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Amazon is getting a sweetheart deal out of this. Someone should "follow the money". Allowing Amazon to dump ebooks to destroy the rest of the book industry can't be good for the consumer either.

As a small publisher, our experiences with Amazon and Apple have been like night and day. Apple is very clear in their pricing and terms while you never know what charges and policy Amazon will choose to apply to sales. With sales through Apple, a clear 30% goes to them leaving us 70%. Those terms are far fairer than the old pricing model where you normally would sell your book to a retailer for 40%-50% off of msrp.

With Amazon, you start with the same 30%-70% split, but then Amazon adds on various other service charges.

We strongly feel that any settlement that gives Amazon more control over the book market will be detrimental for small publishers, the industry, in general, and consumers, in the long term.

Sporty... there's no one forcing you to do business with Amazon, but if you do, then Amazon should be permitted to charge whatever price it wants for your product. If Amazon loses too much money doing that, they'll either go bankrupt or will have to raise their prices, but it is their prerogative to set whatever price they like, the age-old "loss leader" principal. Apple and the publishers broke laws. Amazon did not. Forcing Amazon to play by Apple's rules (and let's be clear, this was Apple throwing its weight around, none of this happened pre-iPad) is the spectacular wrongdoing here, not vice-versa. Apple will probably win this legal challenge, because it has enough money to buy every lawyer in the Continental US, but it doesn't make Apple right.

It is odd that the DOJ seems to feel that lower prices are always better. It isn't giving any though to the long-term sustainability of these practices. This sort of short-sighted view is one of the primary causes of the current economic trouble (too many groups chasing short-term gain in a completely unsustainable manner). It seems to me producers have a fundamental right to set the price of their own goods. Consumers are then free to either buy the good or not. Having retailers able to artificially devalue an entire industry is exceptionally dangerous.

BThorn, on 23 July 2012 - 12:47 PM, said:

Where was the DOJ when Amazon and the music industry colluded to raise the price of single music downloads. Prices for consumers went from .99 to 1.29 there. I guess the law doesn't apply to Amazon... it looks more like Amazon paid off politicians at the DOJ.

This post has been edited by JamesChi: 23 July 2012 - 01:23 PM

JamesChi, on 23 July 2012 - 01:22 PM, said:

They didn't. The digital music prices were and are dominated by what Apple wants to charge in iTunes. Amazon was and is only a tiny fraction of the digital music market. The publishing industry thought the same thing would happen with eBooks, that Amazon would just fade away and their sweetheart deals with Apple would go uncontested. They were wrong, and some of us have been saying since the day iPad came out and Apple's prices became standard that a DOJ challenge was inevitable. It is just a shame it took so long and so many of us who were buying eBooks for years before Apple muscled, colluded and cheated its way in have had to pay 40-50% higher prices. But hey, Apple's making record profits, so all's well in the world, I guess.

BThorn, on 23 July 2012 - 02:10 PM, said:

Why would Apple need to collude to raise ebook pricing? Apple's revenue from ebooks is so inconsequential as to make no difference to their bottom-line. Where does it benefit Apple to have ebook prices too high? It doesn't. What does benefit Apple is having a reasonable and sustainable ebook economy (and ultimately that benefit consumers as well).

BThorn, on 23 July 2012 - 02:10 PM, said:

That is such a load of bs. Apple did not set the prices of the e books under the agency model. The publishers did. Apple only got there usual 30% the publishers kept 70%

Oh and by the way just like you said above Nobody was forcing you to buy those books from the ibooks store. The amazon book app has always been available on the iPad and iPhone.

This whole DOJ case is a very weak one on the governments part, and will give amazon a monopoly again. Even Chuck Shumer told the doj this case is a joke. He wrote them a letter explaining why you need to read it.


http://online.wsj.co...NzExNDcyWj.html

BThorn, on 23 July 2012 - 12:47 PM, said:

You've completely missed the math: the pricing model is 30-70 minus extra charges. If Amazon chooses to sell for less, that means the author gets less (i.e. the 70% part of that). Amazon is NOT giving the author a fixed price that then leaves Amazon with a fixed margin to do with as it deems fit. Amazon sets a price and gives the author what it deems acceptable. What sort of model is that for authors to work under? let me give you an example: will you go to work tomorrow not knowing how much your boss will pay you? Didn't think so.

Amazon controls the market. This whole DOJ smozzle is back-aswards: Apple and the publishers charge more than Amazon. So where is the DOJ's complaint? Amazon sells for less thus they have the advantage as far as free market goes. Buyers can follow the lowest price: Amazon. So where does the DOJ get off pursuing this agenda? Regardless if the publishers colluded, Amazon is still the monopoly. If Amazon raised it's prices, THAT is unfair practices, since until recently the customer couldn't go anywhere else.

BThorn, on 23 July 2012 - 12:47 PM, said:

I think you completely miss the point. Amazon used their dominance in the book market to pressure publishers into ebook deals they really couldn't afford to do. Before Apple they had 90% of the market. This Author had no choice but to deal with Amazon because there were few other outlets, because Amazon ran them all out of business. Amazon was gutting the ebook market as it was developing and limiting availability because anyone who didn't want to buy from Amazon may not even know your book exists. If Apple broke the law then the model itself including apps and music would be illegal. It is illegal to use your monopoly power to crush competitors. The publishers have every right to fix a mistaken strategy that is killing their business.

Under the current administration, the DOJ should be called the Department of INjustice.

"Many of the critics of the settlement are acting for their own self-interests, the DOJ said."

Of course they are - they have to make money on the products they produce. good grief!

BThorn, on 23 July 2012 - 02:10 PM, said:

Your wrong on this point too. While Apple/iTunes set a precedence for the digital downloaded track, where Steve Jobs refused to sell a track for more than $.99, when agreements ran out the record industry began making deals with Amazon to change the price, to get more from customers. And it worked. Apple had to charge customers more to keep music in the iTunes store. The record industry and Amazon caused that, not Apple. Amazing how near all new songs on iTunes are stuck at $1.29, the industry's price point, while Amazon is allowed to sell the same for $.99 or less. And those supposed discount tracks for $.69? Yeah, how many of those have you seen on iTMS? That was collusion between the record companies and Amazon yet it wasn't called out. Apple fought to keep the price low ($.99 for track, $9.99 for album) while the record industry (remember how some bands wouldn't put music in iTunes because they didn't want individual track purchasing?) wanted more, more, more. Amazon gave them their way, forced Apple to up their iTunes prices and then Amazon sold the same tracks for less doing the same thing they are with ebooks.

Every product you buy has a suggested retail price. Stores have to pay a certain price, and earn profit from the mark-up. Stores can mark products lower than their competition, but they will lose money if they mark down too low. With ebooks the rules seem to change. Retailers like Amazon want to control their cost for the product. Publishers should be able to at least set the price that they charge for ebooks.