DOJ Lawyer Says Apple's E-Book Price-Fixing Cost Consumers "Millions of Dollars"
June 4, 2013 12:11 PM
comment(s) - last by
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
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.
This article is over a month old, voting and posting comments is disabled
RE: Question marks over Amazon
6/6/2013 8:56:44 AM
What the hell are you talking about?
To prove predatory pricing you have to prove 2 things
1. Price below cost
2. Intent to eliminate competition from market
Both of those cannot be proven here. It's that simple. Amazon is not charging people less than what the publishers are charging them. Amazon is not putting anyone out of business either.
Their Kindle and ebooks are incentives and used as incentives(marketing) for people to enter the amazon ecosystem.
If you accuse amazon of predatory pricing then you might as well accuse apple and google also because they're offering free apps. Free apps is literally below any amount and type of cost.
RE: Question marks over Amazon
6/6/2013 10:33:11 AM
"What the hell are you talking about?"
The guy is either mentally imbalanced or he is just trying to defend his position past the point where he lost the debate. Either way LOL.
"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher
Federal Judge Sides with U.S. DOJ in Apple E-Books Preliminary Hearing
May 24, 2013, 11:46 AM
DOJ Uses Email from Steve Jobs as Evidence in E-Book Case
May 15, 2013, 10:14 AM
DOJ Could Sue Apple As Soon As Today Over E-Books, Works to Settle With 5 Publishers
April 11, 2012, 9:15 AM
UK Teachers Want Parents to Cut-Off Their Children's Internet, Tablet Use at Night
April 17, 2014, 3:40 PM
Quick Note: Chrome Remote Desktop App for Android Launches
April 17, 2014, 9:26 AM
Report: Apple Plans to Integrate Shazam Song Finding Functionality into Siri
April 17, 2014, 9:15 AM
Bring Your Own Battery: LG Isai FL Likely is G3, First U.S. Quad-HD Android
April 16, 2014, 7:38 PM
Project Moonshine: Google's Plan to Flatten Android App Icons Leaks
April 16, 2014, 1:46 PM
Apple, Microsoft, and Major U.S. Wireless Carriers Embrace Smartphone "Kill Switch"
April 16, 2014, 10:08 AM
Most Popular Articles
Cities to Carpoolers: Sharing Your Car is Illegal, We Will Seize Your Cars
April 4, 2014, 9:17 PM
Taiwan's AOU Claims to Have World's Highest-Res. OLED Smartphone Display
April 11, 2014, 1:44 PM
iPad Exploiter is Freed by Federal Appeals Court
April 11, 2014, 7:40 PM
It's Very Likely Neanderthals and Humans Had Sex, Produced Offspring
April 10, 2014, 8:40 PM
A-10 Warthog May Live to Fight Another Day with Support from Lawmakers
April 14, 2014, 9:41 AM
Latest Blog Posts
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information