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Wordsmith
doncr
Posts: 493
Registered: ‎12-29-2010
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Judge Says Apple Conspired to Raise Prices on E-books

In a decision that could reshape how books are sold on the Internet, a federal judge ruled that Apple Inc (AAPL.O) conspired to raise the retail prices of e-books in violation of antitrust law, and called for a trial on damages.

 

Reuters article here.

 

 

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keriflur
Posts: 6,555
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Re: Judge Says Apple Conspired to Raise Prices on E-books

"The department also said it wants to stop Apple over a five-year period from entering contracts that insure it will offer the lowest retail prices."

 

This is a big blow to Apple.  The MFN clauses are pretty common and major players like Apple are rather fond of them.

 

I thought it was interesting that the DoJ wants to block Apple from using the agency model, as it did not block the publishers from using it, it only blocked the required pricing portion of their contracts.  The time period for the block is the same - 2 years.  I wonder if this is a miswording on Reuters part, or if Apple will really need to renegotatiate every one of their agency contracts, even those already changed to remove REP.

Doug_Pardee
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Re: Judge Says Apple Conspired to Raise Prices on E-books

[ Edited ]

One of my favorite parts of Judge Cote's ruling:

The Plaintiffs do not argue, and this Court has not found, that the agency model for distribution of content, or any one of the clauses included in the Agreements, or any of the identified negotiation tactics is inherently illegal. ... It is also not illegal for a company to adopt a form “click-through” contract, negotiate with all suppliers at the same time, or share certain information with them. ... That does not, however, make it lawful for a company to use those business practices to effect an unreasonable restraint of trade. And here, the evidence taken as a whole paints quite a different picture -- a clear portrait of a conscious commitment to cross a line and engage in illegal behavior with the Publisher Defendants to eliminate retail price competition in order to raise retail prices.

It's not the contracts, it was the intent and the process.

 

 

Another goodie, from a footnote:

This Opinion has already described several instances in which testimony given by [Apple's Eddy] Cue and [Macmillan's John] Sargent was unreliable. Other witnesses who were noteworthy for their lack of credibility included [Apple's Keith] Moerer, [Apple's Kevin] Saul, and [Simon & Schuster's Carolyn] Reidy.  Their demeanor changed dramatically depending on whether Apple or the Plaintiffs were questioning them; they were adamant in denials until confronted with documents or their prior deposition testimony; instead of answering questions in a straightforward manner, they would pick apart the question and answer it narrowly or avoid answering it altogether.

 

If Steve Jobs were alive today, I wonder what he'd think:

Compelling evidence of Apple’s participation in the conspiracy came from the words uttered by Steve Jobs, Apple’s founder, CEO, and visionary.

 

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keriflur
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Re: Judge Says Apple Conspired to Raise Prices on E-books

[ Edited ]

"Other witnesses who were noteworthy for their lack of credibility included..."

 

LOL!

 

I also wonder what Jobs would say about this.  He was rather arrogant about it at the time, practically telling the media how he masterminded the entire thing.  It's possible that the suit would never have happened if he hadn't been so vocal about it.

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roustabout
Posts: 3,609
Registered: ‎03-31-2011
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Re: Judge Says Apple Conspired to Raise Prices on E-books

Astonishingly, Apple has announced it intends to appeal.

 

I do like rulings like this one, where quite a bit of the findings are summarized in excellent and clear writing. 

 

I think the call-out of the unreliable witnesses is in part a note to the appellate court.  Since appeals aren't rehearings of testimony, facts found at trial are given a lot of weight.  Discussing witness demeanor in an opinion is something I haven't run into before, but it's something only visible during the trial and the judge obviously considers it a finding of fact. 

"no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized." Fourth Amendment to the US Constitution.
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MacMcK1957
Posts: 2,173
Registered: ‎07-25-2011
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Re: Judge Says Apple Conspired to Raise Prices on E-books

Other witnesses who were noteworthy for their lack of credibility included...

 

In civil trials, pretty much everybody lies.  Rarely is a judge quite so refreshingly blunt in making that assessment.  It's a nice change from the usual.

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patgolfneb
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Registered: ‎09-10-2011
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Re: Judge Says Apple Conspired to Raise Prices on E-books

What happens to e book pricing now?  The publishers have settled previously.  Despite this I haven't noticed a decrease in prices.  Is there data tracking weighted price's? Publishers like to point to price ranges, but it appears that prices on volume selling books and bestsellers have increased if anything. 

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roustabout
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Re: Judge Says Apple Conspired to Raise Prices on E-books

"What happens to e book pricing now?"

 

It continues to be inflated by the lack of a useful market in used ebooks.  :smileyhappy:

 

I think that pricing on some bestsellers is down to around 9.99 at Amazon.  Not all of them, and it's not as uniform a price as it was for them a few years back. 

 

Some books are now below the 9.99 level as well, even somewhat specialty titles (ie, Lee Smolin's Trouble with Physics at 8.77.) 

"no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized." Fourth Amendment to the US Constitution.
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keriflur
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Re: Judge Says Apple Conspired to Raise Prices on E-books


patgolfneb wrote:

What happens to e book pricing now?  The publishers have settled previously.  Despite this I haven't noticed a decrease in prices.  Is there data tracking weighted price's? Publishers like to point to price ranges, but it appears that prices on volume selling books and bestsellers have increased if anything. 


I don't expect this verdict to affect pricing for ebooks as the pubs have already renegotiated their contracts based on the terms of their settlements (or are renegotiating, I can't remember if they're all done or not).  It may give encouragement to Amazon to start agressive price competition again - we'll have to wait and see on that.

 

In any case, I would expect prices to increase with inflation, just as physical book pricing has always done.

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keriflur
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Re: Judge Says Apple Conspired to Raise Prices on E-books


roustabout wrote:

"What happens to e book pricing now?"

 

It continues to be inflated by the lack of a useful market in used ebooks.  :smileyhappy:

 

I think that pricing on some bestsellers is down to around 9.99 at Amazon.  Not all of them, and it's not as uniform a price as it was for them a few years back. 

 

Some books are now below the 9.99 level as well, even somewhat specialty titles (ie, Lee Smolin's Trouble with Physics at 8.77.) 


The last study I read on this was that the cost of ebooks overall is down, and has been going down for some time now, due to (a) the increase in self-pub and (b) the increase in backlist titles that do not need to be converted, because they were ebooks when they originally released.

 

As I mentioned above, inflation is and should be a factor in pricing, so it makes sense that new releases would go up.