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Apple's lawyer said the agency model is beneficial to both consumers and markets

The e-books price-fixing trial with Apple has begun, and a U.S. government lawyer accused Apple of conducting shady business practices with the five book publishers. 

"Apple told publishers that Apple - and only Apple - could get prices up in their industry," said Lawrence Buterman, a lawyer at the U.S. Department of Justice (DOJ). 

Buterman also added that Apple's agency model with publishers (where publishers set the price and Apple takes a 30 percent cut) hurt consumers by raising prices. 

"Overall, average prices of e-books went up, costing consumers millions of dollars," said Buterman.

The three-week trial, which started yesterday, concerns the DOJ's lawsuit against Apple in regards to its method of fixing prices for e-books. 

Orin Snyder, Apple's attorney, disagrees with the DOJ's statements. 

"What the government wants to do is reverse engineer a conspiracy from a market effect," said Snyder. "Agency [model] is good and beneficial to consumers and markets."

Snyder added that DOJ's evidence, such as emails from former Apple CEO Steve Jobs, will likely be misinterpreted. He also said that average e-book prices fell after Apple entered the market, dropping from $7.97 to $7.34.


Apple is the target of the e-books investigation along with book publishers Hachette Livre (Lagardère Publishing France), Harper Collins (News Corp., U.S.A.), Simon & Schuster (CBS Corp., U.S.A.), Penguin (Pearson Group, United Kingdom) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany). However, all the book publishers have already settled with DOJ, so Apple is the only company going to trial. 

This all started in April 2012, when the U.S. Department of Justice (DOJ) sued Apple and the five book publishers over anticompetitive practices concerning e-book sales. The book publishers were accused of partaking in an agency sales model with Apple, and the publishers could not let rivals sell the same book at a lower price. Traditionally, publishers sell physical books to retailers for about half of the cover price, which is considered a wholesale model. Retailers then had the ability to sell those books to customers for a lower price if they wanted to.

But when e-books came along, this model was challenged. Amazon started selling best sellers for as low as $9.99 to encourage its Kindle e-reader sales. Publishers were not happy with this because they thought the prices were too low.

However, Apple attempted to resolve this when it struck a deal with publishers to implement the agency model in 2010. This helped Apple at the time of its iPad and iBooks launch. But its deal with publishers made it seem like an attempt to thwart Amazon's dominance.

In April of this year, DOJ used an old email from former Apple CEO Steve Jobs as evidence in the e-books case. The email (dated in 2010) from Jobs to James Murdoch of News Corporation said, "Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.”

U.S. District Judge Denise Cote, who is overseeing the trial, said last month in a preliminary hearing that the e-books price fixing case seemed to fall in favor of the DOJ
 
"I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that," said Cote.

Source: Reuters



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RE: This is why so many people dislike Apple
By testerguy on 6/4/2013 1:56:10 PM , Rating: -1
quote:
Its hard to like a company that does BS like this


I personally thinking liking or disliking any company is irrational. Which answers your entire first paragraph. I believe Wozniak is the same - he doesn't like or dislike Apple - he criticises or compliments things he dislikes/likes - like any objective person. Including myself. As I already told you - you only see me saying positive things because I only really post to correct (normally you) - and you always get it wrong due to your extreme irrational Apple hatred.

quote:
I am calling iut like I see it. Looking at what Apple does, and disliking it doesnt mean someone is imbalanced


Except you're starting out with the premise of 'Jobs is a ....' whatever you called him. Not balanced. Not objective. You haven't even considered the facts in this case.

quote:
You post your drivel, then leave when the debate gets to the point you are losing


No, I post my factual corrections on the odd occasion I come on, and then if my post continues to answer your subsequent replies without any further additions, there is no need to add any more. It's all been said. Actually, this comment I'm writing right now is a good example. Someone intelligent would already have read everything I'm saying right now into my first comment. There was no real need to follow up.

quote:
You are even defending this rediculous price fixing above


So your typical inability to read resurfaces, probably the cause of 99% of the issues we have. I haven't once 'defended' Apple in any way regarding price fixing. I have stated the factual reality that the case hasn't been decided yet, and talked about what needs to be proven for Apple to be guilty. I've also discussed other things such as the price of printing books, and Amazons legality. None of which necessarily constitutes a defence of Apple. It's just discussing the reality. I think sometimes it's just too much for you to understand.

quote:
The fact that you own a Nexus 4 only shows that even YOU don't believe the BS you post about Apples clear superiority


I have never once said that Apple has 'clear superiority' - again, just like always, you read into things incorrectly. If someone points out FACTS about a company or product which happen to be positive, you interpret that as some claim of superiority. Yet it isn't that, it's a claim of precisely what I said, no more, and no less. The fact I own a Nexus 4 is evidence of precisely that.

Just learn to read, please.


By retrospooty on 6/4/2013 2:12:32 PM , Rating: 2
Whatever man. You're either delusional or you're full of shit and I don't really care which... Neither deserves any more time.


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