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Apple CEO Tim Cook may testify in the e-books antitrust lawsuit filed against Apple and book publishers by the United States Department of Justice, reports Bloomberg.
The lawsuit was originally filed in April of 2012, and has focused on the so-called 'agency model' for pricing ebooks that Apple attempted to negotiate with a number of publishers. Apple had pushed for the agency model in an attempt to dilute Amazon's power in the book market, where it had offered vast discounts, even sometimes selling books at a loss, in order to attract customers who would make other purchases through the site.
But the Department of Justice believes that the agency model as implemented by the publishers at Apple's behest amounts to collusion, with contracts between Apple and the publishers including language that prevented the publishers from offering lower pricing to competitors than they did to Apple. Contrary to the government's claims of an anti-competitive impact from the agency model, Apple and several of the publishers have argued that the move has fostered competitiveness by limiting Amazon's stranglehold on the book market.
The Department of Justice has settled with all of the book publishers initially accused, while Apple remains the main target of the suit.
Top Rated Comments
Ironically even Apple, the largest market cap company ever, doesn't even have a basis to refute that amount of power, no matter how many lawyers they have!
Thank God that corporations do not have the power to defy governments. Not yet anyways.
Power has shifted over the centuries from the church to government. And now it is shifting again, towards the corporation.
If corporations become more powerful than governments, we will regret not having prevented it.
Nobody knew how to turn a buck like Steve Jobs. Nobody.
Thank God that corporations do not have the power to defy governments.
Corporations (legal persons) and natural persons have exactly the same amount of access to fight (defy) "government regulators" which have not yet been first PROVEN to be "arbitrary and capricious". NONE.The cases are decided in "administrative court" with a standard of justice of "regulator presumed correct". No, I am not kidding. ALL regulators. ALL regulations. Heard of any new regulations lately?
Looks like the DoJ wants a small pot of gold themselves.
Just look at the list of the top 40 fines issued by regulators for the past 4.5 years. You would be shocked!I would love it if Apple would publish a verified list. It might tilt the politics.
Rocketman
Amazon are the villain. They've used their dominant position to bully book publishers into accepting outrageous terms. Those terms aren't for the benefit of customers. Their drive to to force eBook pricing at $10 or less is not because the poor oppressed people deserve $10 books. It so they have a tidy sales soundbite to drive customers away from physical books (where publishers can set their own terms) to the Kindle platform where Amazon's word is final. Basically Amazon are trying to control the entire concepts of books. They can't control the technology behind physical books, so they're trying to kill it in favour of their own. I find that pretty ugly and scary and hope they don't succeed.
Apple are the villain. They've used their dominant position to bully music publishers into accepting outrageous terms. Those terms aren't for the benefit of customers. Their drive to to force music pricing at fixed price points is not because the poor oppressed people deserve Apple-priced music. It so they have a tidy sales soundbite to drive customers away from CDs (where publishers can set their own terms) to the iTunes fairplay platform where Apple's word is final. Basically Apple are trying to control the entire concepts of music. They can't control the technology behind physical music, so they're trying to kill it in favour of their own. I find that pretty ugly and scary and hope they don't succeed.Let me proactively guess: "music is totally different than books" and "what Apple did for the music industry was save it", etc.
The concept of the competitive nature of capitalism is to drive prices as low as possible for consumers. When the competition is thinned out and/or allowed to collude, this fundamental benefit (for all) breaks down and it flips into an exploitation-based relationship between seller & buyers (see the "big 3" dominated cell-phone industry). Apple did wrong here, as the play was to make Apple and book publishers much more money at the consumer's experience... not really do anything that delivered a greater benefit to those consumers.
Amazon has it's own issues but Amazon pricing- thinnest margins or not- is generally favorable for the consumers wanting to buy what Amazon sells. Capitalism in a pure form would have competitors beat Amazon at it's own game by finding some way to price things better than them... not by entering into agreements to put profits before doing what is best for consumers. If no one could find some way to beat Amazon's pricing in a competitive market, than the drive to best competitive-driven pricing had been perfected at Amazon (move along to another market if you can't compete).
If Amazon was accomplishing this by taking a loss, eventually the losses would pile up and Amazon would go out of business. Then the market would be free to compete anew in trying to find the ideal price points for products formally sold by Amazon. There would be no more lock-in with Kindle than there is lock-in with iDevices/iTunes. Even if Amazon or Apple managed 90% market share at a loss, eventually the losses would force them out of business or into raising prices to profitability. At that point, new competitors could step in and compete.
I look at Amazon and see a good competitor for Apple... someone to keep Apple in check. If I want to fantasize about some monopoly scenario where a company is going to ultimately fully own an important market and exploit consumers by ripping us off with monopoly-based pricing, I'd be much more worried if that company was Apple (which consistently demonstrates a fundamental focus on relatively fat profit margins, right off the top). If Apple ever got a monopoly hold on any market, I'd hate to see what Apple would do with it. Note: I own a lot of Apple products and like Apple just fine but I do know enough about this particular event to believe (IMO) that Apple was very much in the wrong for it's part in this. There was no tangible benefit for consumers in what Apple did here- just wins for Apple and the book publishers if they were able to get away with it long-term.