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Apple Responds to Allegations of Collusion with Book Publishers Over eBook Pricing

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Apple has responded to allegations of collusion with other major book publishers surrounding ebook pricing. Here’s the statement they released, as noted by AllThingsD:

The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.

It was noted the other day Apple had pulled their ‘Aikido Move’ to break the grip Amazon had on the book industry. It appears Apple is ready to take on the Department of Justice over these claims they’ve conspired with others over pricing. What do you think? Is Apple innocent or does the DOJ have a case here?

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  • nosnoop

    Apple has no case here, they would have to settle with DOJ.  No matter what their original intention is, you are simply not allowed to fix the price, and artificially raise the price.   And there are very strong evidence that this has indeed taken place. 

    Apple is larger than Amazon and is well capable of fighting Amazon head on.  Of course, they are more worried about the profit margin – and that’s the whole point of their agency model.

    Before Apple’s agency model, publishers used to sell the ebooks at half the cover price, and retailers are free to set whatever they want for the retail price.  Imagine how much money we can save.

  • dav1dz

     But they didn’t set the price or fix the price. They set the pricing model and fixed the agency %. So basically they told all the publishers that Apple would take 30%, go nuts with how much you want to sell your books for so long as Apple makes 30%.

  • nosnoop

     But they did.  You can read up on the evidence that they had; especially those email communications.
    One of they key factor in convincing the publishers to sign up with the agency model is their fear of the “$10 problem” – i.e. Amazon selling ebooks below $10; and their worry about the erosion of perceived value in ebooks.  The agency model is pushed as a cure for this once and for all.  It would help to keep the price much higher than that set by Amazon.
    Those email evidence also showed that the publishers weren’t worried about the Amazon monopoly at all; they were more worried about the “$10 problem”.

  • Reader

    Amazon monopolistic? I don’t think so. They just offered what the public wanted before anyone else, and did it well. Apple is clearly in the wrong and should just cut its losses and admit it, maybe save face a little. This fiasco makes Apple look like a tantrum-throwing two-year-old. Not to mention sneaky and dishonest.

  • Okina

    I fully admit to having mixed feelings here.  In many ways it does read as a pick your poison scenario between Apple and Amazon for the book industry.

    One thing that hasn’t been mentioned too much on these boards are the details of the actual fear of an Amazon monopoly on the industry.  And as much as we want to dismiss the accusation, it is worth noting how others in the publishing industry outside of the big names (ie independent publishers and writers, small book stores, and other industry analysts) feel about Amazon.  These are stakeholders with as much on the table in this whole thing too, so it at least has to be respected.  And frankly they do deserve our a buck or two for their hard work if warranted.  The opinions though aren’t always kind.

    http://www.macobserver.com/tmo/article/the_danger_in_quashing_apples_anticompetitive_publishing_deal1/

    http://www.salon.com/2012/04/08/amazons_1_million_slush_fund/

    I found the reads in these links compelling. 

    That all said, I do concede that an illegal act is in fact an illegal act no matter the intention.  It’s in determining the punishment where things become debatable.  Stealing food to feed your family is still stealing, but the law can show mercy under the circumstances. 

    When I got into reading ebooks at the end of 2010 (eInk out of preference btw), I really wanted to go Canadian and buy a Kobo.  But the Kobo reader wasn’t a fit and I don’t get the vibe that the current Kobo Touch is much better.  Obviously being Canadian the Nook isn’t a great option unless you want to constantly load through your computer and USB.  I bought a Kindle 3 and then a Kindle Touch about 18 months later because they were simply the best such devices out there (and their customer service was simply outstanding).

    While I love my Kindle, the only issue that may put Amazon in any form of antitrust is their proprietary formats like lack of ePub.  Although to be fair we all know that iBooks, Sony, Kobo and Nook stores all have DRM in some form.  Wouldn’t it be nice to buy an eBook from any store and put them on any device (Kindle and Nook apps on iPad notwithstanding)?  I’d have no problem buying a Kobo book if I can put that on my Kindle.  I can have a choice that way.  And yes, I am aware of methods to break DRM, reformat, and side loading via USB.

    That all said, the only stake I have in this is as a consumer.  And the consumer in me says this; when I got my Kindle, I bought the entire Girl with the Dragon Tatoo trilogy for about $20, it’s now almost twice as much.  Bob McCown’s 100 Greatest Hockey Arguements I got for $10, it’s now $15.  And this is an eBook that I know isn’t available in the US.  Just don’t hold your breath on price changes coming too soon.

    http://news.cnet.com/8301-1023_3-57412592-93/whats-the-future-of-e-book-pricing/

    An eBook to me is for those budget conscience people who are curious about a title, but are on the fence over it and perhaps need a few dollars off as an incentive.  Also an ebooks might encourage people to pick titles that they wouldn’t otherwise because they were simply too embarrassed to have it out there, via book cover, what they’re reading.  Check the best sellers in the Kindle store to know what I mean.

    The last thing I’ll note is that there is a train of thought that states that if Apple pushes its luck enough, this antitrust lawsuit could expand beyond eBooks into other things.

    I want fair prices as a reader.  But I also want to be fair.  Plenty of shades of grey to me.

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