Apple's guilt in e-book price fixing conspiracy upheld by appeals court

Corsairs

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(NOTE: I hope that I'm posting this in the right sub-forum. There are so many to choose from ...)

Reuters said:
By a 2-1 vote, the 2nd U.S. Circuit Court of Appeals agreed that the conspiracy violated federal antitrust law, and that the judge acted properly two years ago in imposing an injunction to prevent a recurrence.

The ruling would force Apple to pay consumers $450 million under a 2014 settlement of a class action with 33 state attorneys general and lawyers, unless it files another appeal and wins. The settlement was contingent on Apple's civil liability being upheld. ...

Writing for the majority, Circuit Judge Debra Ann Livingston said Apple's actions "unreasonably restrained trade," rejecting arguments that the company acted independently with its own business interests in mind.

"The district court did not err in concluding that Apple was more than an innocent bystander," Livingston wrote.
I don't doubt that Apple did in fact conspire with the big publishing houses to inflate e-book prices as a means of combating Amazon's typical $9.99 price point for new releases. What I'm wondering is if this was actually a bad thing. Amazon has such a stranglehold on the market, and this ruling is going to make it harder for Apple to compete. Yes, Apple probably shouldn't be "cheating" to compete, but it's also not in most anyone's best interest for on company (in this case, Amazon) to have a near-monopoly on the e-book business. Here's what the dissenting judge had to say:

U.S. Circuit Judge Dennis Jacobs said:
"Apple took steps to compete with a monopolist and open the market to more entrants, generating only minor competitive restraints in the process."
"Minor competitive restraints" is a debatable distinction (inflating prices from $9.99 to $14.99 might not be considered "minor" by everyone). Yet there's some truth to the notion that Apple was simply searching for a way to level the playing field with a vastly more powerful player, and that this ruling might make competition with Amazon more difficult in the future - not just for Apple but for all the players in the e-publishing business.
 

Arpeggio

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I'm on Apples side on this one. You can't enter a market in which someone is perpetually "loss leading" or should I say perpetually losing money (loss leading refers to a tactic for greater gains in the end).

The problem with Amazon is that non-profits are not supposed to be on the stock market, no profit is against the whole point of offering shares and loses some control of a company to no advantage. The catch with Amazon though is that it's stock price is based entirely on increasing turnover with the promise of future profits (as has been the case for the last 20 years of its existence).

They start talking about Amazon at 20:20 on this video:

https://www.youtube.com/watch?v=Qx4RFVfdCNc

$.00? per page (or whatever it is) on KU, that's what you get, it needs to squeeze its suppliers. If Amazon had its way it would sell everything at a loss with suppliers getting peanuts. By lowering prices all the time it gains market share, and with more market share Amazon has more leverage to lower what it pays it's suppliers / authors, 3rd party sellers etc. try doing the pay per page KU thing 3-4 years ago? fat chance.

Regardless if that loss was millions or a few billion, so long as Jeff Bezos and mates sell the stock before it pops. Revenue growth is stalling recently for Amazon, as soon as it goes down it's bubble bye bye cash out. Tis' all planned I tell ye!

tumblr_m4qaw89Kdi1qz9y69o1_500.png
 
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kuwisdelu

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I'm on Apple's side, too.

Someone needed to break Amazon if we were ever to have a competitive ebook market.

It's a shame they had to break the law to do it. IMO Amazon is still more evil.
 

Jamesaritchie

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Apple clearly cheated, clearly broke the law, and this can't be allowed for one company without allowing it for every company. The law applies to everyone, or it applies to no one.
 

Arpeggio

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I'm on Apple's side, too.

Someone needed to break Amazon if we were ever to have a competitive ebook market.

It's a shame they had to break the law to do it. IMO Amazon is still more evil.

Amazon, a wall street darling, is often known for dodgy accounting. If the FCC investigated them properly they would get cited for many accounting violations. This factor contributes to the conditions under which Apple broke the law in attempt to compete.

Amazon's revenue is slowing, eCommerce only recently got above 6% of all commerce, Walmart et al are starting to pay attention (and all the other nasty companies to a greater or lesser extent depending on ones own personal view, obviously I'm speaking in relative terms)

I would not be surprised if various places with deep pockets and can afford to loss lead (in the conventional way) are waiting to move in when they smell blood and Amazon's revenue starts falling (the top line in the chart I posted above). The perpetual "loss leading" of Amazon for an end game monopoly is not realistic, unless they get a monopoly with barriers to entry and could charge higher prices and can't be undercut, which is usually illegal.

Temporary loss leading for the sake of accelerating decreasing Amazon revenue to help their stock price get a good kicking might be more interesting. Personally this is what I would like to see. All that said, Amazon is often not the cheapest nowadays anyway (albeit not relevant to their stock price yet, as long as Jeff Bezos keeps starting up different stunts).
 

Old Hack

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Arpeggio, please resize that image. The maximum allowed on AW is 400px x 400px and that one's 800px × 600px. Thank you!
 

Arpeggio

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Arpeggio, please resize that image. The maximum allowed on AW is 400px x 400px and that one's 800px × 600px. Thank you!

Thanks for telling me. 415 by 246 was the smallest I could find I hope that is OK. Amazon hasn't made a profit for so long I couldn't find any charts that were shorter horizontally.
 

Gilroy Cullen

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If Amazon had its way it would sell everything at a loss with suppliers getting peanuts. By lowering prices all the time it gains market share, and with more market share Amazon has more leverage to lower what it pays it's suppliers / authors, 3rd party sellers etc.

Amazon - The Wal-Mart of the Internet.

(Fictitious future merger: Amazon and Wal-Mart, cornering every market, and putting all competitors out of business...)