How anti-Apple, pro-Amazon manipulations have resulted in less competition, higher ebook prices

How anti-Apple, pro-Amazon manipulations may have resulted in less competition and higher prices for consumers

Sometimes when there's smoke, there's just smoke. And sometimes there are Kindles full of fire. Following the Wall Street Journal's scathing opinion piece last month, another media outlet is now asking questions about the conduct of the Department of Justice, the judge, and the external monitor. Kathleen Sharp goes so far as to call Amazon's crusade "bogus" in her headline on Slate:

Which gets to the heart of this bizarre case: The numbers show that, far from hurting the market, the publishers' and Apple's agency model actually helped it. They allowed Barnes & Noble to gain a foothold in the e-book market, provided relief to the independent brick-and-mortar stores, and gave consumers lower rather than higher prices.

But none of this will surface in Monday's hearing. Instead, the court will weigh the hurt feelings and escalating tensions in this convoluted case.

Whatever Apple's behavior, and the interpretation of it, and the law, the entire proceedings seem so ludicrous now that a re-visitation seems not only warranted, but necessary to serve the public good. I buy from both Amazon and Apple, and I want to retain both options, and more.

Have something to say about this story? Leave a comment! Need help with something else? Ask in our forums!

Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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How anti-Apple, pro-Amazon manipulations have resulted in less competition, higher ebook prices


You disappoint me falling for this hatchet piece. Its center point, as you have repeated here, is that the agency model Apple and 5 publishers agreed upon somehow has given consumers lower prices. However, even a cursory view of the data shows that is not true. While the overall prices for ebooks have gone down as the Salon article indicates, the prices of ebooks *FROM THE FIVE PUBLISHERS APPLE COLLUDED WENT UP* With easy-to-follow charts:

If anything, an actual reading of the evidence is *more* damning, not less, because the apparent effect of agency pricing was to raise prices for consumers even in the face of an overall market trend towards lower prices.

The article's other assertions fare little better.

Yes, and when I read totally wrong things like "During pretrial hearings in the government’s case, it seemed Judge Cote had already made up her mind about Apple’s guilt — even before hearing the evidence." it is clear what the article is.

And the claim that ebook prices went down is false, the price of ebooks from the accused publishers went UP

Perhaps the ones not reading evidence and following the trial are the ones making those wrong claims.

when you wrote the article. If I hadnt read what Dev from tipB posted and his article, I would have believed what you posted on imore. Yes I realize you simply quoted another author, but why not let the facts speak for themselves instead of only listing someones opinion on the matter? This is why I find it so hard to read things on imore. Its the only Mobile Nations site that shows so much bias. Everyone else keeps it real for the most part

Do the "Apple fanboy test", substitute "Apple" for "Microsoft" and check if your opinion remains the same.

It's a link post, not an editorial. Slate's making the assertion. I've said before and I'll say again, I'm less concerned with a few dollars in price difference than I am the sustainability of the industry. Neither Apple nor Amazon having too much control over it serves my interests, yet right now only Apple's business seems impacted and that's not good for any of us.

The court also seems to lack credibility at this point, which isn't good for the proceedings in general.

Comments like yours, which I enjoy as always, are part of the discussion and the benefit of linking to pieces like Slate's.

You're claiming a US federal court has no credibility and you prefer having Apple having complete control over the pricing of all eBooks?

Yup -- and Apple SHOULD have control over the pricing of products in THEIR market. It's called Capitalism and free-market. If you don't like what they're doing, go to Amazon, or Barnes and Noble, etc. It's not the government's place to put pricing caps on consumer products, or ANY product. The market works itself out when WE vote with our wallets. So yeah -- the US federal court system has very little credibility these past several years.

The ironic thing is that you are advocating a closed market where one corporation controls everything. Why do you want Apple to control the prices of all eBooks for all vendors? Are there any other retail sectors you want a single corporation to control the pricing of?

I absolutely agree with you, as long as publishers do not sign MFN clauses, which raise prices outside Apples market. The problem here is Apple was trying to set the minimum price everywhere, and not just on their store.

"and Apple SHOULD have control over the pricing of products in THEIR market."

You seem to have forgotten the entire premise of the suit -- that is exactly what Amazon was arguing for -- the ability to set prices in their own store. What Apple did was the opposite of that -- illegally induce 5 competing publishers to set pricing for *all* markets identically, taking away the freedom from any reseller to set prices in their own store.

Or is that facet of capitalism only acceptable for Apple, and not its competitors?

Perhaps my level of snark was unwarranted, but it is a bit disappointing to see multiple editorials on imore railing against some mass of anti-Apple press -- even with separate recent calls for "more civility" and less "cult" memes towards Apple from the "irrelevant" tech press, and then see the assertions of a tremendously anti-Amazon, pro-Apple piece taken as fact, without any investigation or comment on the underlying data.

Look at your own headline -- there is no "Salon alleges... or Salon asserts...", not even a "may have" qualifier. It presents, as a fact, "How anti-Apple, pro-Amazon manipulations have resulted in less competition, higher ebook prices" After a quote and no analysis (it is, after all, a link post), the stated conclusion that a revisit is needed "for the public good" forces the reader to conclude that you accept and approve of the assertions in the article.

As a thought exercise, pretend bgr wrote the imore article, but swapped the companies in the headline (How anti-Amazon, pro-Apple manipulations have resulted in less competition, higher ebook prices), keeping the level of analysis in the article constant. imore would justifiably rail against this as an example of the tech press publishing unthinkingly critical bits against Apple, if not post a new editorial about how such articles will no longer be linked to, and need to be ignored. The difference in approach is striking.

Who knows where this will lead but I will say that it is odd that the Slate author is basically saying Apple attorneys are incompetent as she claims the evidence is overwhelming in Apples favor (so compelling that Apple brought none of it up). This lawsuit is peanuts anyway as Apples biggest problem is the 32 state lawsuits and the 6 class action lawsuits stemming from their corruption.

Read the transcripts of the trial. Apple (especially Cue) colluded with the publishers to screw over you and me and everyone else. They got caught, the publishers cut a deal and apple got convicted.

"How anti-Apple, pro-Amazon manipulations have resulted in less competition, higher ebook prices"

Do you have any number to back this or it is just a bait article where the author is just making wrong claims (we will give you the benefit of doubt and won't think that you already know that you're posting wrong claims)?

Hey Rene many of these guys are just shooting from the hip. No one wants anyone to have unfair monopoly over the market whether Apple or Amazon. And that's what I hear you saying. I feel the court was bias myself.

Sent from the iMore App

These are usually the type of articles railed against here when they are considered anti-Apple.

Given that prices went sharply UP when Apple joined the eBook gang, this article makes no sense.

Competition is supposed to lower prices, not raise them.

Competition only lowers prices if consumers are not buying something. As long as consumers buy, the prices will remain or rise until the threshold is reached in which the consumer no longer will pay. THAT is how competition works.

It is not a dogma that competition always lowers prices. In true Darwinian economics prices will rise and fall, often cyclically, as a myriad of variables change and fluctuate over time, and ultimately, things will be sold for what we're willing to pay, and we [consumers] often don't know the answer to that question from one generation to the next. I've been buying ebooks since Palm Pilot days, and I also subscribe to digitally delivered magazines,only - and I'm sorry but all the talk of big price increases and sharp rises in costs to consumers just isn't there. Ebooks cost more today than they did five and ten years ago, but given the value I and millions of other consumers feel we get with digital reading material, and all of the unique advantages that go along with it, I'm happy to pay what we actually pay, less is always better for me, but I read more than ever and pay less, on average, than back in my print days. It's just a fact. Apple may have done a bad thing, and if so, it needs to be ferreted out and delt with, but from a consumer pov, please don't assume we all concur that we're somehow being cheated, 'cause for a lot of us, it just isn't so.

I have no idea what's transpired behind closed doors, so how I could I possibly make a stand for one side or the other? This is what I consider...
Virtually every company we enjoy products from has a competitor. It's the natural extension of, "Say, that's a good idea and I want to make money at it too!"

Walmart vs Target vs etc. ; Ford vs Chevy vs etc. ; Fender vs Gibson vs etc. ; McDonalds vs Burger King vs etc. ; Yours vs Mine ...

At this point, I feel I'm too desensitized to really care anymore. I've always looked at this from the perspective that the cost of producing digital books would be less costly than physical books and often that doesn't seem to be the case as providers seek to justify making the same cut as they used to - especially in the educational sectors. But hey, you can buy comic books "for a dollar" if you time it right.

Have fun! [with fist & finger high in the sky]

"I have no idea what's transpired behind closed doors, so how I could I possibly make a stand for one side or the other?" It's all been well documented.

Becjr, the issue is the intentional collusion on ebook prices. I admit that I usually use amazon, though sometimes I will use iBooks. With the books that I buy, Amazon is usually cheaper. Also, with books by certain authors, I will purchase the hardback and the eBook. The ebook to read and the hardback to put in my library.

While I agree with Apple being punished for this (as should be the publishers), I don't agree with the terms of their punishment. It is a little too vague on the guidelines and leaves too much open to the interpretation of the watchdog set to oversee Apple's actions.

"intentional collusion on ebook prices"
Yes. I know. I even remember all the hubbub about Steve Job's private remarks. This is part-in-parcel with the comments I made about pricing issues. At one point pricing of ebooks were supposed to be more enticing to encourage electronic consumption over paper for a "greener" planet, ease of access, portability, etc. [blah, blah] and yet that really doesn't seem to be that case. Similar, to me, in comparison to the electronic distribution of music and movies - although, often times I can stop by Target/Walmart and grab a hard copy of a movie for cheaper than what what iTunes offers.

While I agree with Apple being punished for this (as should be the publishers), I don't agree with the terms of their punishment. It is a little too vague on the guidelines and leaves too much open to the interpretation of the watchdog set to oversee Apple's actions."

I agree with you. The whole thing reeks not of justice for a wrong doing but more like a lynching of a major player to set an example for others. [Meh]

There is no justification for Apple colluding and attempting to manipulate prices. That prices go up doesn't justify illegal actions.

I recently purchased a programming book in the iBooks Store for $31. It was $18 on the Kindle Store.

... and ...?

Isn't that competition?

Also - I think a lot of the vortex here is really a front for moving toward free. That's become a considerable short-coming of doing business on the internet. The veiled threat that says, if I don't get it cheap or free, then I'll just steal it. It's cool that we have access to so many things, instantly , that we didn't before, but not everything can be free or even cheap just because it's digitized. Capitalism has taught us a lot, both good and bad, and one of the good things is that, we get what we pay for.