing in court. It's not a pretty set of alternatives from which to choose.


Deesy wrote:

 

That’s an interesting perspective, Sun_Cat.  Do you also believe that local police and prosecutors engage in legal forms of extortion whenever they prosecute criminals or traffic violators?  Do you believe that the plaintiff (the state) is dictating settlement terms when a driver receives a speeding ticket?  Doesn’t the prosecutor have an advantage over the defendant in such a case, and in many other cases? 

 

What would you propose as a solution to such an unpleasant “set of alternatives from which to choose”?  Should we eliminate our police and prosecutors?  Perhaps we should repeal all of our civil, criminal and traffic laws.  Wouldn’t that lead to anarchy?  Would that be a desirable outcome? 


This is a serious strawman, IMO. Sun_Cat merely pointed out how, in a situation of unbalanced monetary resources, it's best to settle . No where did SC imply anything about the government, police, prosecutors/prosecutorial discretion or the like. In this case, arguably the DOJ has more time and resources. SC's argument would have been the same if it was one private company versus another, if one has vastly more money to spend on litigation than the other.
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Omnigeek
Posts: 877
Registered: ‎01-25-2011

Re: American Booksellers Association, Barnes & Noble to weigh in on Apple ebooks case


Deesy wrote:

 

That’s an interesting perspective, Sun_Cat.  Do you also believe that local police and prosecutors engage in legal forms of extortion whenever they prosecute criminals or traffic violators?  Do you believe that the plaintiff (the state) is dictating settlement terms when a driver receives a speeding ticket?  Doesn’t the prosecutor have an advantage over the defendant in such a case, and in many other cases? 

 

What would you propose as a solution to such an unpleasant “set of alternatives from which to choose”?  Should we eliminate our police and prosecutors?  Perhaps we should repeal all of our civil, criminal and traffic laws.  Wouldn’t that lead to anarchy?  Would that be a desirable outcome? 


Do you deny that many people pay their tickets rather than go through the legal process despite honestly believing themselves to be innocent of the charges filed?  Of course the state is dictating settlement terms -- especially when the driver in question lives out of state and would incur an undue burden to travel back to the state to defend him/herself 30 or 60 days hence.

 

I believe SunCat's point was that some of you are pointing to the settlements as if they were admissions of guilt and therefore tacit admissions that the Agency model is illegal when they are nothing of the kind.

 

I would point out that Penguin setting a price for their ebooks does not preclude you from purchasing alternate ebooks from Random House, Simon & Schuster or Baen so it's hard to argue restraint of trade in the Agency model.  Textbooks are about the only item that consumers could argue they HAD to purchase and therefore were unduly burdened by publishers set prices but oops, we get that burden in dead tree text books anyway (or did -- the Internet has brought about a revolution in obtaining used text books much cheaper than in the ancient days when I attended college).

 

This particular DOJ has a history of questionable legal reasoning so the fact of their filing is also no indicator of the actual legality of the practice.

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Sun_Cat
Posts: 788
Registered: ‎12-03-2011

Re: American Booksellers Association, Barnes & Noble to weigh in on Apple ebooks case


deesy58 wrote:

 

That’s an interesting perspective, Sun_Cat.  Do you also believe that local police and prosecutors engage in legal forms of extortion whenever they prosecute criminals or traffic violators?  Do you believe that the plaintiff (the state) is dictating settlement terms when a driver receives a speeding ticket?  Doesn’t the prosecutor have an advantage over the defendant in such a case, and in many other cases? 

 

What would you propose as a solution to such an unpleasant “set of alternatives from which to choose”?  Should we eliminate our police and prosecutors?  Perhaps we should repeal all of our civil, criminal and traffic laws.  Wouldn’t that lead to anarchy?  Would that be a desirable outcome? 


You've changed the context. I was talking about civil suits. You're talking about criminal prosecutions, where the state has to provide free legal services to defendants who can't afford to pay. That's the equalizer. There is no such right for defandants in civil suits. That's why the rich are free to use the system for extortion.

 

I wish I could propose a good solution. Tort reform of various kinds has generally failed miserably. Prosecutors in civil cases, especially government prosecutors, are rarely if ever accused of violating standards of prosecutorial discretion.

 

Maybe Shakespeare had it right. As he said in King Henry VI, via his character Dick the Butcher, "The first thing we do, let's kill all the lawyers."

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