DoJ sues Apple, publishers for ebook price fixing

Surprised not to see a thread about this yet, but I checked ED, D&D and the Santforum.

This will not be a surprise to anyone who's previously followed this issue, but the DoJ has finally filed suit against Apple and five publishers, accusing them of collusion and price-fixing. This is about the publishers' adoption of the so-called "agency" model, and their agreement not to allow anyone else to sell ebooks at lower prices than they set with Apple. This is why ebook prices rose since 2010.

Atlantic Wire blurb here, with links to more in-depth coverage from Bloomberg and the WSJ: http://www.theatlanticwire.com/busi...ple-and-publishers-e-book-price-fixing/51011/

Personally I think this is long-overdue and I welcome it.

I agree, this is long overdue.

Yglasias or however you spell it was nattering on about how it'd be more useful to go after the copyright stuff and while that is true fuck you this needs to die first.

Dude... his name is Spanish. It's completely phonetic. Yglesias. Spelled exactly as it's pronounced. The only possible variation would be Iglesias.

I'm laboring under the assumption that it sounds like 'I, Glassy Ass'.

Spanish doesn't have the flat "a" sound found in "Ass". They're reduced to saying Ahss, as if they're all Arnold Schwarzennegger impressionists.

Reason #254 why Spanish is an inferior language.

Mark, do you have anything to say on the topic?

Seeing this go forward is good news. I am reminded of how Kobo regularly offers coupons for discounts, usually 20-25% off and how every major publisher would exclude themselves from having the coupons apply to their books because hey, can't touch those prices!

I don't think Amazon is the good guy here, either, but there's a balance that can be struck between their 'go cheap' and Apple's 'go expensive'.

Wow, I didn't even know about this. That's insane, and this is good.

The Wall Street Journal article was particularly good. It pretty much says the whole thing was orchestrated by Steve Jobs. There is some irony there because fairly clearly Apple figured they were going to own the eBook market for the iPad via iBooks, and they negotiated on that basis. They didn't want to compete on book price with Amazon on the platform, so they set it up so Amazon couldn't. Then they lost to Amazon anyway.

No offense, but fuck you. There's nothing wrong with occasionally throwing in tangential observations. Your thread-copping isn't needed or desired.

My understanding of the situation is that before the agency model took over, Amazon was paying the hardcover wholesale price for each e-book sold. They might be paying the publisher $15 for an e-book they sold for $10. But they ate the loss because cheap e-books would drive Kindle adoption. The publishers freaked, worried that one day Amazon would own the e-book market with the Kindle and be able to dictate prices to the publishers, so they backdoored this deal with Apple. Then they took the deal to Amazon, saying you have to agree to these terms or else, and Apple is already on our side so we'll be fine if you say no. Amazon caved, and now the book publishers tell Amazon what prices they are allowed to charge.

I do think that Amazon is the good guy in this situation. Regardless, it's pretty obvious that Apple and the publishers aren't.

Bob's interpretation pretty sums up what happened and why this is a good thing.

I buy stuff from Amazon all the time, and they're arguing for lower eBook prices, but I still view them as rather evil as well since they've been so underhanded in the way they've systematically crushed competing eBook readers and more importantly retailers. Mobipocket used to be the reader on the Palm, Amazon purchased them, co-opted the format for the Kindle. When Stanza became serious competition on iOS, Amazon purchased them and then declared they wouldn't be updating Stanza beyond this last patch that fixed iOS 5 problems.

Fictionwise used to have a reasonable selection of eBooks, though not as large as Amazon's. Then Amazon told a lot of publishers "sell through us or sell through them," and now Fictionwise is a shadow of what it was.

Yeah, BJB's summary is a good one. I'm not suggesting Amazon is a bad guy, either (though Gus highlights some things they've done that shows they can be just as ruthless as any company trying to establish dominance) but in the case of e-books, they were selling at a likely loss to establish market share and drive sales of the Kindle (which further locks people into Amazon) and there's nothing inherently wrong with that.

The whole mess reminds me (though the particulars are different) of how record companies panicked in the early days of the MP3 and Napster.

I've read a couple of editorials from Eric Flint Baen that most publishers have no clue how to treat eBooks. The only reason there's a serious eBook market now is that Amazon does know and has pushed eBooks hard. Mostly in service of the Kindle, of course.

Sorry if I offended you. I think my 'tone' came across wrong -- I wasn't trying to threadcop, it was more a nudge to see if you had something to add, as you are an intelligent guy who has opinions and stuff. If I didn't think you had anything to contribute I'd have said nothing. That's all!

Oooooooh yeah. I think I had about half that story, because I remember the thing about the publishers being dicks about it but didn't know that Apple was involved.

I drew the line at which I will purchase a book for Kindle at $9.99. Apple and the publishers forced the price up, so now I'm reading a lot of 19th century literature.

Good for who, though? I think Amazon wants to sell you and me cheaper books, which is good for us. I think they also want to destroy the publishing industry and secure a position as a monopoly and monopsony in the book market--the only practical place to either sell or buy a book. I don't know that that's good for authors, readers, or much of anyone other than Amazon.

Every company would like to be a monopoly in its industry, and any time any company increases its market share in any way, including by doing something that benefits consumers, it inches closer to being one. That doesn't really matter much, though. Actual monopolies matter, but Amazon isn't one and isn't poised to become one any time soon, whatever their fondest dreams might be.

In the meantime, their immediate actions are a positive for consumers, and Apple's and the publishers' are a negative. I don't know that you need to be so naive as to assign corporations the roles of "good guys" and "bad guys"--in reality, they're all "profit guys"--but I do know who I'd rather give my money to and who I'd rather see win this fight.

http://www.slate.com/blogs/moneybox/2012/04/11/e_book_price_fixing_who_cares_.html

Here's that post I was talking about before.

I think he's fundamentally missing the very freaky dynamic Bob brought up. I think it's even weirder that this is another case where physical content is kowtowing to internet content, which also totally dominates the people bundling and selling eyeballs. Why is this pattern constantly repeated?

After we're done discussing this, can we have a new thread where we chat about the new fad for stealing styles from toys and candy?

http://www.slate.com/slideshows/art...sert-and-toys.html?wpisrc=msn_gallery#slide_1

I mean I like the whimsical nature of it all, but at some point you have to wonder if this is infantilization of media consumers.

That's a possibility, but that outcome is pretty far off and involves a lot of other initiatives. Also, it's not like the publishers are dealing with customers now. They already go through distributors to sell their product. I'm not sure there's a material difference between iPad vs Nook vs Kindle and Barnes and Noble vs Borders vs Wal-Mart.

Every company in every industry works towards that end. Why single out Amazon?

I actually use iBooks, and I'd still like to see Apple and the book publishers get slapped down for this. It's a blatantly consumer-hostile arrangement, and probably an illegal one, and it needs to be stopped.

Given the reality of digital distribution, the value-add from publishers seems to be almost negligible.

Charlie Stross has interesting things to say about publishing. It's not just financing. Theoretically if the existing publisher model goes away there's a very large pile of work that remains to be done by someone that Amazon doesn't do - editing, marketing, translation, etc. Ebook comments.

I wish I could be all "no the editing is really critical" but then we get books that appear to have been edited by apes.

According to Jason's link, the publishers farm editing out to freelancers.

I'm reminding you of this the next time we talk about George RR Martin needing an editor!

oho!

http://www.antipope.org/charlie/blog-static/2010/02/common-misconceptions-about-pu.html

Also the rest of the article is pretty entertaining.

A: no, not really. Not in any meaningful sense. Unless you want to tell me that, say, Penguin is working in any significant fashion toward that end in the book industry, in which case I'll ask that you support your assertion.
B: Amazon actually has a shot at pulling it off, or at least getting close, and this takes them further down that road.

Nilay Patel has a really good run-down of the DOJ's case on The Verge. If that stuff is even vaguely true -- and it's worth noting that most of the publishers settled rather than fight it -- then it is almost cartoonish, mustache-twirling levels of evil.

!!!

The agency model IS that end. If you want to buy the books that these guys sell, you have no choice but to buy from them, at the price that they charge. Nobody -- not retailers, not individuals, nobody -- can buy or sell these books for any price or on any terms other than those dictated by the publishers. (And of course there's no second-hand market for ebooks. And many of the publishers flatly refused to work with libraries. So.)

It's about time. I was incredibly pissed about all of this when it went down back in 2010, and didn't understand how what the publishers were doing could be legal. It never ceased to amaze me that Amazon was paying the publishers the wholesale price of a physical hardcover book that the publisher never had to spend any margin on actually producing, and that wasn't good enough. When the ebook prices on some new books were HIGHER than the physical editions, I knew something was well and truly fucked.

Amazon was fine paying $15 for a book to sell to customers for $10 in order to foster the creation of a new market, for which the publishers made $15 and passed whatever negligible amount back to the actual writers and editors. Apple needed customers to pay $15 so they could keep $4.50 for themselves. Amazon is no saint, but Apple's commission is ludicrous. Their plan to "beat" Amazon and make new money hats by effectively rigging the system was ridiculous, and it's hilarious that at the end of the day they failed - iBooks has negligible market share anyways. The real losers in this game were consumers stuck paying more for no legitimate reason at all. Ironically, the money-maker off of this ends up being Amazon - turning a profit it wasn't looking to make on a good that it intended to use as a loss leader..

The thing that's so super-crazy about this whole thing is that the publishers aren't even being greedy, they're combining their evil with raw stupidity. I mean, Amazon was willing to 1) pay them lots of money, and 2) expand the ebook market (which means shrinking the non-copyright-respecting market) by selling books at super-low/negative margins so that more people would buy them.

But publishers fought and illegally colluded for a system that caused them to get less money for each copy of the book, and also to sell fewer books overall due to the higher prices. Oh, and almost certainly to drive some people off to torrent sites as the raw bullshittiness of the situation erodes respect for the publishers and for the very notion of copyright.

The DOJ decision will allow Amazon to decide how much profit it wants to trade for growing the market, which is cool; but it's also saving the publishes from their own stupidity. If you own stock in one of the major publishers, you should be thanking the DOJ (and voting to fire current management).

Everybody compares what Amazon was doing with the Kindle as being the same as what Apple did to the music industry with the iPod and iTunes. Which given what's happened, ironically, is still almost exactly correct. Except the music industry, as utterly retarded as it is, was still smart enough to realize that iTunes was actually getting people to pay money for digital copies of songs, even if it wasn't as much as Singles and CD sales might have brought in.

Apple was the one basically looking at publishers and saying, "Hey, if we sell your books at $10 to compete with Amazon we're only going to pay you $7 for it." And instead of laughing at how stupid that sort of arrangement would be - at that point Apple had approximately a 0% market share of eBooks and had no real leverage whatsoever to dictate pricing terms - the publishers went along with it because of their fear Amazon might try to dictate ridiculous terms to them someday and they'd have to go along with it. So they let Apple dictate ridiculous terms to them right then and there, successfully lopping off their own heads to spite their faces. A $13 book on Apple's site nets the publisher $9, and their big concern was solving the "$9.99 problem". Reality distortion field indeed.

Jesus. Business degrees FAIL.