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Justice Department Presents Opening Arguments Against Apple in E-Book Price Fixing Trial

In a Manhattan courtroom this morning, the U.S. Department of Justice presented its opening arguments in USA v Apple Inc, the antitrust e-book price fixing trial. The DoJ filed suit last April and Apple has consistently defended itself and has said the accusations are "simply not true".

According to AllThingsD, Justice Department attorney Lawrence Buterman presented the government's case this morning, using a slideshow filled with email and phone record evidence that the government says shows Apple colluded with book publishers to drive up the cost of e-books ahead of the launch of the iBookstore.



For its part, Apple's lead attorney claims the company was using the same strategies that worked when the company was building the iTunes Music Store to get contracts with the major book publishers. From Apple 2.0:
Apple's opening statement […] tried to pull the rug out from under everything the DOJ had just presented. [Apple SVP Eddy] Cue, Snyder claims, was just trying to break into a crowded e-book market (one dominated by Amazon) using precisely the same approach he used when he got the company into the music market with iTunes and the applications market with the App Store. Those innovation poured billions of dollars into the U.S. economy, he said. "Apple should be applauded, not condemned."
Eddy Cue -- Apple's senior vice president for Internet Software and Services, and one of its chief negotiators -- sits squarely at the middle of the DoJ's case and was responsible for much of the email and phone traffic mentioned in the government's opening argument. He is expected to take the stand on June 13th.

The Department of Justice has settled with all of the book publishers initially accused, while Apple remains the main target of the suit.

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15 months ago
Rating: 17 Votes
15 months ago

We should know now that price fixing is only ok when Amazon is doing it in order to run competitors out of business.


Except that isn't what Amazon is doing. Amazon is selling at low/no/negative profit margins, they're hoping to make it up in volume. That isn't price fixing, the publishers still get the wholesale price of their books, Amazon sets the retail price, which is many cases is below what they bought them for from the publishers.

Now I'm not saying that what Amazon is doing is great for competitors, but it isn't illegal unlike what the publishers and Apple are accused of doing.

Amazon could be accused of abuse of monopoly power in the market hurting their competitors, but that isn't what this case is about.

For this case and this case only Amazon didn't do anything *legally* wrong, Apple probably did.
Rating: 12 Votes
15 months ago

Except that isn't what Amazon is doing. Amazon is selling at low/no/negative profit margins, they're hoping to make it up in volume. That isn't price fixing, the publishers still get the wholesale price of their books, Amazon sets the retail price, which is many cases is below what they bought them for from the publishers.

Now I'm not saying that what Amazon is doing is great for competitors, but it isn't illegal unlike what the publishers and Apple are accused of doing.

Amazon could be accused of abuse of monopoly power in the market hurting their competitors, but that isn't what this case is about.

For this case and this case only Amazon didn't do anything *legally* wrong, Apple probably did.


Amazon loses money on ebooks... This is why big corporations win, they can play chicken longer...

Amazon buys books at 10 dollars sells a 9,99 (they lose 1 cent), how can they make ANY profit from volume sales ?
They don't and since not that many companies can keep up with losing money (don't forget the cost of running the business itself, not just the buying/selling the merchandise) they just end up running the competition to the ground...

Go ask your tiny bookshops around the corner.
Rating: 9 Votes
15 months ago
This lawsuit is ridiculous. Must be funded by Amazon.

This is all very simple. Book publishers are upset with Amazon because they can't set the prices of their books (they want MORE money not less). They sign with Apple so they can set their own prices. Surprise, surprise, books are higher priced because Book publishers are allowed to set the prices to prices THEY want (higher).

Amazon should be the one sued, not Apple.
Rating: 9 Votes
15 months ago

This lawsuit is ridiculous. Must be funded by Amazon.

This is all very simple. Book publishers are upset with Amazon because they can't set the prices of their books (they want MORE money not less). They sign with Apple so they can set their own prices. Surprise, surprise, books are higher priced because Book publishers are allowed to set the prices to prices THEY want (higher).

Amazon should be the one sued, not Apple.


I like how you call the lawsuit ridiculous, then make a wildly unfounded assertion as to how the suit has been funded.

The free market should dictate prices. Prices shouldn't be artificially inflated simply because the laws of supply and demand are no longer working in your favour.
Rating: 9 Votes
15 months ago

Whatever happened to free choice?

Consumers who don't like Apple pricing, can go to Amazon. Its that simple!


If you knew anything about this issue you would not be asking such a question. :rolleyes:

It has nothing to do with what Apple and Amazon charge for ebook, in simple terms. It is about why Apple and Amazon [have to] now charge extra for ebooks. It is regarding the [forced] change in business model with publishers supposedly changed by Apple under Steve Job's.

It's not that simple, Steve said so therefore it must be true.... Right?
Rating: 7 Votes
15 months ago
OK, let's get this out of the way now...

Doesn't the Government have anything better to do...and so on.

:rolleyes:
Rating: 7 Votes
15 months ago

This was my understanding and so what Apple was introducing was a level playing field and Amazon and the US Government don't like it. Amazon because it means they can't run people out of business. The US Government argues that consumers lose. I would argue that letting Amazon engage in dumping and anti competitive behaviour means consumers lose longer term.

For me as a consumer I've seen the loss of book stores and I prefer to have them. Amazon is driving them out of business.

I lose the ability to thumb through a book before buying it.

I think there's a point where we should be saying no to mega businesses that suck the life out of communities. The crazy thing is allowing this immoral case to proceed also means the IRS and individual states lose income.

It appears that setting a minimum and what would be argued by many as a fair price is what the US Government is arguing is price fixing. The fact that Amazon avoids a bulk of it's US tax by basing itself largely in Luxembourg gives it a huge advantage over retailers in the US or pretty much any country worldwide.

This here is the issue for me. Apple go to set a minimum price that is fair that supports everyone. The US Government raise that another US company (Amazon) as an example effectively worth protecting for consumers. This is really the crux of their case. The US Government I understand is also pursuing for Amazon for $1.5 + Billion in unpaid or avoided tax. Ironic.

I personally think the US Government will lose the case. The intention of laws against price fixing is to stop prices being kept artificially high. In this case it seems a case of keeping the prices artificially fair in the light of Amazon's practices.

I have my fingers crossed for Apple. Americans should do the same, or pay more taxes to make up for the tax that Amazon is negating.


I can't believe what Apple apologists can come up with. "Apple go to set a minimum price that is fair that supports everyone." Really? In capitalism market is supposed to decide what the fair price is not Apple. You have some very Apple-centric model of capitalism in mind.
Rating: 6 Votes
15 months ago
I love hearing from Apple fanboys who don't know ANYTHING about the LAW.

Amazon did NOTHING illegal, NOTHING.

Just like your beloved APPLE reducing their taxes was NOT illegal.

Apple colluded with Publishers to keep ebook prices HIGH.

The customer could NOT just go to Amazon and buy the ebook for less. The publishers were setting the price by forcing Amazon to sell it at a certain price or not offering it to them at all.

BEFORE Apple got involved I was buying ebooks that cost less than the physical books. After Apple got involved the prices of ebooks skyrocketed and now are higher than their physical counterparts.

I hope Apple loses and losers BIG.

They STIFLED competition.
Rating: 6 Votes
15 months ago

OK, let's get this out of the way now...

Doesn't the Government have anything better to do...and so on.

:rolleyes:


The way our government has been going lately, I'd rather they find something like this to keep them busy instead of finding new ways to erode our rights.
Rating: 5 Votes

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