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roustabout
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Re: The DoJ thinks it has a case against the Agency model

Pat writes:  "selling drugs developed in USA labs for much less in other countries than here. I just love subsidizing other countries medications."

 

It was only relatively recently that we in the US started tolerating the gynormous ad budgets of the pharms houses. And now, their ad budgets are much larger than their R and D budgets

 

Fact of the matter is, the drugs aren't being sold below cost overseas;  you're paying for your network Tee Vee bill through higher prices on drugs, books, cars and anything else that's being flogged. 

 

It was a bit of inside pool, but when the Bush vintage prescription drug benefits were being worked on, the industry lobbied aggressively to prevent Medicare from creating a pharmaceutical benefits manager to negotiate a rate that Medicare would pay for drugs. 

 

Some of the docs the drug companies market to hardest are the ones with big Medicaid and Medicare caseloads, because folks who take a lot of privately insured patients write prescriptions which are covered by the pharms benefit manages in the insurance industry, and those folks drive hard bargains. 

 

The pharmaceutical industry did not want to lose one of their biggest cash cows, and lo and behold, they didn't. 

"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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patgolfneb
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Re: The DoJ thinks it has a case against the Agency model

Roustabout, I agree that advertising, liability, systemic issues are part of the costs differences. Pharmaceutical executives have acknowledged in congressional testimony that they do sell at lower wholesale prices in foreign markets because they could not make the sales otherwise. PBS and 60 minutes have reported on this issue in past years as well.
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Ya_Ya
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Re: The DoJ thinks it has a case against the Agency model


keriflur wrote:

 

I'm fortunate that I live in a place where I can find a lot of local products, not just a Walmart and a Costco and some big chain grocery store that sells fruits and veggies from South America.  It's harder if you don't have a lot of options available, or can't afford locally made/grown items.  But since I have options, I'm exercising my right to vote for our farmers, our craftsmen, and our companies.

 


We shop neither Walmart or Amazon, but I admit to shopping Costco and Target.

 

Target is heading down the Walmart road and it will break my heart to stop when it gets past my threshhold, but I will stop.


Costco's HR policies earn them quite a bit of my respect and they'll continue to get our dollar any time I can buy something there.  It's difficult for a married couple with no kids who are out of the house more than they are home to buy a lot of bulk products, so I don't Costco as much as I'd like, though...

 

I love my CSA and I try to shop local stores as much as I can; luckily I live in a large enough city that it's possible for more than I would have believed two years ago...

 

I also don't believe that a business has to be predatory, law-breaking and abusive of its employees to be successful - although my definition of success isn't "the only game in town", either.  :smileywink:

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gb18
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Re: The DoJ thinks it has a case against the Agency model

Link to:  Publisher Says Kindle, Nook Users Must Accept AT&T-style Arbitration

 

 

 

http://bookclubs.barnesandnoble.com/t5/Community-Room/Publisher-Says-Kindle-Nook-Users-Must-Accept-A...

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keriflur
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Author's Guild Perspective on the DoJ Announcement

[ Edited ]

This article from the Author's Guild gives a very interesting perspective on the DoJ announcement.  Basically the President of the Author's Guild is hoping the DoJ will reconsider and allow the agency model to continue.

 

http://blog.authorsguild.org/2012/03/09/letter-from-scott-turow-grim-news/

 

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Scott-Michael
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Re: The DoJ thinks it has a case against the Agency model

The DOJ is looking into it because of Hagens, Berman, Sobol, Shapiro, LLP, who filed a class action in 2011. Although the DOJ and EU adds significance, I think the class action is where things will happen. I'd also be interested in hearing how authors feel about it. Why they don't cut out the middle man is beyond me.

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TnTexas
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Re: Author's Guild Perspective on the DoJ Announcement

keriflur: This article from the Author's Guild gives a very interesting perspective on the DoJ announcement.  Basically the President of the Author's Guild is hoping the DoJ will reconsider and allow the agency model to continue.

 

http://blog.authorsguild.org/2012/03/09/letter-from-scott-turow-grim-news/

 

 

I totally agree with the article closing statement: Let’s hope the reports are wrong, or that the Justice Department reconsiders. The irony bites hard: our government may be on the verge of killing real competition in order to save the appearance of competition.

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MacMcK1957
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Re: Author's Guild Perspective on the DoJ Announcement

Fundamentally, as I read Turow's argument, he is basically saying that industry-wide price-fixing (whatever label you want to put on it) is the only solution to deal with Amazon's predatory price-cutting.  Sorry, I don't think that argument is going to fly.

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bklvr896
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Re: Author's Guild Perspective on the DoJ Announcement

Price Fixing, is it truly price fixing?  Here's a couple of definitions of price fixing:

 

Price fixing is an agreement between participants on the same side in a market to buy or sell a Product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.

 

Price fixing is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point.

 

In looking at prices, I don't see where the publishers have agreed to a fixed or set price, as pricing is all over the board on best sellers.  Penguin tends to be higher that the rest.  One might argue they price fix the price of printed books, since pretty much all paperbacks are $7.99 and all HC books are within the same price range.  The difference being, the retailer is free to offer discounts, because the retailer is the seller.  Are they controlling supply and/or demand?

 

In the current market, the publisher is the seller, the retailer is the agent.  Is there anything inherently illegal with agency agreements?  

 

Is it price fixing if each publisher enters into a separate agreement with Apple to use agency type pricing and agree to not sell the product elsewhere for less?  That could be.  But simply entering into an agency type contract to sell books and set the price as the true seller, does that constitute price-fixing.  The publishers could terminate the current agency contracts, enter into new ones, without the push from Apple to not sell them lower anywhere else, and still not sell them lower anywhere else.

 

And what would it be if the publishers decided to open their own retail stores and simply bypass the retailer all together?  Then they'd be free to charge whatever they want and not offer discounts.  If all the publishers decided to do that, would it be price fixing?

 

What if the publishers decided to enter into a partnership to open a retail store as a joint venture and again, bypass the retailers, sell directly to the consumer?  Would that violate any laws?

 

Are publishers truly in competition with each other, since, while they both sell books, each product they produce is unique.  If I want to read the latest Vince Flynn book, I have to buy it from S&S.  If it's priced at $14.99 for example and the latest Lee Child book is $9.99, that doesn't do me any good because I want to read the Vince Flynn book, not the Lee Child book, so the price difference won't have any impact on me.  In essence, each publisher has a monoply on its authors.

 

Just some thoughts I thought I'd toss out into the pool.

 


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Omnigeek
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Re: Author's Guild Perspective on the DoJ Announcement


MacMcK1957 wrote:

Fundamentally, as I read Turow's argument, he is basically saying that industry-wide price-fixing (whatever label you want to put on it) is the only solution to deal with Amazon's predatory price-cutting.  Sorry, I don't think that argument is going to fly.


It's only price-fixing if you distort the English language (as trial lawyers and hacks like Eric Holder are wont to do).  Books are not a commodity, producers (publishers) are entitled to set a minimum price on their product to preserve a perceived value and producers don't have to sell to someone who doesn't agree to honor their product or contract.  No one will die if they don't get the latest book from Stephen King, J.K. Rowling or Scott Turow for that matter.

 

I would really prefer publishers follow the Baen model but I'm tired of the distortions of language and law whenever people scream collusion or monopoly or price-fixing.

Currently reading: Destiny of the Republic, The Heritage of Shannara, Lonely Planet: Melbourne & Victoria
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MacMcK1957
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Re: Author's Guild Perspective on the DoJ Announcement

One thing I can say right now is that it certainly appears to me as if ebook prices have gone up in general, among all vendors, since this Apple agreement went into effect.  Books that I bought from B&N two years ago for $6.99 are now $9.99.  Two years ago it was my impression that books a few years old that had gone into mass market paperback status were generally under $10.  Now it seems to me they're more often $13 or $14.
I freely admit, and have emphasized, that these are just my personal impressions.  I have not collected widespread data or run any statistical analysis.  This is just based on my own book shopping.  It seems to me that as ebooks have exploded, the prices should be coming down, and the opposite seems to be occurring, across most publishers and outlets.  That is, at the very least, suspicious.  Whether it is price fixing and/or collusion in a legal sense is up to lawyers to determine.

 

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patgolfneb
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Re: Author's Guild Perspective on the DoJ Announcement

Bklvr and Omni, You make good points but the courts have historically been reluctant to restrict sellers ability to determine price. If courts accept agency model making publishers the sellers then they are in a much stronger position. The courts could take the position agency pricing is a fiction and part of the collusion. The fact that each book is unique doesn't mean that collusion couldn't be established. Each auto makers models have unique features but they compete in a common market. Price fixing doesn't require actual uniform pricing actions, only actions or collusion in acts which restrict pricing freedom or market shares. I agree Amazons actions are predatory. As I have posted previously I feel that Amazons pricing actions, DRM, proprietary formats, and agency pricing need to be addressed with a comprehensive response since they are all attempts by the book industry to limit risk without bringing additional value to consumers.
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bklvr896
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Re: Author's Guild Perspective on the DoJ Announcement


MacMcK1957 wrote:
One thing I can say right now is that it certainly appears to me as if ebook prices have gone up in general, among all vendors, since this Apple agreement went into effect.  Books that I bought from B&N two years ago for $6.99 are now $9.99.  Two years ago it was my impression that books a few years old that had gone into mass market paperback status were generally under $10.  Now it seems to me they're more often $13 or $14.

I agree that books are going up in price, but, many of the books aren't going into mass market paperback status, they're being published as trade paperbacks instead.  Which are priced in the $10-15 price range.  Yes, books have gone up in price, but then, so has everything else, books aren't immune from the changes in the economy.  MM Paperbacks at one time were $5.99, then they went to $6.99, then $7.99 and now some are $8.99.  And more are being sold as trade paperbacks instead.

 

patgolfneb wrote:
Bklvr and Omni, You make good points but the courts have historically been reluctant to restrict sellers ability to determine price. If courts accept agency model making publishers the sellers then they are in a much stronger position. The courts could take the position agency pricing is a fiction and part of the collusion. The fact that each book is unique doesn't mean that collusion couldn't be established. Each auto makers models have unique features but they compete in a common market. Price fixing doesn't require actual uniform pricing actions, only actions or collusion in acts which restrict pricing freedom or market shares. I agree Amazons actions are predatory. As I have posted previously I feel that Amazons pricing actions, DRM, proprietary formats, and agency pricing need to be addressed with a comprehensive response since they are all attempts by the book industry to limit risk without bringing additional value to consumers.

 


IMHO, books are different from cars, yes each car is unique, in some respects, but they still all do the same thing, get you to where you want to go.  And people comparison shop on cars all the time, they may not be set on a particular model, they want particular features.  Yes, there are some people who are set on a particular car, but most are looking for specific features.

 

Books, on the hand, aren't really interchangeable for most people.  The latest Nora Roberts book isn't the same as reading the latest Steven King book.

 

Is the agency pricing model inherently illegal?  Because each book is unique, so the publisher essentially has a monopoly, is the agency model for eBooks price fixing because the publishers are setting the price and eliminating competition?   Some think so, others don't.  I go back to the idea of what would happen if the publisher decided to cut out the retailer and be sole source for selling the eBooks?  That results in the same thing at the end, and can the publisher be the sole selling source?

 

I suppose this will wind up in the courts, but I don't have much faith in any decision by the courts, regardless of which way it goes, because today's courts are much more about politics that interpreting the law correctly. 

 

 

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MacMcK1957
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Re: Author's Guild Perspective on the DoJ Announcement

[ Edited ]

bklvr896 wrote:

I suppose this will wind up in the courts, but I don't have much faith in any decision by the courts, regardless of which way it goes, because today's courts are much more about politics that interpreting the law correctly. 

 


Actually I'm inclined to suspect it may well not.  Most antitrust-type actions tend not to.  The usual result is some sort of consent agreement that is carefully worded as, "We did not do anything wrong, and promise we won't do it again." :smileywink:

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bklvr896
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Re: Author's Guild Perspective on the DoJ Announcement


MacMcK1957 wrote:

bklvr896 wrote:

I suppose this will wind up in the courts, but I don't have much faith in any decision by the courts, regardless of which way it goes, because today's courts are much more about politics that interpreting the law correctly. 

 


Actually I'm inclined to suspect it may well not.  Most antitrust-type actions tend not to.  The usual result is some sort of consent agreement that is carefully worded as, "We did not do anything wrong, and promise we won't do it again." :smileywink:


This is true and the only part of the agreements that seem really suspect to me is the assertion that Apple insisted the publishers include a clause to to sell it lower elsewhere.  If this is proven, even if we go with "We did not do anything wrong, and promise we won't do it again" what is to stop the publishers from simply renegotiating the contracts with them still as the seller, setting price, and the retailer still has the agent?  They should have convinced Apple to negotiate the contract without that, since the agency model essentially does what the publishers have wanted to do all along, to stop Amazon from continually selling the books at a loss.  I agree in theory that Amazon has the right to do this, I also believe it has set consumers to perceive the value of a eBook is no higher than $9.99.  And if Amazon's sole purpose in doing this is to drive the other eBook retailers out of the market, then it probably falls into the "predatory pricing" area, which from my understanding, is not legal.  

 

And I'm not sure I agree with that since I buy books for content not format.  And some books, based on the content, have more value to me and therefore I'm willing to pay more, just as I did before eBooks.  

 

 

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patgolfneb
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Re: Author's Guild Perspective on the DoJ Announcement

Bklver896, there are better examples than cars but I do consider price when book shooping and based on the posts I see so do others. Unless you only buy books from previously read authors or only purchase books decided on before entering the online store it is just common sense.  If I see a positive review of a book I often will pass up that authors new release in favor of an older book by the same author if priced lower. Maybe your favorite author has a book at 9.99 and another author you like just not quite as much is 7.99, especially if you just finished a book from your favorite, many will choose the 7.99 book. Substitution of competeing but similar products is a well estabished  economic principle.

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bklvr896
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Re: Author's Guild Perspective on the DoJ Announcement


patgolfneb wrote:

Bklver896, there are better examples than cars but I do consider price when book shooping and based on the posts I see so do others. Unless you only buy books from previously read authors or only purchase books decided on before entering the online store it is just common sense.  If I see a positive review of a book I often will pass up that authors new release in favor of an older book by the same author if priced lower. Maybe your favorite author has a book at 9.99 and another author you like just not quite as much is 7.99, especially if you just finished a book from your favorite, many will choose the 7.99 book. Substitution of competeing but similar products is a well estabished  economic principle.


Yes, substitution of competing but similar products is a well established practice, but in this case, it only works if you consider books as competing but similar products.  And I generally don't.  I read a lot of books by a lot of different authors, I try a lot of new authors, mostly because my favorite authors can't write fast enough for me, but when the latest J.D. Robb, Eve Dallas book comes out, there's no substituting, competing product.

 

I also know, with my circle of friends, co-workers and acquaintances who have some type of eReader, they don't seem to have trouble with the price of eBooks, if they see a book and want to read it, they buy it.  And apparently so do a lot of others, because if you look at the NYT best sellers in fiction eBooks, books at $12.99 and higher are routinely in the top 10.  This week, 6 are $9.99 or higher, 4 of which are $12.99 or higher.  IMHO, the majority of those who use eReaders are not all that concerned with price.  

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MacMcK1957
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Re: Author's Guild Perspective on the DoJ Announcement


bklvr896 wrote:
Yes, substitution of competing but similar products is a well established practice, but in this case, it only works if you consider books as competing but similar products.  And I generally don't.


I don't have time to read all the books I would like.  (Maybe someday, when I retire.)  So if there are numerous books that appeal to me, and some are $7, and some are $12, guess which ones I'll buy.

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Ya_Ya
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Re: Author's Guild Perspective on the DoJ Announcement


MacMcK1957 wrote:

So if there are numerous books that appeal to me, and some are $7, and some are $12, guess which ones I'll buy.


I get this, but if the $12 books are the ones I really want to read and the $7 books are just "Hey, that looks good" I'm still buying the $12 books first.  (Of course, it could be reversed and the $7 would be the ones I really want to read, but the $12 are the ehs.  Then I'm buying the $7s first.)

 

Books are one of the very few things I buy without paying much attention to price; I won't say "no attention", but for the most part, if I want a book, I buy that book.  Not something else.  And no, we're not rolling in money, not taking baths in diamonds, nor drinking Perrier Jouet for breakfast...  I just value a good book more than a matinee, or fast food lunch or a manicure.

 

I haven't ever claimed to be normal or typical, though.  :smileytongue:

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keriflur
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Re: Author's Guild Perspective on the DoJ Announcement


patgolfneb wrote:

Bklver896, there are better examples than cars but I do consider price when book shooping and based on the posts I see so do others. Unless you only buy books from previously read authors or only purchase books decided on before entering the online store it is just common sense.


This is me, and while I haven't asked, I suspect that this is most of my circle of friends.  I have so many recommendations and know of so many amazing authors that I hardly ever browse anymore, even when I got into brick and mortar stores.  I was one of the people that was really upset when the agency model went into effect and the price of Charlaine Harris' latest, which expected to release at $9.99, shot up to $13.99.  At least I had a nook and could pay the extra $4 - the kindle folks had to buy DTB or use a reader that wasn't their kindle.  But to pass on that book because of $4?  Not gonna happen.

 

Question for the self-pubbers (not sure if there are any reading this thread) - I'm under the impression that if you self-pub and post your ebook on Amazon and B&N, you control the price of your book.  Can anyone confirm this?  Because if that's the case, then how is agency pricing any different?