Apple calls e-book settlement "unfair, unlawful, and unprecedented"

[Rick]

In a statement issued yesterday, Apple lambasted the Department of Justice over supporting a government-proposed settlement intended to resolve possible e-book price-fixing practices. The company criticized the settlement as "fundamentally unfair, unlawful and unprecedented", accusing the DOJ of attempting to rewrite its bargained-for contracts with virtually no due process. For good measure, Apple also managed to throw Amazon under the bus as an industry monopolist.

The statement's strongly-worded title for Section II, "The settlement unlawfully penalizes Apple without a trial", does a fair job of summarizing Apple's foremost complaint. The company's letter goes on to accuse the U.S. government of trying to solve a problem without making any effort to actually determine if Apple really did violate antitrust laws to begin with.

In its statement to the court, Apple came out swinging in its introduction paragraph:

It [U.S. government] seeks to terminate and rewrite Apple’s bargained-for contracts before a single document has been introduced into evidence, before any witness has testified, and before the Court has resolved the disputed facts. Once its existing contracts are terminated, Apple could not simply reinstate them after prevailing at trial. The Court’s decision would be irreversible. Nullifying a non-settling defendant’s negotiated contract rights by another’s settlement is fundamentally unfair, unlawful, and unprecedented.

As Apple's iPad began to sell en masse, publishers started shifting to an agency model for their e-books. An "agency model" empowers publishers to set retail prices rather than retailers themselves as opposed to a "wholesale model" where retailers are free to set their own pricing. The agency model is often to used to protect the value of goods -- an important goal to modern publishers who are now selling near-infinitely-reproducible electrons with no real intrinsic value.

Federal prosecutors originally filed the antitrust lawsuit in April of this year. The defendants, who included five major book publishers and Apple, were accused of conspiring to artificially inflate digital books. The same day, three of those publishers agreed to settle based on the proposed terms, but a stalwart Apple and two other publishers have remained defiant since.

Permalink to story.

https://www.techspot.com/news/49809-apple-calls-e-book-settlement-unfair-unlawful-and-unprecedented.html

 

[aspleme]

When an e-book costs just as much as a print copy, there is something wrong. The infrastructure required for e-books is far less than that of print books. When you purchase a paper book, the retailer loses a copy. With e-books, a copy is simply generated for you. Storage is also very different (which is why I bought an e-reader in the first place... I don't have space for more books).
An e-book doesn't require printing.
An e-book doesn't need a physical store.
An e-book cannot (in most cases) be resold to a used book store, or purchased from one.
An e-book is apparently not able to go on sale.

So why do publishers think they are justified charging the same price?

 

[Guest]

Whether digital or analog, goods are worth what people are willing to pay for them. Who cares if delivery, storage, etc. is cheaper. If people are willing to pay the price they are asking, that is what it is worth. Think it is too much for a digital version of a book--don't buy it. If the rest of the world agrees, publishers have no option but to lower the price.

 

[Guest]

@ Guest

That wasn't the issue. The old model was to offer to sell to amazon x book at x cost per copy. They didn't like amazon's selling so low, so with apple, the publishers worked together aka colluded illegally and tried were trying to set / manipulate the price.

 

[Wagan8r]

When an e-book costs just as much as a print copy, there is something wrong. The infrastructure required for e-books is far less than that of print books. When you purchase a paper book, the retailer loses a copy. With e-books, a copy is simply generated for you. Storage is also very different (which is why I bought an e-reader in the first place... I don't have space for more books).
An e-book doesn't require printing.
An e-book doesn't need a physical store.
An e-book cannot (in most cases) be resold to a used book store, or purchased from one.
An e-book is apparently not able to go on sale.

So why do publishers think they are justified charging the same price?

Is the information contained within a physical book more valuable than the exact same information contained in an e-book? No. It doesn't matter what the associated costs are in delivering said information, the information itself is what has worth and is the reason for purchasing a document, whether physical or otherwise.

Having a book in physical or digital form is a matter of personal preference, and at the end of the day, that is what drives prices of products. Are you saying that a first edition of a book shouldn't be more expensive because it costs just as much to print as the last edition? There are more factors than production costs that go into the "value" of something.

 

[Guest]

The point here is that by simple logic an ebook should be cheaper once you stop taking into account the production and distribution of the physical book.

I'm not talking about being 50% cheaper or so, just a 10% or 20%

But this article in specific, talks about apple getting the shaft for conspiring with some publishers to inflate ebook prices beyond physical copies.

Here's a quote that sums pretty much everything, courtesy of Doosh Jobs:

‘We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.’

 

[Guest]

"It doesn't matter what the associated costs are in delivering said information, the information itself is what has worth and is the reason for purchasing a document, whether physical or otherwise."

Erm. No. The information has it's own value. Paper has it's own value. Binding has it's own value. The delivery trucks have their own value. The person working in the store has a wage. The stores where books sit on the shelves have a rent price.

When you buy a physical book, you aren't paying for the just the information. You're paying for the information + whatever value they assign as margin to cover up their extra costs and make a profit.

There are next to zero extra costs in selling a book via digital means (certainly much less than via traditional physical means). So why should you be paying more than just the information cost on something where there aren't any other costs?

 

[Guest]

Apple sux Greedy and need to be punished

 

[MilwaukeeMike]

" So why should you be paying more than just the information cost on something where there aren't any other costs?

Because.. the cost of the book depends on things that exists on both paper copies and ebooks, like Author advances, design, marketing, publicity, office space, and staff (from the link below)

We can sit here and argue about it... or you can read a great article that explains it all from CNET. It's a good read and a good business lesson.
http://news.cnet.com/8301-1023_3-57412587-93/why-e-books-cost-so-much/

 

[NeurotechHD]

This is an interesting turn of events. Why would the DOJ want to settle? I bet it has something to do with the election. If Obama's DOJ slams Apple with price fixing it could affect votes, I'd imagine.

 

[Guest]

While their own misuse of police powers, improper searches, and constant whining to the courts is all fair and just of course. Whiny ***** finally got what was coming to him. But guess what folks, give it six month and Apple's friends in Juztice department will fix this for him.

So worry not, apple will prevail.

 

[Guest]

Who buys ebooks? PDFs are such small files, and just a specially crafted google search away!

 

[NTAPRO]

isnt there some saying about the pot being black and kettle or something >_>

lol unfair...

 

[Tanstar]

This is why I don't own an e-reader. I love my hardbacks, but some books are never made in hardbacks and trying a new author via an e-book would be great. Can't see paying $9.99 to $15.99 for a digital book when I can get a HB for $15 or less and a paperback (that I can trade back in for credit) for $7.00.

 

[PinothyJ]

Whether digital or analog, goods are worth what people are willing to pay for them. Who cares if delivery, storage, etc. is cheaper. If people are willing to pay the price they are asking, that is what it is worth. Think it is too much for a digital version of a book--don't buy it. If the rest of the world agrees, publishers have no option but to lower the price.

Physical copies are not analogue ...

 

[Tygerstrike]

Apple sues so many companies and now they turn around and cry foul because there is a ruling against them. Sounds more like sour grapes then anything else. I am pretty sure I saw/read that Apple had used strong arm tactics in order to get those contracts.

 

[Guest]

There is a simple tried and true saying pass your savings on to the customer to make things ethical. Like encourage less carbon foot print and less trees cut down which actually would make sense. They are after all produce the very air our sorry as s e s are enjoying to breath every day. But I guess that mantra only maters when you are selling a product mr Apple. So this time the justice dept. Called you an your bull crap and stuck it to you and your gang. To the user that argues that the info is worth the same. So is on your stupid video games. But why should books be different. If you can come down on electronic programs and video games why not books. What is so different about books. Every sort of digital content is priced lower that is only a download so why not books? We are so environmentally friendly when it is a sales pitch. So typical of the marketing w h ores.

 

[Guest]

In my opinion television and the computer were the two worst inventions on the planet. It makes people stagnate and do nothing with their lives. Just sit on a couch and actually fuse to it like the 1600 pound person that had to be lifted out of his house. That is where all of you headed. Staring at a screen shooting at stupid things bouncing around. This is the most miserable existence in the whole universe. Billions of lives waisted on the internet arguing about nothing. The most awesome game of life. Why are we here? To google and to argue over nothing worth while. The answer to life's mystery. The secret of this universe.

 

[psycros]

Billions of lives waisted on the internet arguing about nothing. The most awesome game of life. Why are we here? To google and to argue over nothing worth while. The answer to life's mystery. The secret of this universe.

And yet here you are.

 

[Guest]

Apple has become yet another greedy fat corporation, but unlike others, it has managed to delude people into loving it. How sick is that.

 

[Doctor John]

Guest said: ↑

Billions of lives waisted on the internet arguing about nothing. The most awesome game of life. Why are we here? To google and to argue over nothing worth while. The answer to life's mystery. The secret of this universe.​

And yet here you are.​

LMFAO, thank you, I needed cheering up.

 

[aspleme]

Because.. the cost of the book depends on things that exists on both paper copies and ebooks, like Author advances, design, marketing, publicity, office space, and staff (from the link below)

We can sit here and argue about it... or you can read a great article that explains it all from CNET. It's a good read and a good business lesson.
http://news.cnet.com/8301-1023_3-57412587-93/why-e-books-cost-so-much/

That argument is very good for first release of hardcover books (ignoring the fact that even print versions are almost always sold at 30% off at initial release). However, it doesn't account for later sales or mass market paperback editions... which is what most people end up buying. The article also deliberately ignores the most important aspect of the wholesale model: books reduce in price with a greater number of sales. The costs are not the same for production nor does the publisher or retailer have to worry about getting rid of excess copies that are just sitting on shelves. There is no reason to set the price of e-books equal to mass market paperback and fix the price there except for greed.

 

[gwailo247]

While I don't buy e-books because for the same price I'd rather get a physical copy, the reality is that if people buy them at that price, there will be no incentive for the price to get lowered.

And to protest this price fixing, I'm going to pirate the complete works of Shakespeare.

Suck it book publishing cabal!

 

[Doctor John]

And to protest this price fixing, I'm going to pirate the complete works of Shakespeare.

Well I'm going to SCAN them - we'll show them, eh?

 

[Guest]

Another example for why corporations must be regulated. Time and time again they have shown that when given the choice, they will choose what is best for their bottom line rather than what is best for the public.