US Government Finally Realizes That Publishers & Apple Conspiring To Raise eBook Prices Is Price Fixing

from the well,-duh... dept

Fri, Mar 9th 2012 1:57pm — Mike Masnick

Almost exactly two years ago, when the big publishers, along with Apple, effectively forced Amazon to allow the publishers to jack up prices on ebooks, I noted that this looked like a classic case of price fixing. Apparently, the US government agrees -- and found enough evidence to go after the publishers and Apple for price fixing. There are settlement talks ongoing, but if they fall through, the government is likely to sue. This probably means that we'll start seeing some lower prices on ebooks. Of course, the stupid thing is that these super high ebook prices have probably hurt the market more than helped. Lots of indie authors have experimented with ebook pricing, and found that the sweet spot for maximizing revenue is often under $5. So while big publishers may have been getting more per sale, it seems likely they were leaving a ton of money on the table by limiting the size of their ebook market with prices that were just too high.

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Filed Under: agency model, antitrust, ebooks, price fixing, pricing, wholesale
Companies: amazon, apple

27 Comments

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silverscarcat (profile), 9 Mar 2012 @ 2:00pm

Oh, gee, ya think?

How long until someone says that the drop in price means revenues are going down due to piracy?
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Anonymous Coward, 9 Mar 2012 @ 2:07pm

Dear Mr Nugent:
I just finished listening to your song "Stranglehold" on youtube I was first introduced to this great tune by .. the RADIO..

I like your music Mr Nugent ... I thin I'll got buy an album ...
cheers
mark
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Glen, 9 Mar 2012 @ 2:12pm

I'd like there to be some kind of a smackdown on Apple and the publishers, I doubt there will be little more than a slap on the hand.
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Anonymous Coward, 9 Mar 2012 @ 2:12pm

Apple supports sweat shops in China. So who cares what they say. I-phones suck and apple knows it, but what do you expect from a product made by slave labour.
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Glen, 9 Mar 2012 @ 2:45pm

Re:
Who cares? Those of us that want to see the market drive the price of ebooks rather than Apple and the publishers. Collusion kinda sucks.
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Anonymous Coward, 9 Mar 2012 @ 2:56pm

Re:
3...2...1
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DinDaddy (profile), 9 Mar 2012 @ 2:57pm

Re:
What did you type that comment on? Unless it's a slightly oder Nokia phone, it was made in a similar or worse sweatshop.

The article is about Apple and the publishers colluding on actions which are anti-competitive. Do you have anything relevant to say about that?
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DinDaddy (profile), 9 Mar 2012 @ 2:59pm

Re:
I don't know, the DOJ seems intent to actually do something, judging by their language. Their bold approach to the ATT-Tmo merger makes me hopeful their bark has some bite this time too.

Apple isn't helping their case by their posturing either. So my bet is on medium level smackdown.
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Zane Stuart (profile), 9 Mar 2012 @ 3:03pm

Response to: silverscarcat on Mar 9th, 2012 @ 2:00pm
What? It hasn't started yet?
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Overcast (profile), 9 Mar 2012 @ 3:10pm

Paying more than 5.00 for a PDF - is not going to happen for most people, lol.

But then the industry's view on SOPA/Copyright has little to do with the free market - I'm surprised SOPA didn't incorporate price fixing right into the bill.
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Anonymous Coward, 9 Mar 2012 @ 3:18pm

"Of course, the stupid thing is that these super high ebook prices have probably hurt the market more than helped."

Don't worry, Mike. I'm sure they'll start blaming piracy increasingly more for their pricing failure, just like the movie and music industries have.
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Monarch818, 9 Mar 2012 @ 3:55pm

Personally I go buy the physical copy of books and then hit up the torrents for the epub or mobi copy. I prefer the physical hard copy of books, but sometimes it's more convenient to just have the book I'm reading on my phone. NOT going to buy 2 copies of the same book!
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Anonymous Coward, 9 Mar 2012 @ 4:54pm

Anti-trust laws being used as intended? No way!!!
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Anonymous Coward, 9 Mar 2012 @ 5:03pm

dont you know ????

EVERYTHING in America is a conspiracy, they are all out to "get you!!"...

also it would be a "Cartel" not a conspiracy...

if your Government does "sue" (??) a group to force them to conform to a certain price, that is "price fixing".

In the free world you are allowed to vary the price of your product dependent on what you believe the market will bear.

That is a fundamental principle of economics, Masnick do you know what that word means ?
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Anonymous Coward, 9 Mar 2012 @ 5:26pm

Re: Re:
IMO it will be a medium to low smackdown. First, APPL is just to important to the "economy" these days. Second, this countries first concern, Israel and their central bank, have been Buying up the Stock like a Mother Fucker

The DOJ will not do a thing that will seriously hurt Israel or the world wide ponzi scheme we have come to expect as normal.

APPL to the moon
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Coward (Anon), 9 Mar 2012 @ 5:32pm

Re:
I'm tired of this whine. In China most people have 2 options: work in a sweatshop or you and you're family starve to death. You can't compare work conditions in China to work conditins in a first world country. Yes it would be better if everyone in the world worked short hours for high pay in a comfortable enviroment, but it ain't gonna happen with seismic shifts in China's government and economy.

Plus this comment has nothing to do with the story about Apple and book publishers colluding to fix prices. This problem exists with Amazon, Sony, and all of the other ebook makers. Nothing to do with China or working conditions.
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Coward (Anon), 9 Mar 2012 @ 5:37pm

Re:
Maybe you should read the original article or do some background reading on why ebooks are priced the way they are. The publishers all got together and agreed that if Apple and the other ebook makers didn't agree to a new business model (the agency model) that allows the publishers to exclusively set the pricing, all of the publishers would refuse to sign new contracts with Apple and the others. That's the legal definition of price-fixing and collusion, both of which are illegal in the US.
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Anonymous Coward, 9 Mar 2012 @ 7:49pm

Re:
You want free market capitalism? Abolish IP and all other anti competitive laws. Abolish govt established broadcasting and cableco monopolies and abolish govt established taxi cab, mailbox delivery, and electricity delivery monopolies.

Can't have it both ways. Give them a monopoly and reasonably regulate it or take away their monopoly privileges.
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Gerald Robinson (profile), 10 Mar 2012 @ 7:11am

eBook price fixing
An eBook is far less expensive for the publisher than paper book, there is no bases for the greedy pricing except stupidity and Apple's incompetence.

The publishers make far far more on an eBook than a paper book. Yes there are constant costs of editing which is the same although it seems to be getting much sloppier recently. But there are huge costs that eBooks don't incur: the obvious is printing and the publishers aver that it is minor (given the low quality of even hard backs today that may be so), but there is transportation, promotion (extra discounts on best sellers etc.), cataloging and inventory, shrinkage; none of which apply to eBooks. Yes there is the cost of format conversion but there are apps for that and many are free.

Boycott Apple!

The publishers are hurting themselves and their authors. If I find an interesting eBook
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Matt, 10 Mar 2012 @ 8:25pm

Relevant to my interests
Excellent timing, with the recent announcement of student textbook collusion on the way!
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Anonymous Coward, 11 Mar 2012 @ 10:16am

Isn't this another example of publishers and others trying to price fix?
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Anonymous Coward, 11 Mar 2012 @ 12:53pm

Re:
It's so cool how you're able to be open about your inability to read.
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Hephaestus (profile), 11 Mar 2012 @ 2:49pm

Re: Re:
can't get cell signal, but I can download a book on the kindle... WTF is up with that?
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Zenstrive (profile), 11 Mar 2012 @ 7:39pm

buy only on sales...
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Narcissus (profile), 12 Mar 2012 @ 1:19am

Re: eBook price fixing
Although I buy a big amount of books, I refuse to buy an e-book that is priced higher than the physical version. To me that's nonsense, whatever they spend on editing.

And I agree with you fully that editing seems to be much sloppier now. I'm far from being a grammar nazi but in the average e-book you'll encounter a sizeable amount of grammmar- and spelling mistakes. It does take away from the experience...
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Narcissus (profile), 12 Mar 2012 @ 1:19am

Re: eBook price fixing
Although I buy a big amount of books, I refuse to buy an e-book that is priced higher than the physical version. To me that's nonsense, whatever they spend on editing.

And I agree with you fully that editing seems to be much sloppier now. I'm far from being a grammar nazi but in the average e-book you'll encounter a sizeable amount of grammmar- and spelling mistakes. It does take away from the experience...
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indieThing, 12 Mar 2012 @ 4:08am

Re: Re: Re:
You may have a different service provider to the one used by Kindle.

Here in the Uk, I find that I sometimes can't get a signal, but my mate, who's with a different provider can.

I just wish all the operators would get together and come to an agreement to share their masts.
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