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Tuesday, January 14, 2014

Thanks to the US Government, Amazon Is Back to Being an E-Book Monopoly Again

Posted by on Tue, Jan 14, 2014 at 2:08 PM

Over the weekend, Kathleen Sharp at Salon wrote a great essay explaining how Amazon.com managed to judo-flip antitrust laws into enforcing Amazon's monopoly on e-books. It begins like this:

Apple attorneys are set to meet on Monday with U.S. District Judge Denise Cote, the latest chapter in a strange and nonsensical legal battle.

The case in question involves another of America’s biggest companies, Amazon, and its contention that Apple has been colluding to keep e-book prices artificially high. Antitrust lawsuits are never friendly, but the animosity between some key players in this battle of tech giants is extraordinary — and for good reason.

You may remember that Amazon helped persuade the U.S. Department of Justice to sue Apple in April 2012, claiming that Apple conspired with five of the nation’s largest publishers to fix the price of e-books at a level different than what Amazon had set. Amazon, the web’s biggest retailer, had been selling published books at a money-losing rate of $9.99. Why? To get us to buy its Kindle e-book reader, and to dominate the e-book market. Amazon’s strategy worked. According to court documents, the firm soon controlled 90 percent of the e-book market.

This meant that publishers — who had invested in the writing, production, promotion and distribution of these books — couldn’t sell their wares at the recommended retail price of $14.99. Nor could brick-and-mortar stores match Amazon’s money-losing discounts. Amazon’s product-dumping and predatory pricing helped bankrupt many small-town bookstores. Yet, neither publishers nor independent booksellers sued Amazon, even though they might have had a good case (as we’ll soon see).

You should read the rest of the piece. It's good stuff.

 

Comments (11) RSS

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1
How the hell is $10 "money-losing" for a fucking ebook? Does it really only cost $2 to print, bind, ship, and sell a paperback? For some reason I don't believe it.
Posted by Anonymous Cowar2 on January 14, 2014 at 2:33 PM · Report this
2
Man, readership must be really low if selling pdf's for 10 dollars isn't profitable...

I ~do pay that price for the convenience, but if the roughly $6-$7 I used to pay for paperbacks was profitable, $10 for some electrons has got to be. With the Amazon CD+MP3's that are cheaper than just the MP3's, perhaps physical goods have ~negative value?
Posted by drewm1980 on January 14, 2014 at 2:37 PM · Report this
King Rat 3
So Paul Constant is in favor of me paying $14.99 instead of $9.99. What a dick.
Posted by King Rat http://www.kingrat.us/ on January 14, 2014 at 2:43 PM · Report this
4
@3: Nice takeaway. Trying to supplant dnt trust me for worthless commenter?
Posted by Hanoumatoi on January 14, 2014 at 2:46 PM · Report this
passionate_jus 5
Totally OT, but Oklahoma's ban against same sex marriage has just been thrown out as unconstitutional by a federal district judge. There is a stay in place so marriages won't happen right away and it's sure to be appealed to the 10th Circuit.

But still, big news!

http://equalityontrial.com/2014/01/14/br…
Posted by passionate_jus on January 14, 2014 at 2:55 PM · Report this
6
But the fact remains that Apple and publishers colluded to fix prices of e-books. And that's illegal.
Posted by sisyphusgal on January 14, 2014 at 3:24 PM · Report this
biffp 7
Apple created the evidence against it by publicly stating it would collude with the publishers to keep the prices above what Amazon was charging. Amazon may have arm twisted publishers, but there should have been some savings to the consumer from e-publishing. Apple was colluding with publishers to split those savings with them and give none of them to consumers.
Posted by biffp on January 14, 2014 at 3:42 PM · Report this
8
Ah, poor Paul the Apple worshiper, struggles to comprehend how this fucking giant corporation he adores is no more noble than the other fucking giant corporation he hates. The convicted monopolist just needs to shut up and accept the consequences of its actions. This farce of fighting with and about the court ordered monitor is just showing Apple to be just as dickish as their original crime of conspiring to raise prices.
Posted by cantbeme on January 14, 2014 at 3:56 PM · Report this
Canadian Nurse 9
Apple didn't collude about pricing, they colluded about pricing structure, which is why I think the DOJ's case was BS, and hope they lose in appeal. Amazon was dictating the prices to the publishers, Apple said the publishers could choose their prices but 1) couldn't sell elsewhere cheaper and, 2) had to give Apple a specific %. This made all of the publishers collude to change their contracts with Amazon, but it didn't enforce specific prices.

Apple's structure is better for the long term health of the industry. Publishers know the amounts they need to make off of each title to be able to survive. Amazon's just as happy selling self-published erotica as literary work, so they don't really care about the industry as a whole.
Posted by Canadian Nurse on January 14, 2014 at 5:44 PM · Report this
10
$15 for a fucking e-book is absurd. I love reading, I love writing, and I want authors to get paid decently for their work. But no goddamn way a non-physical book needs to cost that much for it to happen.
Posted by NateMan on January 15, 2014 at 3:20 AM · Report this
11
So, Small Press Editor here. 4.99 is NOT unreasonable for an e-book. Heck, I'd love to be raking in 7.99 or, dear god the decadence, 9.99. An ebook has to be edited, same as a paper copy, it has to be formatted (usually a very different task than formatting for paper.) It has to be marketed. Even a cheap ad runs more than 50 dollars. A good ad is 500. The price goes up from there. And I have to pay people (including the author) to bring the book to people, same as with paper copies. The truth is we sell less than 10% of our stock as paper stock. Ebooks aren't, like they used to be, a gimme or giveaway or niche market. They are now paying the overhead.

But we still give them away for free if you buy the paper copy. We're classy like that.

Posted by MameSnidely on February 11, 2014 at 6:49 PM · Report this

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