Apple's Steve Jobs conspired on e-book price-fixing, lawsuit

[nietzsche]

I'm tired of everybody making of Steve Jobs a saint. Seriously.

So I wanted to share this.

http://www.latimes.com/business/technology/la-fi-tn-ebook-apple-antitrust-publishers-20120411,0,3774448.story

[Lootifer]

Blergh, i'd support it except all the big boys involved in the industry are just as dodgy as each other; I mean sure apple are tossers and prob did this; but whos to say this wasnt just some smear campaign funded by Amazon?

At the end of the day im all for competition, but find myself channelling BBS/despair in these kinds of things.

[Symmetry]

I'm kind of tired of people saying that other people are calling him a saint while by far and away the majority of people are saying that the majority of people are calling him a saint, referring to nobody, and referring instead to the people who found him an impressive man, and a skilled businessman. But anyway...

Long sentence.

[Army of GOD]

I'm kind of tired of people saying that other people are calling him a saint while by far and away the majority of people are saying that the majority of people are calling him a saint, referring to nobody, and referring instead to the people who found him an impressive man, and a skilled businessman. But anyway...

Long sentence.

meh, I know a lot of people who praised the absolute shit out of him. Especially on Facebook.

f*ck Facebook.

[saxitoxin]

find myself channelling BBS

[Symmetry]

I'm kind of tired of people saying that other people are calling him a saint while by far and away the majority of people are saying that the majority of people are calling him a saint, referring to nobody, and referring instead to the people who found him an impressive man, and a skilled businessman. But anyway...

Long sentence.

meh, I know a lot of people who praised the absolute shit out of him. Especially on Facebook.

f*ck Facebook.

Yeah, but they don't think he was superhuman. A lot of this "For all you people who think Steve Jobs was a saint" nonsense, is directed at nobody, people liked him, and still like him, but nobody thought he was a saint, or even anything close.

[nietzsche]

I'm kind of tired of people saying that other people are calling him a saint while by far and away the majority of people are saying that the majority of people are calling him a saint, referring to nobody, and referring instead to the people who found him an impressive man, and a skilled businessman. But anyway...

Long sentence.

meh, I know a lot of people who praised the absolute shit out of him. Especially on Facebook.

f*ck Facebook.

Yeah, but they don't think he was superhuman. A lot of this "For all you people who think Steve Jobs was a saint" nonsense, is directed at nobody, people liked him, and still like him, but nobody thought he was a saint, or even anything close.

I don't react well to critiscism, so be careful...

[Symmetry]

I'm kind of tired of people saying that other people are calling him a saint while by far and away the majority of people are saying that the majority of people are calling him a saint, referring to nobody, and referring instead to the people who found him an impressive man, and a skilled businessman. But anyway...

Long sentence.

meh, I know a lot of people who praised the absolute shit out of him. Especially on Facebook.

f*ck Facebook.

Yeah, but they don't think he was superhuman. A lot of this "For all you people who think Steve Jobs was a saint" nonsense, is directed at nobody, people liked him, and still like him, but nobody thought he was a saint, or even anything close.

I don't react well to critiscism, so be careful...

Meh, have fun with the corpse.

[nietzsche]

I'm kind of tired of people saying that other people are calling him a saint while by far and away the majority of people are saying that the majority of people are calling him a saint, referring to nobody, and referring instead to the people who found him an impressive man, and a skilled businessman. But anyway...

Long sentence.

meh, I know a lot of people who praised the absolute shit out of him. Especially on Facebook.

f*ck Facebook.

Yeah, but they don't think he was superhuman. A lot of this "For all you people who think Steve Jobs was a saint" nonsense, is directed at nobody, people liked him, and still like him, but nobody thought he was a saint, or even anything close.

I don't react well to critiscism, so be careful...

Meh, have fun with the corpse.

I don't react well to passive agressive indiference either.

[BigBallinStalin]

Former Apple Inc. Chief Executive Steve Jobs and top executives at five major book publishers illegally conspired to raise the prices of e-books, costing consumers tens of millions of dollars, federal and state officials alleged in antitrust suits filed Wednesday.

The collusion began in 2009 and price fixing took effect with the launch of the iPad in early 2010, boosting the average cost of e-books by $2 to $3 each "virtually overnight," said Sharis Pozen, the acting head of the Justice Department's antitrust division.

I'm eager to see how they're going to build this case. They'll need more than that. Five major book publishers and Steve Jobs raised prices on the e-books, which they own and offer. If you don't like the higher price, then shucks, I guess you're not getting an ebook--from that particular publisher. If you don't like property rights, then I guess you should be outraged that people can decide how much to charge for their own items in particular places.


"costing consumers tens of millions of dollars." That's misleading. Coffee shops in my area increased prices on normal, hot coffee by about 10%-20% over the past half year. Did this cost consumers more money? It depends. The price increased, and some consumers will voluntarily choose to pay the higher price--others will not. This "cost to consumers" doesn't tell the whole story. Some people freely choose not to buy coffee from coffeehouses when their prices increases. What about them? How is that "cost" calculated? It isn't because that doesn't sound as terrible.

Should the coffeehouses be charged for "price-fixing" because they raised prices? ...

which gave the iPad maker a guaranteed 30% commission on each e-book it sold through its online marketplace

So, Apple provides the customer the convenience of having an online marketplace which offers many eBooks in one particular, easy-to-use online site. Apple receives a 30% commission for each ebook that is sold here. So what? I establish a market place on the internet, and some people want to sell their stuff on my marketplace. I say, "I dunno, other people want to do the same as you, so what can you offer me? 30% commission? Oh, okay, I'll sell your stuff in my market place. Where's the scandal in that? Am I forcing consumers to buy stuff at a higher price in my market place?


If the iPad consumer finds the prices too high on the apple store (and not worth the convenience), then the iPad consumer can still seek substitutes. He isn't forced to buy ebooks through that online marketplace. Nothing wrong was committed here.


This whole case is nonsense. Consider this: currently, Apple is in a legal battle against Samsung regarding patent infringement over its iPhone design. I would not be surprised at all to find that this "price-fixing" lawsuit was actually instigated by Apple's competitors--perhaps, it was Samsung.

[nietzsche]

Former Apple Inc. Chief Executive Steve Jobs and top executives at five major book publishers illegally conspired to raise the prices of e-books, costing consumers tens of millions of dollars, federal and state officials alleged in antitrust suits filed Wednesday.

The collusion began in 2009 and price fixing took effect with the launch of the iPad in early 2010, boosting the average cost of e-books by $2 to $3 each "virtually overnight," said Sharis Pozen, the acting head of the Justice Department's antitrust division.

I'm eager to see how they're going to build this case. They'll need more than that. Five major book publishers and Steve Jobs raised prices on the e-books, which they own and offer. If you don't like the higher price, then shucks, I guess you're not getting an ebook--from that particular publisher. If you don't like property rights, then I guess you should be outraged that people can decide how much to charge for their own items in particular places.

i think they have enough, also two publishers have settled already.

[BigBallinStalin]

Former Apple Inc. Chief Executive Steve Jobs and top executives at five major book publishers illegally conspired to raise the prices of e-books, costing consumers tens of millions of dollars, federal and state officials alleged in antitrust suits filed Wednesday.

The collusion began in 2009 and price fixing took effect with the launch of the iPad in early 2010, boosting the average cost of e-books by $2 to $3 each "virtually overnight," said Sharis Pozen, the acting head of the Justice Department's antitrust division.

I'm eager to see how they're going to build this case. They'll need more than that. Five major book publishers and Steve Jobs raised prices on the e-books, which they own and offer. If you don't like the higher price, then shucks, I guess you're not getting an ebook--from that particular publisher. If you don't like property rights, then I guess you should be outraged that people can decide how much to charge for their own items in particular places.

i think they have enough, also two publishers have settled already.

More importantly, that doesn't mean the law is still just. It means that the publishers value not prolonging these ridiculous cases.

[nietzsche]

Former Apple Inc. Chief Executive Steve Jobs and top executives at five major book publishers illegally conspired to raise the prices of e-books, costing consumers tens of millions of dollars, federal and state officials alleged in antitrust suits filed Wednesday.

The collusion began in 2009 and price fixing took effect with the launch of the iPad in early 2010, boosting the average cost of e-books by $2 to $3 each "virtually overnight," said Sharis Pozen, the acting head of the Justice Department's antitrust division.

I'm eager to see how they're going to build this case. They'll need more than that. Five major book publishers and Steve Jobs raised prices on the e-books, which they own and offer. If you don't like the higher price, then shucks, I guess you're not getting an ebook--from that particular publisher. If you don't like property rights, then I guess you should be outraged that people can decide how much to charge for their own items in particular places.

i think they have enough, also two publishers have settled already.

More importantly, that doesn't mean the law is still just. It means that the publishers value not prolonging these ridiculous cases.

Dude, you are into this shit, you should know that big companies have a nice set of tricks that can use against the consumers, and that consumerism is supposed to mean that the government must protect the consumers at all cost. That's why dumping and all that shit is forbidden. I mean, what's wrong with selling your stuff in less of what it costs you to make it?? Nothing, only that you kill the competence and then you can put whatever price you want and the consumer will have no other choice but to pay your price.

[BigBallinStalin]

Former Apple Inc. Chief Executive Steve Jobs and top executives at five major book publishers illegally conspired to raise the prices of e-books, costing consumers tens of millions of dollars, federal and state officials alleged in antitrust suits filed Wednesday.

The collusion began in 2009 and price fixing took effect with the launch of the iPad in early 2010, boosting the average cost of e-books by $2 to $3 each "virtually overnight," said Sharis Pozen, the acting head of the Justice Department's antitrust division.

I'm eager to see how they're going to build this case. They'll need more than that. Five major book publishers and Steve Jobs raised prices on the e-books, which they own and offer. If you don't like the higher price, then shucks, I guess you're not getting an ebook--from that particular publisher. If you don't like property rights, then I guess you should be outraged that people can decide how much to charge for their own items in particular places.

i think they have enough, also two publishers have settled already.

More importantly, that doesn't mean the law is still just. It means that the publishers value not prolonging these ridiculous cases.

Dude, you are into this shit, you should know that big companies have a nice set of tricks that can use against the consumers, and that consumerism is supposed to mean that the government must protect the consumers at all cost. That's why dumping and all that shit is forbidden. I mean, what's wrong with selling your stuff in less of what it costs you to make it?? Nothing, only that you kill the competence and then you can put whatever price you want and the consumer will have no other choice but to pay your price.

Name an example.

For now:

(A) "a company has tricked a consumer"
This is fraud, and should be charged as thus---and not charged as breaking arbitrary antitrust regulation.
But, you have to consider the expectations of the producer and the consumers. Am I tricked because I thought that the iPad version 1 had a camera? If the company said, Yes, but the product doesn't have a camera, then that's fraud. If the company said, "No" (which it did), yet I still thought it did, then who's to blame? The consumer, for being an idiot--or more accurately, for making his own mistake (edit 1 and 2).


(B) "what's wrong with selling your stuff in less of what it costs you to make it??"
"Nothing." You're right, assuming that the exchange is voluntary, i.e. not coerced--meaning that the company does not force you to buy its goods.


Besides, if a producer sells below his costs of production, several things can happen:

1) the consumers buy his products, thus reaping the benefit of paying a lower price. (what's wrong with that?)
2) depending on the good, the competition can simply buy the lower priced good, and use it as input into their production process, thus enabling them to sell their products for a lower price. (this would destroy the "price dumper." What's wrong with that? "Competence" or competition isn't killed.)
3) the price dumper can only sell below his cost of production for a certain period of time; otherwise, the producer will cause himself to be bankrupt. (aw, shucks, and competition isn't killed).
4) the price dumper somehow drives his competitors out of business:

How exactly? Name an example and show that it was illegal or wrong. Besides,

4a) for how long? What prevents competition from "rearing its ugly head" again?
4b) this assumes that the competition continued competing. The competition can take a one-month vacation, save their money, pay their employees for off-time, let the price dumper destroy his own profits, and then when the price dumper incurs too great a cost from dumping, the price dumper has to either go bankrupt or increase his prices. At that time, why then can't the competition simply restart competing?
4c) a sustained decreased price requires a sustained increased production--at a sustainable profit (edit 3). So, if the price dumper drives out competition and can maintain a lower price, then the consumers still benefit--at the lower sustained price! How is this wrong? Don't you care about consumers?


"the consumer will have no other choice but to pay your price."
This is false, unless the price dumper--and only the price dumper--somehow forces people to buy only his goods. Please explain that process. How would producer force consumers to buy only his goods?

[BigBallinStalin]

which gave the iPad maker a guaranteed 30% commission on each e-book it sold through its online marketplace

So, Apple provides the customer the convenience of having an online marketplace which offers many eBooks in one particular, easy-to-use online site. Apple receives a 30% commission for each ebook from particular publishers that is sold here. So what? I establish a market place on the internet, and some people want to sell their stuff on my marketplace. I say, "I dunno, other people want to do the same as you, so what can you offer me? 30% commission? Yes? Oh, okay, I'll sell your stuff in my market place.

Where's the scandal in that? There is no crime or injustice here. It's my marketplace, and sellers want me to make a commission for selling their product at my marketplace.

Am I forcing consumers to buy stuff at a higher price in my market place? No. Apple Store doesn't force you to buy eBooks from only its store. To say otherwise ignores reality. Consumers pay the higher price at the Apple Store for eBooks because they perceive that Apple Store is more convenient. That marketplace provides more value than competing marketplaces.


If the iPad consumer finds the prices too high on the apple store (and not worth the convenience), then the iPad consumer can still seek substitutes. He isn't forced to buy ebooks through that online marketplace. Nothing wrong was committed here.


This whole case is nonsense, (assuming that the "marketplace" refers to the Apple Store.)

[BigBallinStalin]

Here's another example:


I create an art gallery, which is a marketplace. Many groups of people want to sell art, which they own, in my art gallery. I want my gallery to earn a profit because I need income in order to pay for the gallery and to live however I want to live, so I'm not going to sell works of art for a price which only the art-owners set and then take all to themselves.

Group A offers me their works of art, and I'll receive no portion of their sale (i.e. I receive no commission from the sale).

Group B offers me a 30% commission. I agree to sell group B's art in my art gallery, and I reject Group A's offer.

According to the logic of the claims made in the article, I should be tried for breaking antitrust law because I "fixed" prices. Any art gallery which splits the revenue of a sale with the art-owners should be tried for breaking antitrust law. Is that just? No. Is this law moral? No. So much for the case against Apple.
If you disagree, then please be logically consistent and explain why all art galleries should sell the works of art of all owners at the same price.


__________________________________________________________________________________

Now, suppose Group B set prices at my art gallery lower than the prices of art gallery B, which agreed to these prices--at an earlier time.
("Amazon cheered the lawsuits and the settlements. The suit portrayed Amazon, which makes the Kindle e-reader, as a victim of the price-fixing because they could not charge lower prices and ostensibly lost e-book sales to Apple.")

Sorry, Amazon, but that is the nature of competition, and you have to responsible for your own poor decisions. Amazon signed that contract. They agreed to the prices set by the owners of those eBooks (note: these owners are not all owners, so this isn't even a cartel nor is competition being eliminated). If Amazon disagrees with the contract, then they should try to negotiate with the other party of the contract. If they can't, then that's Amazon's mistake for signing into a contract, and after the contract expires, maybe Amazon will be the wiser.

The right thing for Amazon would be to convince the publishers that if they lowered the prices, the publishers could gain more income. If not, then it makes no sense for the publishers to lower their prices in the already agreed to price within Amazon's Kindle market.


Think of this from the publishers' perspective. The prices vary because their expected profits from the Apple and Amazon marketplaces vary. The iPad and Kindle are different markets with different customers. It's not the same, and it's insane to force them to set the same prices because the risks vary, the anticipated demand varies, so the expected profits vary. The determined price depends on anticipated factors which are different for both marketplaces.

Setting the same price for both markets could be disastrous for the publishers because such a price control (which it is, as mandated by the Justice Department) can create inefficiencies and losses for both the consumers and producers of both of these markets. The providers of these marketplaces and the sellers of goods in these market places have more relevant knowledge on the "right" price for each market place. The "right" price goes through a trial-and-error process--depending on the actual decisions made by the consumers of the iPad or Kindle. Let current and future consumers decide, as they respond to relative price changes. (if you disagree, then so much for consumers' sovereignty).


Where is the crime here? I mow lawns for a living, and there are many market places for me to sell my services in; however, I am making a decision regarding only two particular marketplaces for me to sell my services in. The market providers of A agree to me charging $20 there, and the market providers of B agree to me charging $30 in their market. I agree to both, thereby setting different prices in different markets. Should I be tried for breaking antitrust law? ( I = a few publishers in this situation). If yes, then anyone who sells the same good at different prices in different markets should also be tried for breaking antitrust laws, but that doesn't happen because it would be unreasonable, and it's unreasonable as this case is.

All producers of coffee beans must sell their beans at the same price for all markets. Does anyone see the problem in this? If "yes," then please reread the above three paragraphs.

There are other providers of lawncare services. There are other markets for consumers of either the Kindle or iPad to purchase eBooks--within each of those marketplaces. There's still competition on different margins.

(Also, there's the issue of intellectual property rights, which to me, for these publishers of books, should be significantly lower than the 50+ year claim that they enjoy, but that's another post for another time).



tl;dr


The Justice Department has no idea on how to determine the "right" price, nor does it have an incentive to understand which price is most efficient (thus better for the consumer) for each market. Yet somehow, in this strange world, some people feel that the Justice Department, or in this case the government, can set prices more efficiently. If not more efficiently, then what? More fair? What's the criterion for that? All prices of good A should be the same, regardless of the marketplace and its various levels of demand and supply? That's insane. That leads to inefficiencies which create unnecessary costs that would be born by both producers and consumers. How is that fair? It isn't. It's unjust.

Somehow, these people believe that "justice" is being served in order to benefit the consumer. These people are mistaken. They have no idea why prices are set--and neither does the Justice Department, which is the organization that is praised as "protecting" consumers.

This is irresponsible. No justice is being meted; it's just a theater for "justice." This is merely the means through which crony capitalists can use the Justice Department (or antitrust regulation) in order to beat down their competitors. If there is no crony capitalism involved, then this is still another means where voters perceive that their legislators are "doing something," which instills faith in the voters for believing in the rhetoric of politicians. But these voters don't understand how prices are set, nor do they understand the consequences of price-fixing by the government itself. Their ignorance is exploited to the advantage of many politicians and crony capitalists. It's an old story with a new face. Enjoy your Thursday morning!

[BigBallinStalin]

Quad-post? Oh yeah.


Consider this:


Amazon has a contract with certain publishers which sets a price that is higher than the price which publishers set with Apple.

Shouldn't Amazon be tried for price-fixing? Their price for eBooks is higher than Apple's! That's price-gouging! Punish Amazon!



Recall the joke:

There are three businessmen in prison for breaking antitrust law.

"Why are you in prison?"
I set my prices higher than my competitors, so I was tried for price gouging.

"Why are you in prison?"
I set my prices lower than my competitors, so I was tried for predatory pricing.

"And, why are you in prison?"
I set my prices at the competitors' prices, but then I was tried for collusion.


Oh-ho-ho! Isn't that grand!

[nietzsche]

BBS

I assume you are practicing your convincing skills for your lawyer test.

You seriously cannot believe this.

What makes great the market system is competition, but companies can make a deal to stop competing and set a higher price, and the consumer has no other option than to pay the higher price. That's the spirit of the law.

Same with monopolies, same with dumping. They must be enforced. If producers are in competition all the time they need to evolve, create new ways off making the product cheaper to produce or better. Or die.

Whether there's enough proof or not, well, 2 publishers have settled already!!!

I must admit I don't know the wording or the terms of the rule but I understand it in spirit.

The collusion began in 2009 and price fixing took effect with the launch of the iPad in early 2010, boosting the average cost of e-books by $2 to $3 each "virtually overnight," said Sharis Pozen, the acting head of the Justice Department's antitrust division.

[Lootifer]

Blergh, im getting drawn in but I dont want to...

What you have to understand Niet is BBS doesnt feel there should be ANY anti-competitive/anti-trust laws or regulation; and in a pure sense he's correct: Given a long enough time frame the free market will shake itself out in the end.

But this doesnt consider the corpses left on the side of the road getting there, nor does it consider rational players becoming irrational through [well targetted - yet arguably immoral/unethical] marketing.

[john9blue]

i'm not sure who to believe about the effectiveness of anti-trust laws

my beliefs will go to the highest bidder!

except if your name starts with a vowel, then you have to pay twice as much money.

[nietzsche]

No way.

I mean, there are people with huge amount of dough. Corporations can withstand years selling a single product for less of what it cost to make it only to drive a competitor out of business, given they are sitting in a big pile of cash or that their other products sell well.

This is some sort of protection we do need from governments, because we cannot trust on the good will of the greedy.

And it might be that in due time things correct themselves, yes: 20 years later and after a civil war.

It's only natural that Sellers would want to sell their product for more money. If they can come up with a scheme to do it they will.

Then I think the question here is a bet, a bet of how quickly can a system without anti-trust regulation would correct itself for the good of the whole? I think I could polarize a society even more, resulting in a catartic civil war.