U.S. Department of Justice Also Conducting e-Book Antitrust Investigation

I'm very curious to see what the US and EU investigations lead to, but it's hard to argue against the data that, with Apple's entry into the market, many eBooks that cost $9.99 now cost $11.99-12.99 and relatively few are offered at prices substantially lower than the $9.99 to offset. Likewise, before Apple revised it's pricing model for digital music, it all cost $0.99 on iTunes and often $0.89 on Amazon, and now most of the music costs $1.29. In neither case is it clear that the move caused broader adoption of the medium by publishers.

I'm not saying I'm against the agency model, and it has all kinds of advantages in leveling the playing field for smaller publishers and independents, but the net impact (I was buying both eBooks and downloaded music before this pricing model) is that stuff costs more now than it used to.

Then again, isn't everything more expensive these days? ;)

I'm not saying you are right or wrong, just that I remember when a cup of joe was a nickle and you could go to the moving picture show for ten cents. :D

It is written right in the Jobs book on what he did.

Too bad it is probably legal but I think it stinks.

Amazon had been pricing books to what people expected e-books to cost.

In comes Jobs and tells the publishers, we will let you sell at whatever price you want but if someone sells it cheaper, we can drop the price.

This let's the publisher tell Amazon, if you drop the price, we won't let you sell our books.

If this would have happened with music, we would be paying $4-$5 per song.

For people that have no problem with what Apple has done to e-book pricing...
Ever notice how the price of the major e-books don't fluctuate?
Hardcover versions vary wildly (up to 40% off) during the first weeks/months of release but the e-book price stays exactly the same on both iBooks and Amazon.
Isn't there something wrong with that?
Is that a free market system?

Because of Apple, the publishers get to say, pay what we want or you can't sell our product.

Lucky for me, there are easy ways to circumvent their "practices".

I foresee a similar outcome as with the Microsoft antitrust case. Both sides of the Atlantic will find the defendants guilty. In Europe the fines will be steep and the terms severe. In America the fines will be relatively minor and the terms will allow them to be paid in something other than actual money. Shortly thereafter America's antitrust regulations will face another round of rollbacks to help ensure this sort of thing never happens again.

Sounds good to me...

I'm very curious to see what the US and EU investigations lead to, but it's hard to argue against the data that, with Apple's entry into the market, many eBooks that cost $9.99 now cost $11.99-12.99 and relatively few are offered at prices substantially lower than the $9.99 to offset. Likewise, before Apple revised it's pricing model for digital music, it all cost $0.99 on iTunes and often $0.89 on Amazon, and now most of the music costs $1.29. In neither case is it clear that the move caused broader adoption of the medium by publishers.

I'm not saying I'm against the agency model, and it has all kinds of advantages in leveling the playing field for smaller publishers and independents, but the net impact (I was buying both eBooks and downloaded music before this pricing model) is that stuff costs more now than it used to.

What am I missing here? The publisher sets the price...

This is no different than apps. What is anticompetitive? The competition for the publishers is other books, the competition for Apple is how much of a chunk will Amazon say they will take of the price. There is true competition and the control for pricing is further up the value chain.

Sounds good to me...

The problem comes from the whole system favoring big businesses rather than small startups. The big corporations enjoy way more tax cuts, have lower tax rates and generally more bargaining power.

If the system is composed of more, smaller companies, publication houses in this case, I don't see how the agency model will be a problem at all. Much like what is happening now in the app space.

Just like with many industries, technology will allow the value chain to be decreased. That is, bring more power back to the author and limit and reduce costs for each step along the way to the ultimate customer. Editing is still needed, promotion as well, but "publishing" is losing value.

I agree, the agency model pushes more pressure back on the middle man and not on the consumer, who still has plenty of power to choose. Choose a reader type, choose the store to buy from, choose whether to buy a particular book...

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I'm very curious to see what the US and EU investigations lead to, but it's hard to argue against the data that, with Apple's entry into the market, many eBooks that cost $9.99 now cost $11.99-12.99 and relatively few are offered at prices substantially lower than the $9.99 to offset. Likewise, before Apple revised it's pricing model for digital music, it all cost $0.99 on iTunes and often $0.89 on Amazon, and now most of the music costs $1.29. In neither case is it clear that the move caused broader adoption of the medium by publishers.

I'm not saying I'm against the agency model, and it has all kinds of advantages in leveling the playing field for smaller publishers and independents, but the net impact (I was buying both eBooks and downloaded music before this pricing model) is that stuff costs more now than it used to.

The pricing of books is not on Amazon or Apple. That is on the publisher. Same with music, the 1.29 songs are the "popular ones" that the labels want to charge more for. If you shop around, you can find songs that are more or less on iTunes vs Amazon. If the publisher or record label wants to charge more at one store vs another, that is up to them (unless they have a contract stating otherwise).

Can someone explain the alternative? If publishers don't set the price, then that means the retailer, Apple in the case of iBooks, sets the price? How is that better? And why would Apple want to maintain staff that makes pricing decisions on books? They just want a simple cut.

In an online world, it seems like content creators should set the price, not the digital distributor. And if authors still use publishers instead of selling their content directly, then it's those publishers who establish the content price. It just makes sense.

The only thing even worth investigating is whether or not authors can sell their wares directly via iBooks without going through a publisher. Can they? Cause if not, then that might not be fair (why give publishers a cut; what do they really provide to an author in a digital world?).

I'm very curious to see what the US and EU investigations lead to, but it's hard to argue against the data that, with Apple's entry into the market, many eBooks that cost $9.99 now cost $11.99-12.99 and relatively few are offered at prices substantially lower than the $9.99 to offset. Likewise, before Apple revised it's pricing model for digital music, it all cost $0.99 on iTunes and often $0.89 on Amazon, and now most of the music costs $1.29. In neither case is it clear that the move caused broader adoption of the medium by publishers.

I'm not saying I'm against the agency model, and it has all kinds of advantages in leveling the playing field for smaller publishers and independents, but the net impact (I was buying both eBooks and downloaded music before this pricing model) is that stuff costs more now than it used to.

From what it sounds like it is not so much Apple and Amazon are being investigated for wrong doing but more Apple and Amazon are a location to gather a lot of information and it might lead to the publishers being nailed.

It seems people are thinking investigation means are Apple is in trouble and down rate it. They do not understand investigation could be nothing more than info gathering a bigger fish.
Hell it would nail some of the crap we see in college text books.

Hell it would nail some of the crap we see in college text books.

Yeah, I don't have any interest in Apple or Amazon or anyone else being nailed -- just in transparency and fairness in pricing.

My observation is just that, irrespective of the underlying logic of the price moves, Apple's moves in pricing for music and more particularly books led to an industry-wide increase in retail price of these goods. That parallel doesn't clearly exist in the app market, where other app stores have a similar conceptual pricing model to Apple's but vendors clearly price differently as the please from site to site.

On the other hand, I think at some point it's highly likely that Apple's app store subscription policy will raise someone's alarm bells -- not because Apple does anything that is clearly "wrong," but that they create a dominant platform (like MS did with Windows), and once that is done, they can potentially take on an anti-competitive role by virtue of their lockdown of that platform.

I think the way that pricing works in these online markets is evolving and very interesting -- so I'm not waiting for Apple to get spanked, but just very curious to see what they find is going on. Certainly, when arguments were promulgated that text messaging costs to providers are disproportionately low compared to the charge to consumers, that was interesting (even if nothing has been done about it yet).

Yeah, I don't have any interest in Apple or Amazon or anyone else being nailed -- just in transparency and fairness in pricing.

My observation is just that, irrespective of the underlying logic of the price moves, Apple's moves in pricing for music and more particularly books led to an industry-wide increase in retail price of these goods. That parallel doesn't clearly exist in the app market, where other app stores have a similar conceptual pricing model to Apple's but vendors clearly price differently as the please from site to site.

On the other hand, I think at some point it's highly likely that Apple's app store subscription policy will raise someone's alarm bells -- not because Apple does anything that is clearly "wrong," but that they create a dominant platform (like MS did with Windows), and once that is done, they can potentially take on an anti-competitive role by virtue of their lockdown of that platform.

I think the way that pricing works in these online markets is evolving and very interesting -- so I'm not waiting for Apple to get spanked, but just very curious to see what they find is going on. Certainly, when arguments were promulgated that text messaging costs to providers are disproportionately low compared to the charge to consumers, that was interesting (even if nothing has been done about it yet).

If Apple has a transparent cut of the sale model and a clause to price match anything lower, there is nothing wrong with that. If you think books are too expensive, then blame the publishers. I do not see how we can hold Apple responsible for market price when they do not set it. This is a fair model and allows for those who "own" the content to name the price they want. If consumers are at the expense of this, then they need to pursue action against the content holders.

We cannot continue to hold business and retailers hostage. The relationship is moving up the value chain. We interact with the developer and publisher on pricing and value. This is the same with Ebay or any other model where the retailer is providing a medium and not holding the content in inventory...