Apple On EBook Pricing Collusion Charge: Amazon's The Real Bad Guy

(Reuters) - Apple has rejected the U.S. Justice Department's allegations that it colluded with publishers over electronic book pricing, calling the charges "simply not true", the Wall Street Journal reported.

"The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry," Apple spokeswoman Natalie Kerris told the Journal.

The U.S. government had sued Apple and five publishers, saying they conspired to fix the prices of electronic books, and reached a settlement with three of the publishers that could lead to cheaper e-books for consumers.

Kerris defended the current pricing structure as parallel to Apple's mobile software store.

"Just as we have allowed developers to set prices on the App Store, publishers set prices on the iBookstore," she told the newspaper.

Apple could not immediately be reached for comment.

(Reporting by Sakthi Prasad; Editing by Ron Popeski)

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Comments

[Magda Allani]

04:11 AM on 04/21/2012

The reader in me is always happy to find a cut-price book. The author in me is not so sure however. The more the value of books is lowered, the more publishers are obliged to concentrate on mass-market products and to take material about celebrities or that has a TV tie-in. They are culling authors who have more modest sales figures and are less willing to nurture new talent. In the long run, this significantly lowers the quality of published material and this in turn will impact on the quality of contemporary material available to readers. As ever, the middle road on pricing is always better!

[Max Sevilla]

03:52 PM on 04/14/2012

Google hiring lobbyists to get back at Apple

[island cynic]

05:32 AM on 04/14/2012

I like Apple products but hate their business practises. Sharks are not my favorite animal.
Don;t force me to other products, just get your integrity in order.

[TriKyJoKeZ]

05:25 AM on 04/14/2012

Google hiring lobbyists to get back at Apple

[Max Sevilla]

02:16 AM on 04/14/2012

Apple is jealous because Amazon is more successful as a book seller and iBooks sucks.

[Sanders McGrillin]

08:08 PM on 04/13/2012

Apple is the evil empire

[Ricardo Nest]

04:56 PM on 04/13/2012

Greed is good? Yes? Maybe they should also start focusing on innovation and bulking up their patent portfolios. http://bit.ly/wbPaeh

[BlueDog1]

03:13 PM on 04/13/2012

Apple bites back, say what.

They make telephones gang that's it, no beam up Scotty stuff here.

My last review of the apple boat anchor called a phone is it don't beam me up.

These cowboys are starting to act like AT&T did before MCI and Judge Green busted there chops.

[Charlie Feather]

03:13 PM on 04/13/2012

Why the hell is the government even sticking its nose into this? What business is it of theirs? If people don’t like the price of ebooks, they don’t have to buy them.

I wish the government would stop trying to “protect” us. Just give me a gun and I’ll do it myself!

[Jeffery Cuneo]

03:21 PM on 04/13/2012

They protect against such practices because if they turned a blind eye, nothing would stop companies from getting together to jointly increase prices of everything, from milk and bread, to gasoline and wiper blades.

Your solution to "protect" yourself with your gun is idiotic. Are you going to see the price of bread rise 3 bucks a loaf, load up your gun and start taking out the CEO of Wonderbread? Or perhaps you'll simply take your gun to the grocery store and tell the cashier you're only paying 2 bucks for the loaf, not the five they're asking... or else! Really? I mean... really? How stupid do you have to be to against policies like this when it is FOR YOUR BENEFIT. Please, explain!

[Charlie Feather]

09:01 PM on 04/13/2012

If government wasn’t into crony capitalism and the protection of its capital and labor markets, price fixing would be impossible. There will always be someone willing to sell or work for less or produce a better product if there wasn’t protection by the government of crony interests.

The second part was partially intended as humor, but you couldn’t know this because you don’t know me.

Politicians are very shortsighted looking only to the next election. So, the “benefits” might be there in the short term, but the long term unintended consequences will prove not beneficial at all.

Let Apple do what it wants, and let competitors into the market to under-price them, and ebooks will become affordable to everyone.

[Cael]

03:41 PM on 04/13/2012

It has everything to do with the government. You really don't know what you are talking about.

Do you like the cost of gas? You know why the cost of gas is so high, because the gas companies do exactly what the publishers and Apple did. Gas companies get away with it though.

[Charlie Feather]

08:47 PM on 04/13/2012

The government takes in more money in taxes on a gallon of gasoline than the oil companies make in profits. It’s to the government’s advantage if prices are high, because that translates generally into more tax revenue for them until demand starts to wane when prices get too high. Then there is less tax revenue as sales go down. See the Laffer curve on this.

Also, the government keeping federal lands and waters off-limits to drilling, the veto of the Keystone pipeline, and other bad policies have much to do with high gasoline prices. If the government were to announce approval of the Keystone pipeline and drilling on federal lands, prices would come down overnight! Literally, overnight! See futures market on this.

All the companies and the government are in bed together. Why do people keep thinking that the government is the good guy in any of these stories? The government is a special interest every bit as much as industry, finance, labor unions and all the rest.

[mjredder]

03:03 PM on 04/13/2012

Apple's business model is built upon the adage "A fool and his money are soon parted."

[hanksully1]

02:31 PM on 04/13/2012

Settlement hell! Criminal charges should be brought against these law breakers. They fixed pricing, and they should do time - not some slap of a couple million dollars. They broke the law, and they should be punished for doing so.

[DRaymond]

02:05 PM on 04/13/2012

Bad idea.  It is a really bad idea to mock the DOJ.

I guess to Apple not having to compete with Amazon based on price was 'fostering innovation and competition'.

That is what this is really all about.   When was the last time Apple was in a position of having to compete with anybody else for the identical product based simply on cost?  The answer is never.  They even use various practices to insure that for example the prices at Best Buy for their products are exactly the same as at an Apple Store.

Apple knew that having to compete price-to-price with Amazon for the same e-book was not only a game they were unequipped to win but one that they most likely found repugnant to their self-image.

Also it is a very bad idea to compare your e-book deal with your app developer deal because it only draws attention to how anti-competitive the app deal is.  Can a competing company decide to offer an app store that gives developers a better deal by giving them a bigger share of the pie or offer consumers a better deal by giving them a lower price?  Sounds anti-competitive to me, and might very well to the DOJ as well when Apple tries to make it part of their defense.

In the Paramount Case a standard was set that a company could not exercise control over both the venue of entertainment (theaters) and the production of content (studios).  And in the Paramount Case the Studios did not own the theaters but simply had them locked into a contract.

[Cael]

03:43 PM on 04/13/2012

Well that is Apples way of doing business, if they can't beat them, find a way to screw or sue them.

[JohnTheMac]

09:25 AM on 04/14/2012

" Can a competing company decide to offer an app store that gives developers a better deal by giving them a bigger share of the pie or offer consumers a better deal by giving them a lower price? "

To enter into the App Store, you sign a developers agreement. Part of that agreement is to only sell in their App store. It's not much different when a musician enters into a recording contract. They can't go and sell their music directly on EBay or something like that, after they're under contract, no matter how anti-competitive that might seem to you.

[DRaymond]

07:11 PM on 04/14/2012

I wish people would think through their analogies more.   If a musician does not like the terms being offered by a recording company they can seek other recording companies, they can decide to be an independent artist.  They can decide to start their own recording company.  They have choices.

If an Apple app developer does not like the terms being offered by apple their only choice is not to be an Apple app developer.  They can't distribute with a competing app store or start their own app store.  Their only choice is to sell to jailbroken phones for which Apple enacts a significant penalty to the user.

Merely saying 'they are under contract' means nothing if the contract itself is anti-competitive and particularly if only one side of the contract has any real choice.

[RevSpaminator]

01:23 PM on 04/13/2012

So Apple's response is to say "no we didn't." Big surprise. They will probably try to redefine what "price fixing" means as part of the process.

[NHBill]

01:55 PM on 04/13/2012

Since they don't set the pricing they will probably win the suit.
The publishers on the other hand, the people who actually set the prices, will lose.
Some of them have already settled.

[clearthinker16]

02:52 PM on 04/13/2012

you are right and Apple has the money and lawyers to make fools out of the DOJ. When has the DOJ gone after the auto industry for setting prices? There are much worse abuses for the DOJ to look at, they should start with Amazon

[Donald N Plummer]

03:45 PM on 04/13/2012

You might want to go back and read the Emails from Mr. Jobs to the Publishers where he states "You can set the prices as long as they are below $12.95". Maybe in your neck of the woods that isn't setting the price but around here telling someone what their maximum price can be is pretty much called "setting the price".

[michaelmarian]

07:09 PM on 04/13/2012

They probably have an app for that. Pricefixer app. Especially designed for book publishers. I'm just glad they got busted. Job's passes and all hell breaks lose.

[edenooch]

01:06 PM on 04/13/2012

more bs from the dirt bags at apple

[flackjacket1]

12:58 PM on 04/13/2012

Apple could have let the publishers set the price for items sold thru Apple. No problem there. They could have requested the "Agency Model" for themselves. Where they crossed the line, though, is insisting that publishers must set the same retail price for other booksellers as well. AND getting the five publishers to agree to it and make the change at the exact same time.