A coalition of authors and well-known booksellers have come forth to back Apple in a petition to overturn a recent ruling that stated the company was liable in conspiring to fix the prices of electronic books when its iBooks store launched on the iPad in 2010 (via Cult of Mac).
Together, the Authors Guild, Authors United, the American Booksellers Association, and Barnes & Noble have filed a 37-page amicus brief that states Apple was in fact enhancing competition and benefiting its customers.
“We are pleased to lend our support in this matter, critical to anyone interested in a competitive and diverse literary marketplace,” said Mary Rasenberger, executive director of the Authors Guild, in a statement. “We fundamentally question the wisdom of the Second Circuit’s use of antitrust law to punish a business arrangement that demonstrably increased competition in the e-book marketplace.”
The brief falls in line with Apple's petition of the Supreme Court to review the case this past October, after first being found guilty of conspiring to artificially inflate the prices of e-books back in 2013, when the case started. The amicus brief filed by the authors and booksellers backs up Apple's attempts at overturning the ruling, stating that a positive outcome for the case is "critical to maintaining a healthy marketplace for the ideas and First Amendment-protected expression that authors and bookstores facilitate."
The groups even mention Amazon as more of a "disruptive" force in the e-books market, with a "loss leader" strategy that led to domination over the digital bookselling marketplace. The groups use Amazon's recent public battles with publishers like Hachette, where it essentially ceased selling any of their novels due to a price point disagreement, as a primary example. They also look at the market monopoly Amazon held before Apple entered with iBooks in 2010.
“With a 90% market share, nearly every customer who wanted to purchase an e-book had to do so through Amazon,” the brief states. “Amazon could exercise this power to suppress specific publishers, authors, or messages with which it disagreed, with impunity. It also could steer the culture toward the ideas it valued. Amazon controlled what e-books were promoted on its home page, what e-books were recommended to consumers, and what books appeared at the top of a consumer’s search results when she searched for e-books on the Amazon.com website."
With no response yet from the Department of Justice regarding Apple's filing for a review, the company still has an uncertain future in the two year-long case. All respondents have until January 4 to file a response in opposition to Apple's petitioning of the Supreme Court, so the next leg of the case is just over a month away.
Top Rated Comments
Apple was smart to not include the language because it did seem wrong. THe question is whether the final contract was still anti-competitive. My personal opinion is that it is not, but the early language certainly give the appearance of problems. Can Apple be held liable about language that was ultimately removed from the final contract? I think this is the bigger question and why they are fighting. Frankly, Apple put themselves in this spot and the question is did they do enough to back out before the ink was dry. If I read the final contract, on its own it looks fine. It's the backstory that looks shady.
Based on all this, I understand why they went after Apple, but I also think they went to far, since Apple ultimately came to their senses and back off the bad language.
Again, my take, based on non-expert reading of the details.
At the time this was taking place, Amazon was selling the media below cost. They were also paying the cellular data providers (no wifi in early Kindles). If they were also selling the Kindles below cost (which, at $399 with no middleman, isn't likely, but possible...)... The near-term goal was not "sales of digital media." The goal would have had to be "to create a hardware-specific, proprietary market for ebooks."
If media sales was the goal (and long term, that's a logical goal), Amazon had to envision a future where they were no longer selling that media below cost. How, exactly, would they do that? They could either pay less for the media (which is what the publishers expected), or raise prices to the consumer.
The success of iPad (and phablets) killed that original vision for Kindle. Multi-purpose computing devices have clearly won, and Amazon can't afford to limit their customers to a particular hardware platform. They could well be selling Kindles at a loss in this environment - it's not just about selling media, it's about selling groceries, appliances, jewelry... Do you see Google when you power up, or Amazon?
My point has nothing to do with the merits of the price-fixing case. The verdict is what it is, the plea deals are what they are. Your original comment was specifically, "...so that the perceived value of books would remain artificially high." I took that to mean all books, including print books. How could it be otherwise? (That was one of the publishers' concerns - grossly undervaluing content, grossly over-valuing the contribution paper and ink make to the cost of a book.) So... how do publishers keep the value of all books "artificially" high? (You needn't respond - since the publishers weren't accused or found guilty of fixing the prices of print books, it's "irrelevant.")