PSY
Banned
http://www.pcmag.com/article2/0,2817,2409390,00.asp
http://www.thestar.com/business/article/1159613--apple-sued-for-e-book-price-fixing
Consumers in Canada and around the world could soon be paying less for e-books after the U.S. government sued Apple and several major publishing firms over an alleged price-fixing conspiracy.
The suit, filed in federal court in New York, says Apple colluded with publishers including HarperCollins, Simon & Schuster and MacMillan to fix the price of e-books. The government said it had settled with publishers Hachette, HarperCollins and Simon & Schuster, but was going ahead with a suit against MacMillan and Penguin.
The lawsuit said the alleged conspiracy came as Apple was preparing to launch the iPad two years ago. It alleged the conspiracy called for Apple to be guaranteed a 30 per cent commission on each e-book it sold, and kept retailers from selling e-books more cheaply than Apple.
“The publisher defendants teamed up with defendant Apple, which shared the same goal of restraining retail price competition in the sale of e-books,” the lawsuit said.
Protecting readers against price-gouging was the ultimate goal of the suit, said U.S. Attorney General Eric Holder.
“As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles,” said Holder.
“When companies get together and conspire to enter into agreements that eliminate price competition, it crosses the line,” said Sharis A. Pozen, the acting assistant Attorney General.
Apple declined to comment on the suit.
Amazon spokesperson Andrew Herdener said the settlement will mean cheaper prices for e-books.
“This is a big win for Kindle owners, and we look forward to being allowed to lower prices on more Kindle books,” said Herdener in an emailed statement.
While the suit was filed in the U.S., Canadian consumers, publishers and retailers will also be affected by the outcome, said Robert Hayashi, president and CEO of ebound Canada, the digital arm of the Association of Canadian Publishers.
“What happens there will spill across the border,” said Hayashi, who said it’s hard to predict how much prices could fall. In Canada, the market-leading e-book reader is Kobo, says Hayashi.
Canada’s Competition Bureau declined to say if it was probing either Apple or the publishers.
Veteran U.S. antitrust lawyer William Markham said the U.S. government seems to have a solid case against both Apple and the publishers, noting it would have been a tough case to defend against even had there only been one publisher involved.
The publishing firms, says Markham, were allegedly trying to keep the price of e-books at $15, while online retailing giant Amazon had wanted to sell them for under $10.
“They all threatened to shut off access. … That to me looks like price-fixing,” Markham alleged.
While consumers often complain that e-books should be dramatically cheaper, that’s based on a false assumption, says Hayashi.
“People will say ‘why are they so expensive?’ There’s a different kind of layout, a different skill-set. People don’t understand that. There are still significant costs, even if there’s no paper,” said Hayashi.
For a company with $100 billion in cash on hand, any penalties Apple could eventually pay would be affordable, says tech industry analyst Kevin Dede of Auriga USA.
The dent to its reputation might be tougher to repair, however.
“Some may begin to look at the company much the way that people view Microsoft or perhaps more Facebook now: The Evil Empire. That could well be Tim Cook’s biggest challenge. . . . Dancing around book pricing and collusion charges is not great image building stuff,” said Dede.
In a letter to MacMillan’s authors, CEO John Sargent angrily denied the company had colluded.
“It’s hard to settle a lawsuit when you know you have done no wrong.”
Sargent said the filing of the lawsuit came after months of negotiations with the government.
“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,” he said.
In an agency model, books are sold with prices by the publisher, with the retailer acting as agent and collecting a commission. In the traditional wholesale model, publishers sell books to retailers at a discount off the cover price, with the retailer marking it up as they see fit.
Meanwhile, Apple and four publishers have offered to settle an antitrust investigation with European Union regulators, the European Commission said in an emailed statement.
http://www.thestar.com/business/article/1159613--apple-sued-for-e-book-price-fixing
Consumers in Canada and around the world could soon be paying less for e-books after the U.S. government sued Apple and several major publishing firms over an alleged price-fixing conspiracy.
The suit, filed in federal court in New York, says Apple colluded with publishers including HarperCollins, Simon & Schuster and MacMillan to fix the price of e-books. The government said it had settled with publishers Hachette, HarperCollins and Simon & Schuster, but was going ahead with a suit against MacMillan and Penguin.
The lawsuit said the alleged conspiracy came as Apple was preparing to launch the iPad two years ago. It alleged the conspiracy called for Apple to be guaranteed a 30 per cent commission on each e-book it sold, and kept retailers from selling e-books more cheaply than Apple.
“The publisher defendants teamed up with defendant Apple, which shared the same goal of restraining retail price competition in the sale of e-books,” the lawsuit said.
Protecting readers against price-gouging was the ultimate goal of the suit, said U.S. Attorney General Eric Holder.
“As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles,” said Holder.
“When companies get together and conspire to enter into agreements that eliminate price competition, it crosses the line,” said Sharis A. Pozen, the acting assistant Attorney General.
Apple declined to comment on the suit.
Amazon spokesperson Andrew Herdener said the settlement will mean cheaper prices for e-books.
“This is a big win for Kindle owners, and we look forward to being allowed to lower prices on more Kindle books,” said Herdener in an emailed statement.
While the suit was filed in the U.S., Canadian consumers, publishers and retailers will also be affected by the outcome, said Robert Hayashi, president and CEO of ebound Canada, the digital arm of the Association of Canadian Publishers.
“What happens there will spill across the border,” said Hayashi, who said it’s hard to predict how much prices could fall. In Canada, the market-leading e-book reader is Kobo, says Hayashi.
Canada’s Competition Bureau declined to say if it was probing either Apple or the publishers.
Veteran U.S. antitrust lawyer William Markham said the U.S. government seems to have a solid case against both Apple and the publishers, noting it would have been a tough case to defend against even had there only been one publisher involved.
The publishing firms, says Markham, were allegedly trying to keep the price of e-books at $15, while online retailing giant Amazon had wanted to sell them for under $10.
“They all threatened to shut off access. … That to me looks like price-fixing,” Markham alleged.
While consumers often complain that e-books should be dramatically cheaper, that’s based on a false assumption, says Hayashi.
“People will say ‘why are they so expensive?’ There’s a different kind of layout, a different skill-set. People don’t understand that. There are still significant costs, even if there’s no paper,” said Hayashi.
For a company with $100 billion in cash on hand, any penalties Apple could eventually pay would be affordable, says tech industry analyst Kevin Dede of Auriga USA.
The dent to its reputation might be tougher to repair, however.
“Some may begin to look at the company much the way that people view Microsoft or perhaps more Facebook now: The Evil Empire. That could well be Tim Cook’s biggest challenge. . . . Dancing around book pricing and collusion charges is not great image building stuff,” said Dede.
In a letter to MacMillan’s authors, CEO John Sargent angrily denied the company had colluded.
“It’s hard to settle a lawsuit when you know you have done no wrong.”
Sargent said the filing of the lawsuit came after months of negotiations with the government.
“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,” he said.
In an agency model, books are sold with prices by the publisher, with the retailer acting as agent and collecting a commission. In the traditional wholesale model, publishers sell books to retailers at a discount off the cover price, with the retailer marking it up as they see fit.
Meanwhile, Apple and four publishers have offered to settle an antitrust investigation with European Union regulators, the European Commission said in an emailed statement.
