Discussion Forums - eBook readers eBook readers

Topic: Lawsuit claims Apple and publishers colluded (ebooks) 22 Nov 2014

Club rule - Please, if you cannot be courteous and respectful, do not post in this forum.
Page:   Unlock Forum posting with Annual Membership.
Subject: Lawsuit claims Apple and publishers colluded (ebooks) 22 Nov 2014
Date Posted: 8/11/2011 10:50 AM ET
Member Since: 8/18/2005
Posts: 7,977
Back To Top

Article Here.

A Seattle law firm has filed a class-action lawsuit accusing Apple and five book publishers of engaging in price fixing around sales of electronic books. The suit, filed today in U.S. District Court in Northern California, alleges that Apple and HarperCollins Publishers, Hachette Book Group, Macmillan Publishers, Penguin Group Inc. and Simon & Schuster “colluded” on book prices in order to force Amazon.com to “abandon its pro-consumer discount pricing.”

 

This'll be interesting, but don't know if it'll actually go very far in the US. The same publishers have been/are being investigated in the EU with charges of price fixing ebooks there.

Article Here. (04 Mar 2011)

The EU competition spokeswoman, Amelia Torres, said: "We have suspicions of collusion to keep prices high. But if our suspicions prove to be founded, this would have an impact across the EU because ebooks are sold across borders." She added that the firms involved face fines if the commission finds "hard evidence".

 

 



Last Edited on: 11/22/14 2:55 PM ET - Total times edited: 10
Date Posted: 10/6/2011 5:25 PM ET
Member Since: 8/18/2005
Posts: 7,977
Back To Top

More news as the lawsuits grow, and they haven't even decided where to have the cases heard. I'm not sure that the extra lawsuits mean anything other than others want to be in on the action. But it's being looked into not only as 'Price Fixing' here, but in Europe as well.

 

Price-Fixing Case Against Apple, Major Book Publishers Mushrooms

At the heart of the flurry of lawsuits is a challenge to “agency pricing,” the e-book pricing model under which book publishers set their own prices for e-books, paying the e-tailer (“agent”) a commission. Agency pricing requires e-books to be priced the same across all e-bookstores, meaning an e-tailer like Amazon can’t put a book from a participating publisher on sale to gain an edge over a competing seller—only the publisher can do that; and if an e-book goes on sale at one e-bookstore, it has to be priced the same at all others.

.....

“They can’t just cry, ‘we’re losing business’,” said Barbara Sicalides, an anti-trust expert at Pepper Hamilton. She says publishers and Apple will likely have to produce sensitive business records to prove that the agency pricing model is ultimately necessary to protect consumers.

Nothing is going to happen anytime soon in the case. The panel of judges is not meeting until December and will likely take weeks to issue a decision about venue. But the arrival of the Kindle Fire and the robust growth of the e-book market means there will be even more at stake when (and if) the class action suits go to trial.

 

Date Posted: 10/6/2011 8:15 PM ET
Member Since: 4/7/2008
Posts: 15,690
Back To Top

Interesting...

Date Posted: 10/7/2011 11:06 AM ET
Member Since: 5/10/2009
Posts: 826
Back To Top

This lawsuit is more likely to succeed in the EU than it is to work here in the US.  The EU has stricter laws when it comes to price fixing and monopolies.  There's a lot more precedent in the US for the agency type model though it's usually applied to high priced luxury items, not every day items like books.

I do hope that it succeeds though.  Most prices are still reasonable when you consider the math, though higher than they would be without the agreement, but I've seen several ebooks going for $18 on a book that has was released in a $8 MMPB edition several years prior.

It baffles me what the publishers were trying to accomplish with the Agency model.  I get that they were trying to raise the perceived value of books but that doesn't work when just one form is more expensive.  It seems useless when they can't control the prices of the paper copies as well.  I wonder if that argument is going to surface in the court case?



Last Edited on: 10/7/11 11:11 AM ET - Total times edited: 1
Date Posted: 12/6/2011 2:36 PM ET
Member Since: 8/18/2005
Posts: 7,977
Back To Top

Just added a note, that the investigation seems to be spreading...

Appe in EU e-Book  Market Probe

 

The UK's Office of Fair Trading has already carried out a similar inquiry.

The character and terms of agreements that the companies made with agencies are to be examined for breaches of EU rules on cartels, the Commission said.

The Office of Fair Trading has now finished its own investigation, but continues to work closely with the Commission, which is extending the scope of the inquiry across the whole of Europe.

 

Doesn't say much new, (like what the Office of Fair Trading found, now that they've 'finished its' own investigation') but looks like more agencies are getting involved in the investigation on price-fixing in the EK.

Probably be years, I think, before they have any results to any of this, one way or another.

Date Posted: 12/7/2011 10:04 AM ET
Member Since: 3/13/2009
Posts: 8,022
Back To Top

Thank you for keeping this thread up to date. 

Date Posted: 12/7/2011 2:41 PM ET
Member Since: 8/18/2005
Posts: 7,977
Back To Top

Thank you for keeping this thread up to date.

No problem. I'm interested myself to see what happens. I have no idea if they'll find anything worth procecuting or not.

 

Date Posted: 4/5/2012 8:29 PM ET
Member Since: 8/18/2005
Posts: 7,977
Back To Top

Apple, two publishers resist ebook settlement

The Justice Department is nearing a settlement with publishers over allegations of ebook pricing, but finalizing the deal is proving problematic as Apple and two publishers are balking at the terms of the deal. Amazon will be permitted to once again discount ebooks to its customers as a result.

Penguin Group and Macmillian have joined Apple in resisting the settlement, the Wall Street Journal reports. The deal voids the contracts Apple signed with publishers in 2010, and permits a return to "wholesale pricing", where the retailer determines the price.

.....

Such terms are likely unpalatable to the publishers as prices would drop significantly on ebooks and give retailers broad power on determining value. For Apple, it would force the Cupertino, Calif. company to drop its own prices in response to Amazon's moves, and likely sell some ebooks at a loss.

 

In court documents Apple indicates it has no desire to do this, and may exit the ebook business as a result of a return to wholesale pricing. While a settlement certainly seems closer at this point, WSJ sources call the situation "fluid", and the Justice Department could still file suit at any time.

From what I've read on other forums over the past year, I think Apple may well walk away from their eBook store rather than give up control. I know the rumors have been that their ebook sales have been pretty bad, and that they may already be spending more on keeping it running than they're making.

I know I've only bough one book from them, and won't do it again.

Date Posted: 4/6/2012 12:09 AM ET
Member Since: 3/13/2009
Posts: 8,022
Back To Top

I wouldn't miss their ebook sales.  I've had no interest in purchasing them from Apple.  Of course, I've only purchased 1 ebook (it was an accident, actually) from the Sony store even though I've had my EReader for almost 5 years now.

Date Posted: 4/11/2012 12:43 PM ET
Member Since: 10/26/2011
Posts: 2,110
Back To Top

In court documents Apple indicates it has no desire to do this, and may exit the ebook business as a result of a return to wholesale pricing.

Boo hoo hoo, Apply who is worth hundreds of billions of dollars is going to lose a few bucks.  What's strange is that ebook prices for non Agency publishers really haven't changed that much....but no, they're going to go broke!  Give me a break lol.  They range anywhere from $2 to $10 depending on which other formats are available and what the price is for those, and that hasn't really changed much the past few years.  I wouldn't buy ebooks from Apple if they paid me to because I have found this whole thing so distasteful.

Date Posted: 4/11/2012 1:14 PM ET
Member Since: 4/7/2008
Posts: 15,690
Back To Top

I have an iPad and have never bought an ebook from Apple (and I don't plan to) so I really couldn't care less if they leave the business.



Last Edited on: 4/11/12 1:14 PM ET - Total times edited: 1
Date Posted: 4/11/2012 3:44 PM ET
Member Since: 4/7/2008
Posts: 15,690
Back To Top

Latest news!

Justice Dept. Sues Apple and Publishers Over E-Book Pricing; 3 Publishers Settle

 

 

Date Posted: 4/11/2012 6:52 PM ET
Member Since: 10/26/2011
Posts: 2,110
Back To Top

,and we took these actions knowing that Hachette itself would make less money than before the adoption of agency.”

Uh huh, right...you made so little money that you just had to settle to make back more!  That makes perfect sense!

“After careful consideration, we came to the conclusion that the terms could have allowed Amazon to recover the monopoly position it had been building before our switch to the agency model,”

Ooohhhh, so going away from the agency model is in no one's interest but Amazon?  Now its all becoming clearer....

Many publishing executives have worried that without the agency model Amazon would gain a monopoly over e-books, because the wholesale model would allow the giant retailer to sell e-books for less than it paid publishers — a practice that smaller companies would not be able to imitate.

Oh yes, many companies make millions of dollars for selling something for less than what they bought it for.  Oh wait, that doesn't really make sense.  Amazon had a near monopoly on ebooks because it had the best ereader and best selection at the time, that is no longer the case.

"Scott Turow, the president of the Authors Guild, warned in an open letter last month that the Justice Department was “on the verge of killing real competition in order to save the appearance of competition.”

So, by dictating a price and refusing to allow anyone to change that price they were increasing competition?  Am I the only one who's brain hurts?

 

Good Lord, I'm more confused by these people's logic now than ever!  Just admit you wanted to screw people out of more money and move on...because none of these statement make an ounce of common sense.

Date Posted: 4/11/2012 10:16 PM ET
Member Since: 8/18/2005
Posts: 7,977
Back To Top

Good Lord, I'm more confused by these people's logic now than ever!  Just admit you wanted to screw people out of more money and move on...because none of these statement make an ounce of common sense.

If you think that's convoluted logic, you should look up the publisher's explination of why ebooks aren't any cheaper to make than physical books.

(And then ignore the fact that they take submissions in electronic format, and work the book up on computers before a physical printing, so the spell-checking and proof reading (if any is done at all) is already done for the physical book....)

(Then ignore the fact that physical books have to have paper bought, then printed, bound, shipped, and returns paid for and then extra books and returns shredded and disposed of.)

(Then figure in that they believe an ebook sale is a lost Hardback sale, (even if the customer wouldn't have bought the Hardback to begin with) so they have to make up the lost money somehow...)

Seriously, very few people buy their explinations about why they price so high. They do because they can. Duh.

You can only imagine the amount of damage they figure sites like PBS do to them. They probably want ebook to have to cover that damage too.

 

 

Date Posted: 4/11/2012 10:42 PM ET
Member Since: 10/26/2011
Posts: 2,110
Back To Top

Seriously, very few people buy their explinations about why they price so high. They do because they can. Duh.

It would be so refreshing to hear them admit it lol.  Just admit it, you wanted to make more money!  There is no logic or common sense reason!  But of course they won't because the truth would drive away readers in droves they figure.

Date Posted: 4/13/2012 12:14 PM ET
Member Since: 4/7/2008
Posts: 15,690
Back To Top

The whole thing is so ridiculous. Since when it's the wholesaler's job to worry whether the consumers have different places to buy their products? But I guess looking "altruistic" is better PR than outright saying they just wanted to charge more than $9.99 per ebook.

And I'm not at all worried about the monopoly business. Ebook selling doesn't have such a higher barrier of entry that nobody else can do it and it's a matter of the consumer having the choice of picking whoever the hell they want. If the consumer chooses Amazon because they are cheaper than everybody else, then I don't care whether Amazon has a monopoly.

Apple has a 70% share of the MP3 player market because they were the ones that did it best and the consumers agreed. Should the music business be colliding to make it difficult for Apple so Zune does better?

Give me a break.

Date Posted: 4/18/2012 10:13 PM ET
Member Since: 1/8/2007
Posts: 8,139
Back To Top

I'm not sure I completely agree with this opinion piece regarding the lawsuit, but I thought it was interesting reading and that I would share it here.

The thing that I don't understand is the following: there was a LOT of hooplah over the fact that Amazon is selling its e-book hardware at below cost and depending upon this pricing scheme to ensure a profit in the long haul. But the wailing now is that Amazon will sell the e-books at below cost in order to shut down other book distributors. Well, they can't do this on everything. Either they will have to increase the price of the hardware or the books. They can't take a loss on all sales for the length of time it would take to put them out of business.

Date Posted: 4/19/2012 9:10 AM ET
Member Since: 8/18/2005
Posts: 7,977
Back To Top

I'm not sure I completely agree with this opinion piece regarding the lawsuit

IMHO there's an ongoing effort by the publishing companies to try to twist what the DOJ charges are about. They were never about the Agency model of selling books. The DOJ here, and in other countries, don't really care how ebooks are sold. (With the exception of those countries that have protection rules in place over which books can and can't be sold in their countries, and how.)

What the publishers are trying to gloss over is the "Price Fixing" part of the charges. Price Fixing is illegal, they knew it was illegal, but went and did it anyway. There seems to be well documented evidence that the way they converted from the old model to the new included price fixing. The publishers that caved basically said "Oh, our bad. We'll just pay the quick fines and go back to the old way...." Because they didn't want the official charges filed against them and lose, and they apparently didn't see the increase in revenue they thought they'd see when they raised all their prices. They're seeing money trickle in on individual sales, which isn't how they usually get their money, which was in chunks by retailer who bought in bulk. They want their chunk now, not wait for individual sales to trickle in!

So they figure they can afford to back off the Agency Model, since it's not doing what they'd thought it'd do.

And it makes it look like the Agency Model is the problem. It's not. It's the Price Fixing charge they don't want to be stamped with.

Smoke Screen time. Get everyone to talk about the Agency Model, and not the Price Fixing. Makes them look better.

But the wailing now is that Amazon will sell the e-books at below cost in order to shut down other book distributors.

They can't for the long run, but they certainly can put other distributors out of business. Problem is, if it wasn't Amazon doing it, it'd have been Apple or someone else. EVERY business that can squeeze out competition will. I remember reading in some of my genealogy books old articles on how horrible Macy's was when they were first becoming a retail power. They put a ton of Mom and Pop business' out of business. Then, eventually, customers were lured away by someone else. Same old story. Round and round.

Amazon is at it's peak right now because they did something right, (or haven't yet gotten caught at doing something wrong) and the other companies are trying to catch up. Can they be taken down by competition? Sure. But it'll take smart innovation, something the Publishers don't seem to have in their midst. They want it to go back to the old way, where they (who put other, smaller publishers out of business years ago) were top of the pile, and making money, because authors and readers had no where else to go.

They need to quit wailing, and realize 1) who their end customer really is and 2) find a way to make money with the new system and 3) keep their authors happy enough to stay with them, and not leave and go private.

I know many authors are putting up their own web sites, to sell the blacklists of their own books they have the copyright to. If an author's already earned the name, gotten the fame, why not go solo? Take all the risk, make all the decisions, and keep all the money left over from costs. And if an author does want someone to sell his stuff for him, why not go with someone like Smashwords, that offer other services, and are vested in keeping authors happy and on their site?

Authors bailing ship will soon be their biggest problem. Forget Amazon. In a few years The Old Publishers may not have all that much to sell in the first place.

 

 



Last Edited on: 4/19/12 9:11 AM ET - Total times edited: 1
Date Posted: 4/19/2012 3:50 PM ET
Member Since: 5/10/2009
Posts: 826
Back To Top

Problem is, if it wasn't Amazon doing it, it'd have been Apple or someone else. EVERY business that can squeeze out competition will.

I had a very similar conversation with a coworker just a couple of days ago.   Which led to them mocking me for refusing to shop at Wal-Mart but still shopping at Amazon.  I had to admit to being a hypocrite.

They're seeing money trickle in on individual sales, which isn't how they usually get their money, which was in chunks by retailer who bought in bulk. They want their chunk now, not wait for individual sales to trickle in!

You know, I never really thought of it this way.  I wonder if this is going to eventually lead to authors being paid smaller advances and having to rely more on royalty checks.  Without early lump sum profits from bulk purchases, they may not be willing to give as big of a lump sum to authors up front.

I read an editorial last year which said that in the past 30 yrs or so, agents and authors have been wanting increasingly large advances and it said part of the publishing expense is due to needing a lot more sales for royalties to cover the advances, so when books don’t sell well they’ve lost more money.  E-books probably aggravate the issue.

Authors bailing ship will soon be their biggest problem. Forget Amazon. In a few years The Old Publishers may not have all that much to sell in the first place.

I think publishers in general do still play an important role, especially with new authors who don’t yet have a following.  I won’t usually read self-published books from unknown authors.  I just don’t have the inclination to spend all that time trying to sort the gems from the dreck – it’s a monumental task and just gets bigger as time goes by.  But smaller/indie publishers have put out some really fantastic stuff the last few years.  They’re a lot more willing to take chances and publish something unusual or new instead of something trendy.  The great thing about the internet is that the smaller publishers now have a chance again, where they NEVER would have had a chance with physical bookstores.

One of the speculations that I’ve read and that I think seems likely is that we might move to a model where authors start out with small or indie presses (or self-published), then move up to the “Old Publishers” once they’ve gained a following.  Though large advances were one of the major reasons authors would do so, and if those go away, they’d have less reason to leave the small press.



Last Edited on: 4/19/12 3:50 PM ET - Total times edited: 1
Date Posted: 4/19/2012 9:54 PM ET
Member Since: 8/18/2005
Posts: 7,977
Back To Top

One of the speculations that I’ve read and that I think seems likely is that we might move to a model where authors start out with small or indie presses (or self-published), then move up to the “Old Publishers” once they’ve gained a following.

They could. One author (I forget her name) made a ton of money and became famous through self publishing, then just recently signed with a Original Publisher.

(If I remember her name, I'll throw it in. Now it's gonna bug me.)

But the problem with going with one of the original publishing houses is that they want to own the copyright, and have creative control over the story/book for all that advance money. I know on some of the author's lists I hung around in ages ago was the complaint that if a publisher wanted a character changed, you had to change them. If they wanted a different ending, you had to change it. IIRC, one author complained that a pivital male/male sex scene was removed by the publisher. They could take that the main characters were gay, and she could include het sex scenes, but not between the male characters. She didn't have a choice.

I'm not sure a lot of author's will want to sell their creative control for the advance money, or lose control of the copyright. I think both are a lot more valuable now than they used to be, now that authors have other choices for publishing.

[ed. Ah! Amanda Hocking. ]

Self-Published Ebook Author Amanda Hocking Lands 7-Figure Deal

 



Last Edited on: 4/19/12 9:58 PM ET - Total times edited: 2
Date Posted: 4/19/2012 10:11 PM ET
Member Since: 1/8/2007
Posts: 8,139
Back To Top

Cindy, I totally agree with you on the price fixing. It was certainly not OK, and it was definitely illegal. But I thought that the author of the op-ed had some good points regarding competition and that the concerns about going back to the old model (and the undercutting of price by Amazon) is a legitimate concern. Not sure what to do about it, though.

I do think that the trend is toward author's ownership of their material in the long haul. But as with all new technologies, it takes a while for everything to hash out.

I wonder if us consumers will get rebates or gift cards to help compensate us as part of the deal? One can hope, right? :)



Last Edited on: 4/19/12 10:11 PM ET - Total times edited: 1
Date Posted: 4/19/2012 10:28 PM ET
Member Since: 8/18/2005
Posts: 7,977
Back To Top

But I thought that the author of the op-ed had some good points regarding competition and that the concerns about going back to the old model (and the undercutting of price by Amazon) is a legitimate concern. Not sure what to do about it, though.

It's going to be a toughie for them to figure out. They've dragged their feet for so long I don't know what direction would be the best for them to go in. They're going to have to decide who their customers are, and make them happy.

Which will mean two ways of doing things if they don't change back, and yet keep their physical books on the old model as well. (And I've never heard they were going to ever change the model for the physical books.)

I wonder if us consumers will get rebates or gift cards to help compensate us as part of the deal? One can hope, right? :)

Lol. That would be great, 'cause I've spent my share! devil But I imagine lawyers will get the biggest chunk of it, no matter how much they pay in fines.

 

 

Date Posted: 4/20/2012 7:40 AM ET
Member Since: 10/30/2006
Posts: 8,426
Back To Top

Here's the part the publishers never admitted to (but they certainly have figured out)- consumers have different price points that they will buy at depending on where they are. For example- who buys a hardback? Someone who either has no money worries or someone in an airport. There's a reason that airport bookstores mainly sell hards and trades at full price. Past that, you move into Costco, Walmart, etc where the hardcovers are discounted up to 40%, dropping the price to $15 or so. Part of the reason Borders didn't make it is they weren't willing to discount to that level. Which tells me there's a lot of wiggle room in hardcover profit.

Next you have the paperback buyers who will pay 7.99. Nobody ever discounts the paperbacks and the choices are limited to what books are available in paperback and what books the retailers choose to carry at their stores. Shoppers who buy paperbacks at the grocery or Walmart either know their choice is limited to what Publix and Walmart think will sell in their  stores or they don't care.

Next you have your used market, which pretty much tops out at $5 inclusive of shipping- your PBS's, your Amazon's, your Ebay's, your Half's, your garage sales. These readers will only pay a certain level and fully realize that their choices are limited by what's found on the resale market, but there is such a thriving resale market that very few used readers are coming up dry. Since the publishers don't make a dime off these books, they don't even recognize this category, which is very shortsighted of them becasue one thing we've found here on PBS with those of us with ereaders is that we will still pay that $5 for an ebook and then the author and the publisher get a new royalty, where with a physical book they don't.

The publishers don't want to admit there is a market out there for sales below $8. I'm not quite sure who exactly is paying 9.99 for every Kindle book they read. I'd love to know the breakdown of how many are the freebie dreck, how many are below the traditional $8, and how many sold are higher than that.

Date Posted: 4/20/2012 10:04 AM ET
Member Since: 4/7/2008
Posts: 15,690
Back To Top

Lots of interesting points, ladies. :)

The thing with the ebook business is that let's say that Amazon undercuts the competition and shuts them down so they get a monopoly. If they continue to be a company that has good customer service and their prices are those that I can afford, then I really don't care if they are the only ones in the market. I don't owe anybody a living, companies need to find a way to survive.

Now, if Amazon jacks up the prices and start treating people like shit, then I'm sure that will open up opportunities for other companies. The ebook business is not like the airline industry where there's a huge barrier of entry, it's just not that difficult to set up shop as an ebook seller so I really don't see any danger unless Amazon becomes the only publisher in the world and all the authors sign up with them.

Date Posted: 4/20/2012 10:13 AM ET
Member Since: 4/7/2008
Posts: 15,690
Back To Top

Oh and for those of you who read paranormal or urban fantasy or YA, here's an AWESOME self pub book: Angelfall (Penryn & the End of Days, Book 1).

I will definitely be pre-ordering the sequel even if it's $9.99, the book was that good.

Page: