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Interesting perspective on how changes in anti-trust thinking since Reagan leads DOJ to value low prices for consumers over fears of monopoly in suing $AAPL rather than $AMZN.
Jason Johnson's profile photoChris Knutson's profile photoBrent Jungclaus's profile photoPjay Pender's profile photo
I still miss Computer Literacy Bookstores, they were the greatest
I think what makes Apple's contract problematic is how it impacts book discounting and pricing across the board. Amazon wasn't dictating prices to publishers before they dumped, they were just dumping for less than the cover price and in some cases trading profits for repeat customers. And correct me if I'm wrong, but I don't think Amazon was colluding with publishing houses to price dump, I think the publishing houses actually were against Amazon in that regard.

I think there's a fine line for the government to walk in enforcing the Sherman Antitrust act. I think Amazon has been towing up to the line, but that it's hard to avoid for a very large company, and Apple jumped right over it by dictating those terms explicitly in a contract and by working with the publishers directly to dictate terms unfavorable to competition.
I think that Apple shouldn't put its hands on everything to has profit... Amazon sell books for less than U$9,99 and I hope that keep this way
And... it didn't begin to answer the question.
What is a reasonable payment per title to the author? Are the "publishers" going to be able to negotiate book deals? Consider G.R.R. Martin-- negotiate for three... it turns to four... then five. Did he exceed expectations? Does he get a bonus for the series being a hit?

What is a reasonable fee for the storage and distribution of titles? (Since everything is already digital in contemporary work... that is one fee; for older material that must be digitized, that is another fee--)

Where is marketing paid for? What about titles with multiple platforms? Amazon currently has links to Audible... but many 'text books' have an audible option within the book . Granted, your Kindle or your nook are not prime mp3 players... too bulky.

If we go entirely digital in the future, it should, by rights, cut costs. Type set costs are gone (tho not editing) and print/ art/ shipping costs are eliminated.

Authors work for months or years to bring us the finished product-- then, editors and publishers work to make the product 'marketable' to the public. I have no problem with folks making a living, but I want to be honest about the cost of a book.
Seem that Amazon cut a better deal to obtain books and a business decision to take a loss on book to attract customers.
Time to get back to busting monopolies. The only people who really benefit from monopolies are the 1%.
The argument is bogus. Once Amazon starts screwing customers due to their monopolistic position (which I don't really believe) then the anti-trust laws will start applying to them as well. I'd like to think that the laws are there to protect the people, not corporations.
Economics 101: inelastic demand. Government needs to control prices sometimes. 
One thing I have admired about Amazon is there ability to value books. You have books free, 99 cents, and up. On the other hand we have publishers - University Presses for example - who are grossly overpriced. Many of the 99 centers on Amazon would be books never published, so its not a zero sum game.

It seems many of these publishers would be happy with higher prices and much fewer customers than lower prices ad more customers. In that sense I think Amazon is far more in tune to the value of the book and giving more customers access to it.
Well,books should've be Free ...
How much would Angry Birds cost in the pre-Iphone environment? How many people would buy them? How much would the developers earn?
Valve's Steam experiments had shown repeatedly that whatever the price of a game, the total profit remains roughly the same, as the ratio of price to copies sold is almost stable.
I wouldn't be surprised if the same economy model applied to Kindle and e-books. The cheaper the book the more of it will sell, all other factors equal. If the publishers refuse to understand it, then they have no place in the new economy.
I think eBooks should cost what they cost. Normal book prices minus the cost of printing and they should be treated like paperbacks. Every author writing a book they are serious about should seek to publish both in hard cover and in ebook formats. What will kill us all is $0.99 books. Books are slowly becoming like the free apps on iTunes and Android markets, interesting to download, and we may or may not ever use them. A book downloaded and never read is wasteful. But eBooks mean a lot of that prep work it takes to publish a book no longer has to happen. So that should be taken into account as well. I have found it interesting those authors who create a series and give the first one away and you have to buy the rest. Some of this authors have been successful with this model.

Now if you want to talk about eBooks versus Textbooks, well, I would argue the greater good should play into this.
I hate seeing paper-back prices on ebooks. Why the hell am I buying the digital version then?

I don't expect ebooks to instantly drop to $1-2, and they shouldn't. But they also should be cheaper than physical copies. If Amazon has the will, and ability to provide them at a lower price, good on them. A monopoly isn't bad if it takes care of it's customers. I've never had a problem with Amazon.
The difference between then and now is that the Nook is more entrenched as a competitive e-reader. There are more e-book stores, Barnes & Noble, Books-A-Million, Google Books in addition to Amazon and Apple. If the pricing model goes back to the old way, there are stores that can compete with Amazon.
Right. And competition is good. Either way, Amazon is not a bad steward of the huge market share that they control.
+Roy Richardson A book bought but unread is still a profit to the author. And it's the authors (more so in the new model) who decide whether there are still books being written or not.

Besides, from what I hear the $0.99 is slowly coming to an end as people are learning that you can't really expect quality at a price that low, unless there's a deliberate business model behind it.
Interesting that the DOJ is concerned about the relatively few people who have E-readers vs the millions who have watched the telco and media industries slouch toward monopoly. From 7 baby bells and ma bell at divestiture to what, four remaining? How many national banks are there vs 25 years ago? But now Apple's new ebook market is a pressing issue? 
I just buy actual books that don't disappear when technology (as it always does) breaks down....
+Tim O'Reilly, I don't think this is an either-or. After nailing $AAPL and the publishers for colluding to fix prices, they can then go after $AMZN for 'dumping' or predatory pricing in a new market (but only after they can show they are leveraging dominance in one market to gain an unfair advantage in another by subsidizing ebook prices).
I'm not too sure i understand why they would go after Amazon. Amazon bought the books wholesale, and then priced them as loss leaders or cheap in order to sell the Kindles. Nothing wrong here.
Apple on the other hand colluded with the publishers to set a price, which is illegal.
Am i missing something?
+Joy Rancid Rita Bunt the books actually stay with the account. I can view an Amazon ebook on a Kindle (linked to my account) my computer, or my Android smartphone. This kind of tech won't just "disappear" casually.
I'm just sick of Apple using collusion to sabotage the inevitable process of disintermediation to line their own pockets. I certainly never buy books, but now that the price of some ebooks is down in the low single digits, I have actually bought and read a few.
If Apple letting the publishers set prices and take a flat 30% is price-fixing, what about all the apps, movies, TV, and movies they sell under the same model? Will they all have to go to an out-of-date system based on physical goods, too?
I think the publisher set floors on pricing are a terrible short term idea, and that in the long term we will see variable pricing. Having the DOJ involved in getting an old industry to learn economics isn't ideal, but hopefully it can accelerate things.

As a consumer, I'm largely indifferent to the price of books and I'm driven entirely by the quality content. But I'd like for the publisher/author to optimize pricing to get the most profit and generate as much high quality work as possible. What I don't want to do is subsidize paper books with ebooks, or fund a publishing industry that doesn't seem to be earning its keep these days.
thanks for the heads up there +Brent Jungclaus but I'm afraid I am old school and need to have a book to hand when I want to read (including in the bath...water v tech..not good) and have found for example my Bloomsbury dictionary very useful when the internet etc is not! If my laptop, andriod etc is not available or working actual books always are...
Could it be, +Tim O'Reilly , that you prefer the agency model over the wholesale model because you'd rather get as much money as you can for your books upfront, and if they end up in the 99 cent bin due to poor information value relative to their usurious cover price, oh well, that's the retailer's loss and not O'Reilly's?
+Brent Jungclaus Amazon can and has clawed back books out of people's digital readers before now. It's not clear if you're buying a book or a license to read. 
The article reads like a commissioned piece by the "old" monopolies, now being pushed out of business by a business model suited to current technologies.
+Brent Logan sure, but due to agency pricing with its insistence of minimum retail price, other ereaders cannot offer discounts which they may be willing to. Anti-trusts care more about consumers rather than publishers, Amazon, Apple or publishers.
Sandy P
As far as I can tell, this lawsuit looks like a lose-lose situation for the reading public. If Amazon wins, that gives them carte blanche to use Wal-Mart-esque pricing to drive out the competition and gain a monopoly. If Apple wins, it gives them permission to continue expanding their price-fixing tactics to additional products. (And if you don't think Apple has been fixing prices, then I would be curious to know how else it is that any new iPod/iPhone/iPad at any store you can think of costs exactly the same as it does at

I can't root for either side, because as a voracious reader who enjoys both paper and e-books, I think I'm going to be worse off no matter which side wins this case.
Except that in the US, under the Supreme Court's 2007 Leegan decision, isn't the sort of vertical price fixing that Apple sought from the publishers perfectly legal?
The reason it is the same at varying stores is that there is such demand that there is no pressure to vary pricing. Indeed, availability may be the bigger issue...
+Sandy P As far as Apple pricing goes, the concept of manufacturers holding retailers to MSRP is not new or unique to Apple. A Costco customer lamented to me last year how Apple wasn't playing fair by refusing to let Costco carry the iPad. I explained that the sticking point was most likely price, that Apple had no need to let anyone sell it cheaper than they were but costco wanted a price they use to get people in their stores. Apple couldn't make them fast enough as it was so there was no need to drive demand.

Sometimes the MSRP is a suggestion, sometimes it's a condition of continued access to the product line. 
They should be set at whatever people are willing to pay for them. That's how Capitalism works.
Remember that Apple negotiated from nothing to create their store. And needed to have a big volume of titles to compete with Amazon. Of course this meant contracts that were favorable to the publishers.
+Ken Harris Where by "negotiate contracts favorable to the publishers" you mean "the same deal Apple has offered every industry (since allowing variable music pricing)"?
I think we need to step back and examine whether government should have its hands here. Where does it end? It isn't as though Publishers didn't take advantage of folks for decades before electronic books. I find the price of them rather reasonable to be honest. At the end of the day, as I said before, the price should be whatever some one is willing to pay for it. Set the price too high, folks quit buying. This nanny state stuff is really getting out of control.
Where does it end? Give me a break! Like Keynes said,"In the long run we'll all be dead."
+Curtis Pavlovec Capitalism is like democracy. It doesn't just work: we have to work it. If you can't imagine a situation where an author might be harmed by a vertically-integrated retail chain or where a buyer would pay more due to collusion in the market, I'm sure some people can. 
There's no such thing as a monopoly in a free market, and collusion only works when the market is already restricted.
Publishers think that is better a monopoly with higher prices as far as they rule the monopoly than create a real market not dominated by amazon... Why publishers think the market is not enough to determine prices? They can choose to sell using Amazon or not, but fixing prices on the headquarters leaves customers with no choice...
So after the author gets paid the question really being posed is how much should the publisher get. Arguably some of course but based on the nearly non-existent cost of "printing" an eBook the cost for a digital copy should reflect that. Isn't that why they still try and sell hardback versions for more than paperback, added costs of printing.

I agree that having one company running everything is a bad idea but the problem with the trust issues are that the publishers are all acting as one large company. Negotiating en masse and making then they do have the ability to pressure Amazon and Apple to do their bidding. What happens if Amazon refuses to keep playing the agency model game and suddenly book publishers just stop letting amazon sell their goods. If one or two do it then it would be suicide, but if they all do it together suddenly you see why Apple sleeping with the enemy is bad for the consumers.

Plus Apple will never discount their goods below cost, they don't have enough cash on hand to sustain that....oh wait, well they wont because....Yeah I am out of ideas, but everyone knows that is ridiculous. Amazon does it repeatedly, they want my brand loyalty, they are earning it the old fashioned way. Cutting me a great deal and maintaining with good customer service so I come back tomorrow, and it works.
What the big publishers really need to worry about is trying to compete in a digital marketplace. Instead of trying to hang onto their unrealistic dream of charging print book prices on eBooks and reaping enormous margins, they need to innovate and work with other companies or create their own digital distribution channels if they are really worried about Amazon putting them out of business. They should also consider the possibility that the ability to buy an ebook for a few dollars instead of paying a $20-35 for a print edition very likely means that more people will buy more titles and their profits will even out over time.
The DOJ should not allow the argument of cheapness to trump the argument against making many other things infinitely expensive for would-be competitors.

The abuse of copyrights and software patents make it infinitely expensive for potential competitors to bring new ideas, new services, and new products to market. That's what the DOJ should be protecting, not things that appear cheap or free because of market distortions or sleight-of-hand.
There are two discussions ongoing:

- First: Are prices allowed to be fixed by a cartel-like structure. The answer as clearly "No". I come from a country (Germany) in which this is done; we even have a law for this. The result is a very static book market which i consider thoroughly dead. The customer is ripped off at every corner, the content selection done by geriatric personnel and innovation (e.g. eBooks) hindered as much as possible. By now 99% of my book purchases are in English, 95% are eBooks.

- Second: What is the fair price for a book? This a questions the consumer has to answer for themselves. This is no argument for or against the DOJ investigation.

I know that publishers are afraid of a race to the bottom. But this race will happen. Authors and publishers will not only fight against competitors, but also those who publish "for free". Unless you want to forbid that, it will change the market.

The publishing process has been a large part of the costs associated with the distribution of content. This is no longer so.
Ebooks are much more convenient that physical ones. If I have 10 physical books, which should I take to work? If I buy 10 electronic technical books I have them on all my devices and don't need to worry about which to take.

As far as amazon: the loss leader approach should be illegal as it is in Germany. It's a predatory practice that gives an unfair advantage to big corporations over small players. If America were really the capitalist heaven they claim the would do more to help the small business instead of only the massive global megacorp at the expense of everyone else. 
+Jason Johnson that makes the opposite of sense. Capitalism hinges on no (or low) business restriction. Obviously some restriction exists, and that is great, but to ban a company selling a product at a loss inn order to gain sales elsewhere is a common business tactic that makes a lot of sense. For example, upon their release, both the Xbox 360, and PS3 sold at a loss to make the product more accessible to consumers, who would end up making up the difference in sales of high-profit accessories. Unfortunately small businesses cannot always compete with major companies pricewise. Making it illegal to not sell items for profit is a nonsensical solution to what is not really a problem. Besides - name one e-reader that was manufactured, and marketed by a small company. Exactly. Being able to outsell competition should not be illegal.
+Brent Jungclaus I totally agree, it's called a "loss-leader" and it is nothing new, and can be great for the business and the consumer. My wife just picked up a "free" antibiotic for my sick daughter at Publix (yes, they get a great plug from me), because they want her to spend money and have some loyalty. Should Walgreen's or CVS be mad they are facing "unfair" competition?
+Jason Johnson , +Brent Jungclaus, and +Scott Sawyer : the "predatory" practice is just one half of the problem. In the free software/open source space, any company can give away software for free. Making free illegal would be terrible for this model that has created so much innovation. The problem is not with free. The problem is with things being infinitely expensive when overbroad patents and creeping copyrights basically forbid any meaningful downstream innovations. By focusing on price, and not at all on structural problems, our anti-trust protections are failing.
You guys are espousing corporatism, not capitalism as capitalism depends on lots of smaller players to add efficiency to the market. Letting corporations give away product below cost creates a massive barrier to entry in that market.

I agree that there is a problem with copyright but the need remains, again, to protect the little guy. The idea needs work as now it has become a tool of big corporations to create new barriers to market. But if you took it away then the small company has no chance. A big corp can just steal the idea and use as many resources as necessary to saturate the market.

Personally I just want to live in a world where our only employment opportunities are with huge corporations. Nothing would stop innovation quicker than that. 
"Personally I don't want to live in a world..."

I wish google mobile would Let me edit posts. :)
What mobile, +Jason Johnson , and are you using the mobile web site, or the mobile app? G+ for Android lets you edit your comments by long tapping your own comment.
The mobile iPhone app. Looks like its not just apple that makes a crappy version for competitors. 
+Jason Johnson no Jason, "capitalism"describes the system I was talking about. "small businesses" or "many competitors" or"many small businesses".has nothing to do with capitalism inherently. Perhaps a basic definition will help:

cap·i·tal·ism /ˈkapətlˌizəm/Noun: An economic and political system in which a country's trade and industry are controlled by private owners for profit.

Amazon is owned by private owners (not the government), and Amazon is run on the basis that their company will generate profits. That is capitalism. If you.have any other basic questions like that, I'm sure there is a local community college, or adult education program in your area that provides some information on entry-level economics.

Corporatism is something entirely, and completely different to anything that we are taking about here.

Basically, just because new, small, local, inefficient private companies cannot always compete with large, efficient, established companies does not mean that capitalism is being destroyed, or abandoned. In the global era, we really have little choice but to accept the dominance (for the most part) of large companies. Besides, the presence of multiple large companies provides the exact same market competition that several small, local businesses would provide.

Also, please explain, with scholarly peer-review sources, how large companies stifle innovation.

+Michael Tiemann please explain what you mean. First off, how exactly is the principle that selling an item at a loss for a short time is predatory. I know that when you use slanted word choices, you can make it sound evil... Let's just go for the home run, and call them Hitler-Style pricing. It doesn't make any sense, but you are clearly more concerned about using language that specifically slants the words to reflect your view.

Amazon does not sell ebooks at a loss to drive out other companies, it does so to drive sales. Some companies use coupons, vouchers, promotional deals, sales, or discounts. If Amazon is a big bad wolf style villain, then so is almost every company out there. Pricing incentives are not predatory, and if less efficient businesses cannot keep up, then our economic market gets better as they fail, and are replaced by superior companies.

And what does any of this have to do with products being "infinitely expensive"? What exactly are the "structural problems" as it is right more, sounds like most of that post is made up.
+Brent Jungclaus

It's ironic that you show up to this thread talking trash and questioning other people's education when you clearly have no idea what your talking about. You might want to look up a guy named "Adam Smith". Also, big companies are as efficient as little companies? Either you're a troll or you lack even the most basic education on this subject.

If you're a troll, good job. If not, get smarter or stop interrupting the grown ups while they're talking. 
+Jason Johnson I didn't question anyones education. Secondly, I provided a source to back up my claim. You provided... nothing to back up your claim. Also, I didn't write a whole comment calling my opposition a troll. I wrote a comment filled with substance, and where necessary using a dictionary definition.

Seriously dude, don't be that guy. If I'm wrong, show me. If I'm not, don't get all butthurt because you tried to prove me wrong without any citation, and I refuted your comment.

I'm being genuine, if I'm wrong, I challenge you to show me. I obviously want an adult debate, that's why I corrected your horribly wrong definition of capitalism (mine came from a google search of "define: capitalism" btw). If you can provide me with a reputable definition of capitalism that supports how you define it, then we can talk. Until then, don't call me a troll if you don't even understand the word you are trying to debate.

And yes, large companies are more efficient than small companies. I'm not sure if you are aware of the principle of economy of scale, but if you look onto that adult education course, I'm sure they Errol go over it. Another simple test to measure the theory is take a large, global company, and compare it to a small one-location local business. Generally, larger companies can provide the same, or better products for the same, or better prices. Their increased efficiency allows them to retain profits at a lower price point.

Seriously man, don't come in here with only insults. I didn't insult you, I made a genuine suggestion based on your questionable knowledge of the topic. You gave a significantly incorrect definition for a very basic concept, I was not out of line. I didn't ball you a troll and I addressed your points. You responded by just calling me a troll, and insulting my statements without actually using any counter arguments? If my arguments are so bad, they should be easy to refute - do that, don't just insult me.
Haha, classic troll. Thanks for clearing that up. Using dirty tactics and then claiming high ground.

Anyone would notice that you've cited nothing unless your pointing to that dictionary entry that supposedly doesn't question anyone's education (I guess the community college crack didn't either!).

If you were informed on the subject you'd know that no one claims that big companies are efficient. Everyone knows theyre not (hint: when a company passes the threshold they stop making and start buying smaller, more agile companies). The argument people actually knowledgable on the subject, but pro-big corp make is that the major market inefficiencies are offset by having less overhead in other areas (e.g. One payroll). Having worked for several very large companies, I don't buy that either but at least it's debatable. 
You have an erroneous definition of capitalism. I corrected you. You have given me no reason to think I am wrong.

I was not questioning your education, nor was my suggestion that you take an adult education course a "crack". You gave a very erroneous definition of a pretty common word, I genuinely figure to could use some basic education on the matter. It's not an insult, we all have to start at the beginning at some point.

Now as to your last paragraph, see, this argument means nothing, nor does it prove anything. I don't care what "everyome says" according to you. You have demonstrated thus far a poor knowledge on the subject. I said I wanted arguments demonstrating that you are correct. Not vague and dubious anecdotal statements. And again, drop the trolling shit. I'm not trolling. If I am so wrong price it. And do better than "oh man... everyone says you're wrong!" That's not a valid argument.

Edit: not related to this debate specifically, but are you still on your phone? If so, are you using the G+ app? If so, did you figure out how to edit comments? I didn't realize fit a couple of days that comments could be edited either (pretty sure I figured it out on accident.)
I'm still on my phone. I see no way to edit posts. Long hold seems to do nothing special because touch is for +1 (which I can't do to my own comments sadly, but the interface still tries).

As for the rest, I paraphrased my definition from Adam Smith (the father of modern capitalist thought) himself. He said clearly in his work that if an entity gets too large it can operate outside the normal workings of the market (aka "market efficiency").

Your definitions and the way you use the various terms don't sound like anything from legit economic scientists but rather US news media. It's sound like the way Rush Limbaugh would try to define these terms. 
When I long press on any post I get the option to +1 (even my own.) And of course, I already mentioned that I can edit, or delete mine.

Also, Adam Smith preached total business non regulation, because businesses will automatically, always do the right thing because that will help their profits. Not sure if you are familiar with Upton Sinclair's The Jungle, but it showed that this was very specifically not the case. This price fixing is another example of business regulation that flies in the face of Adam Smith's, philosophy. According to him, no companies would want to prove-fix because consumers would simply go elsewhere, and the price fixers would lose profits.

Things have changed since the 1770's. Significantly. Big businesses (retailers specifically) are clearly able to operate at a lower cost/sale, and therefore provide their products at a cheaper rate to defeat competition. I also find it ironic that you appeal to the works of Adam Smith when you yourself oppose his ideas as strongly as you do. You call Loss-leading predatory, if it was a bad thing, then according to Smith's teachings, no company would be able to sustain it because they would lose sales.

Long story short, Adam Smith's teachings are out of date, and don't apply to the capitalism that we use today, however much he influenced it in it's early years.
Let's remember that The Jungle is a work of fiction. It would be just as reasonable to quote Atlas Shrugged in economic arguments.
+Francisco Soares Did you READ the article? Prices may be lower, but that's simply not always the best answer.
+Brent Jungclaus In what way is it useful? In fiction you can tailor make the facts to fit your story. As it happens, "Atlas Shrugged" paints a different picture than "The Jungle." Neither are real life.
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