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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 6/6/2013 3:20:26 AM , Rating: 2
Talk about illogical... You had one and it didnt happen to you so its not an issue?

Why on earth do I even write concise, accurate points, which already cover your nonsense questions, if you lack the capability to read it:

To quote me:

it achieved one of the highest customer satisfaction ratings of any phone

I wonder if those customer satisfaction ratings consisted of just my experiences, or a LOT of customers. Hmmm, there's a thinker...

Clearly it happened to alot of people

Sorry, why is that clear? Where is your evidence for the number of people affected? All that happened was that it became a sensationalist story and Apple issued free cases as a PR exercise. I've seen nothing whatsoever suggesting the problem was real and widespread, and the customer satisfaction surveys paint a very different picture.

Clearly it didn't happen to that extent on iPhone 1-3G and clearly Apple fixed it on the later Verizon iPhone 4 and all iPhone 4S

Again, the fact that they removed the ability for a user to hold a phone in a very obscure way to reduce signal doesn't mean that real users of the iPhone 4 were affected. It just means that Apple didn't want another PR disaster. It also, by the way, proves that the nature of the design itself (having antennas on the outside) wasn't necessarily a flawed concept.

The asinine thing was the "Your holding it wrong" comment from the CEO.

But the thing is, for any logical person - that comment simply makes sense.

If someone comes to me and says 'my beer glass isn't working, when I hold it upside down, the beer pours out' - I would have a similar response. If you use devices in a deliberately obscure way intending to cause a problem, which no normal person would do - you shouldn't be surprised if there is a problem. Using the phone normally yields no problem, and I don't think that people really need instruction on how to hold their phone. ANY normal grip would be perfectly fine. It was people deliberately seeking to reduce the signal who were able to show issues, no more.

By retrospooty on 6/6/2013 8:09:02 AM , Rating: 2
"Why on earth do I even write concise, accurate points, which already cover your nonsense questions, if you lack the capability to read it"

I dont know why you bother... The issue is I seee through your "half truths" and call you on it... And will again.

You are far more angry than intelligent and you are losing again. You are way to steeped in denial and throwing out half truths to even have a conversation with. Either denial, or just trying to argue to prove you aren't a wrong as we know you are. What evidence? The evidence that later came out when Apple ADMITTED AND FIXED THE ISSUE you heaping moron!

Also here... with references to the Anandtech article

"As long as you have a signal strong enough to show five bars on your iPhone 4—between -51dBm and -91dBm—a 24dB drop in signal strength shouldn't drop your call or data connection. However, Apple only uses a very small range of signal strength for showing four or less bars, from -91dBm down to the usable signal cutoff of -113dBm. If your iPhone displays four bars or less, a 24dB attenuation will cut the signal below the useable limit. That's definitely a significant problem—one that Apple has so far failed to address adequately"

Everything I said in my last post covers it. The asinine thing was the "Your holding it wrong" comment from the CEO. It should have been "We acknowledge there is a signal attenuation issue when held a certain way. We are working on a fix- a workaround is to hold it this way [then explain how to hold it, or where to find instruction]".

Now you have been proven wrong AGAIN... Go slink off for another few weeks so you can pretend this didnt happen. AGAIN. See ya next time.

"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein

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