Comments on: The Lawsuit Against Apple And Big Publishers: What’s In It

By: Annie

Annie — Wed, 01 Feb 2012 19:56:51 +0000

eBooks cost publishers far less to produce, hence the “correct” price is lower than the paperback, always. Thank you Hagens Burman.

By: NB

NB — Sun, 23 Oct 2011 18:21:37 +0000

Nothing requires them to do so, and nothing prevents them from doing so. In the agency model, they are prevented from doing so.

By: george

george — Mon, 15 Aug 2011 17:25:58 +0000

Actually Apple has a great deal of experience in this sort of pricing structure and has been sued many times over this type of pricing issue and has always prevailed, always.
Apple dealers are forbidden by Apple (the manufacturer) from discounting the computers, phones, iPods, tablets by more than 5.00 unless agreed upon by Apple. They can provide add-on value (discounts) in the form of rebates, free memory, printers etc at their own discretion.
That’s why MacMall and ClubMac always had the same pricing as MacWarehouse.
Apple in the past used to audit the books of it’s dealers to ascertain that they were adhering to their contractual dealer agreement and not discounting the goods.
Now, publishers are setting the price and leveling the playing field between retailers in the same way that Apple does between dealers.
Retailers can make the price higher but not lower.

By: Frank Martinez

Frank Martinez — Fri, 12 Aug 2011 14:30:01 +0000

Okay, this is making a little more sense, then. Thanks. Unfortunately, it only makes the complaint inherently faulty as far as I can tell. Paragraph 10 of the introduction says in part, “As part of the unlawful agreements, and seeking to leverage its installed user base and dominant position via the Apple iOS platform, Apple and the Publisher Defendants agreed that prices for Publisher Defendants’ eBooks that were offered through the iBookstore would be calculated by a formula tied to physical books. This eBook formula would cause current prices for eBooks to increase and, at the same time, would guarantee Apple that the Publisher Defendants would not sell eBooks at lower prices elsewhere, such as through other eBook distributors, including Amazon.” The key phrase here, however, is “eBooks that were offered through the iBookstore”. Where I work, the price We charge one Retailer does not effect what We charge a different Retailer due to different contractual terms.

Besides, convincing a court “a change in business model is price fixing” is going to be a stretch at best; otherwise going from paying Workers on a per unit of production to a set hourly rate of salary model would be price fixing, going from selling software to software-as-a-service would be price fixing, and going from selling cell phone plans which charge by the minute to selling plans which charge a flat fee with a block of minutes would be price fixing. The legal arguments I would hope are very ‘acrobatic’ in nature.

By: BillTheSlink

BillTheSlink — Fri, 12 Aug 2011 01:49:43 +0000

Basically the problem and possible anti-trust violation if it can indeed be proven this is collusion, is that it PREVENTS competition by book sellers, which have been forced to accept the agency model or not sell the books, and therefore keeps the price of ebooks artificially high for consumers. See Apple struck a back room deal with the publishers to sell there books like this in exchange for the publishers agreeing not to allow there books to sell anywhere than less than they do at Apple. That’s why it is price fixing because you are not allowing market forces to act.

By: Frank Martinez

Frank Martinez — Wed, 10 Aug 2011 22:23:14 +0000

I understand that point. I am making the point, however, nothing /requires/ Them to do so, resulting in no difference for the Consumer, yes?

By: Guest

Guest — Wed, 10 Aug 2011 20:09:05 +0000

The retailer can discount e-books under the wholesale model.

By: Frank Martinez

Frank Martinez — Wed, 10 Aug 2011 19:25:17 +0000

Not really because it strikes Me as identical to the case where the Retailer establishes a policy to not discount e-books at all under the wholesale model. Would this lawsuit be happening if Apple had secured agreements with the Publishers to use the wholesale model and Apple then announced books would be sold solely at the suggested retail price? While My instincts say, “No,” I am open to the possibility some other key piece of information has been excluded from this discussion.

By: Guest

Guest — Wed, 10 Aug 2011 19:20:47 +0000

Hey Frank, under the wholesale model, a retailer (like Apple or Amazon) can sell e-books at whatever price it wants, and put them on sale. I’d written that under the wholesale model, “publishers set a book’s retail price and retailers can discount the books to any price that they want”; to make that more clear I should have said that publishers set the book’s SUGGESTED retail price and retailers can discount the book to any price they want.

So, under the wholesale model, a retailer can discount e-book prices whenever it wants. Under the agency model, it can’t.

Does that help?

By: Frank Martinez

Frank Martinez — Wed, 10 Aug 2011 18:32:31 +0000

From the article, “Under the agency model, book publishers set their own e-book prices and the retailer (agent) receives a commission. Under the traditional wholesale model, which is used for print books and was used for e-books as well until publishers adopted the agency model in 2010, publishers set a book’s retail price and retailers can discount the books to any price that they want.”

So, I’m not seeing how Apple’s behavior is distinguishably different under these two models. Under the agency model, Publisher A sets price B and Retailer C receives some fraction of B. Under the wholesale model, however, Retailer C is free to set the retail price as high as that same said B set by the Publisher. The approaches, though theoretically different, in practice appear to provide a distinction without a difference.

I am sure I have missed something but I do not know what that something is.