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Thread: Collusion!

  1. #1

    Collusion!

    Have you heard the latest? The Justice Department is considering bringing a lawsuit against Apple and several other retailers for colluding with publishers to keep ebook prices high.

    It all stems from the new pricing model. Publishers used to sell books to retailers and then the retailers set competitive prices. No more - publishers set the prices for ebooks, and retailers take a 30% cut. The deal was first struck with Apple, and then quickly signed by Amazon, B&N, etc. It results in the same price everywhere, no competition, and no ability of the retailer to lower prices. And that's not America. That's not even Canada.

    It's almost certain that the DoJ interest will result in a freer market - and lower prices on ebooks. Soon, retailers will probably have the ability to set their prices on ebooks. Amazon already takes losses on many paper books to drive people to its site. If it had the ability to make its Kindle pass the iPad in popularity, how low do you think they will set ebook prices? I for one, can't wait!

  2. #2
    Book worm werewolfv2's Avatar
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    for all I care they can charge an arm and a leg for e-books, I wouldnt mind a price reduction on actual books though.

  3. #3
    It never entered my mind algernoninc's Avatar
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    as I understand it from the indictment, the main issue here is the clause that say the publisher is forbidden to offer the book at a lower price anywhere else, eliminating competition and artificially inflating the value of th ebook.

  4. #4
    I want to be a princess sic's mom's Avatar
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    I get the idea that publishers want to get as much as possible for their product. Even applaud it. Thats what free enterprise is about. But to legally keep prices high, I sure don't agree with. Competition is the backbone of free enterprise and I think that if the publishers cut the prices of some of their ebooks they might find in the long run they will make more. I would probably buy even more books for my Nook if they were cheaper, and I know there are quite a few people out there that feel the same way. Greed has gotten to be the way of this country and it is a sad thing to see.

  5. #5
    They updated with a new article. The issue of forbidding the publisher from offering a lower price elsewhere is one facet, but another is that the JD claims the publishers and multiple competitors (namely Apple and Amazon) colluded to set book prices. When competitors work together to set high prices for books so they can make more money, it is illegal.

    It was always obvious that a couple of years ago, ebook prices went through the roof and were artificially high. I assumed the publishers were asking for a lot of money for the ebooks from the retailers. Looks like the retailers were in on it. The JD thinks they have a very strong case, and I'm looking forward to much lower ebook prices.

    Publishers claim 90% of their cost is from things other than printing and distributing the books. They claim they couldn't lower ebook prices if they wanted to. Why argue with the - the easiest way is to eliminate the publisher. More and more writers are becoming successful without a publisher by direct selling ebooks. This kind of reminds me of Louis CKs latest show, which he offered for $5 from his website. He made well over $1M, which he said is far more than he would have made selling the show to HBO and having them make a video of it. He simply hired a producer and the camermen himself. Better for everyone (except the middleman).

  6. #6
    I understood that the "price fixing" was in response to Amazon selling ebooks below cost so they could sell more kindles. If that is the case (which it may not be), I think both are wrong.
    Obviously publishers are struggling with the the new technology. They can resist but new tech will happen whether they want it to or not. Ask Kodak.
    I have not tried an e-reader yet. I like books but will at least give a reader a shot sometime.
    Two things that may make them work for me:
    1. Read without reading glasses.
    2. Easier to read in bed than a hard cover book.

  7. #7
    Quote Originally Posted by cgw View Post
    Two things that may make them work for me:
    1. Read without reading glasses.
    2. Easier to read in bed than a hard cover book.
    I have been reading a lot of ebooks from my laptop lately. A huge draw for me is the adjustable font, and also the high contrast -- that pesky vision problem....
    Last edited by PeterWilliam; March 26th, 2012 at 11:16 AM. Reason: missing quote bracket

  8. #8
    Update:

    VICTORY!

    The U.S. accused Apple and five of the nation's largest publishers Wednesday of conspiring to raise e-book prices, in a case that could radically reorder the fast-growing business.

    In a civil antitrust lawsuit, the justice department alleged that CEOs of the publishing companies met regularly in private dining rooms of upscale manhattan restaurants to discuss how to respond to steep discounting of their e-books by amazon.com inc., a practice they disliked. The executives also called and emailed each other to craft a solution to what one of them called "the wretched $9.99 price point," the suit said.

    The five publishers and apple hatched an arrangement that lifted the price of many best-selling e-books to $12.99 or $14.99, according to the suit. The publishers then banded together to impose that model on Amazon, the government alleged.

    "As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles," said attorney general Eric Holder.

    The publishers and apple denied any wrongdoing. Some publishers said the government's action could harm consumers by giving Amazon excessive control of the industry.

    The lawsuit upends an industry already undergoing wrenching change as printed books give way to electronic books that can be transmitted anywhere in seconds. Publishers want to keep their role as gatekeeper and ensure that e-books are profitable.

    Three of the publishers settled with the justice department, agreeing to let Amazon and other retailers resume discounting of e-books. settlement of a separate suit filed by 16 states and U.S. Territories could lead to tens of millions of dollars in restitution to consumers who bought e-books at the higher prices.
    Last edited by phil_geo; April 12th, 2012 at 08:41 PM.

  9. #9
    "Dime Store Rock"
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    Quote Originally Posted by phil_geo View Post
    Have you heard the latest? The Justice Department is considering bringing a lawsuit against Apple and several other retailers for colluding with publishers to keep ebook prices high.

    It all stems from the new pricing model. Publishers used to sell books to retailers and then the retailers set competitive prices. No more - publishers set the prices for ebooks, and retailers take a 30% cut. The deal was first struck with Apple, and then quickly signed by Amazon, B&N, etc. It results in the same price everywhere, no competition, and no ability of the retailer to lower prices. And that's not America. That's not even Canada.

    It's almost certain that the DoJ interest will result in a freer market - and lower prices on ebooks. Soon, retailers will probably have the ability to set their prices on ebooks. Amazon already takes losses on many paper books to drive people to its site. If it had the ability to make its Kindle pass the iPad in popularity, how low do you think they will set ebook prices? I for one, can't wait!
    I'd prefer a free market solution over more government regulation.

  10. #10
    Mystic and Misfit Gkarlives's Avatar
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    Quote Originally Posted by Asimovking View Post
    I'd prefer a free market solution over more government regulation.
    Unfortunately, the price fixing was the free market solution. The regulation is the government's attempt to balance the equation again.

  11. #11
    "Dime Store Rock"
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    Quote Originally Posted by Gkarlives View Post
    Unfortunately, the pric e fixing was the free market solution. The regulation is the government's attempt to balance the equation again.


    The free market response to price fixing would be if people stopped buying the books because the prices are too high. The response would then be a lowering of the prices. Problem solved.

  12. #12
    bingley bingley beep kissmequick's Avatar
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    We all realise that the agency model usually meant the publisher making less and the third party resellers making more. And that Amazon forcing prices down so far was part of why they changed (so that third party, Amazon or no, got a set amount). Making people NOT Amazon (who were selling ebooks at less than cost to drive sales for the kindle) more competitive, thus reducing the monopolization by Amazon?

    If anyone was going to collude to price fix, surely they'd do so to, I don't know, make more money per book, not less?

  13. #13
    Mystic and Misfit Gkarlives's Avatar
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    Quote Originally Posted by Asimovking View Post


    The free market response to price fixing would be if people stopped buying the books because the prices are too high. The response would then be a lowering of the prices. Problem solved.
    Yes, but that is in a perfect world where there are no backroom deals and people always know what these guys are doing. They were caught this time, but given time and the likely small slap on the wrist they will get, they will try something else. This is the way our free market actually works, Enron, Tyco, etc.

  14. #14
    Gloriam Imperator kged's Avatar
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    E-books are The Devil, and I will have nothing to do with them. Books are paper - real wrinkly, rustly, mildewy, smelly, yellowing, broken spines, falling open at your favourite parts paper. When you start a book you have a big chunk of pages in your right hand and just a few in your left; you can judge where you are in a story by how that balance changes. You can re-read a book and remember the feel of it in your hand, the weight of THAT book, the curl of its page corners, that weird splodge on page 296. When you read and love a book, you can have the excitement/disappointment of going into a bookshop a few years later and seeing it has got a new cover. E-books, however, are sterile joyless ugly lifeless horrible horrible horrible things. I'll never never switch to using one.

    Aaaaaand relax *breathes*.

  15. #15
    MJ Dusseault Spears&Buckler's Avatar
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    Quote Originally Posted by kged View Post
    E-books are The Devil, and I will have nothing to do with them. Books are paper - real wrinkly, rustly, mildewy, smelly, yellowing, broken spines, falling open at your favourite parts paper. When you start a book you have a big chunk of pages in your right hand and just a few in your left; you can judge where you are in a story by how that balance changes. You can re-read a book and remember the feel of it in your hand, the weight of THAT book, the curl of its page corners, that weird splodge on page 296. When you read and love a book, you can have the excitement/disappointment of going into a bookshop a few years later and seeing it has got a new cover. E-books, however, are sterile joyless ugly lifeless horrible horrible horrible things. I'll never never switch to using one.

    Aaaaaand relax *breathes*.
    Well said! E-books are not for me either.

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