The federal court ruled that apple e-book price manipulation

【 antecedents feed 】
E-book has two modes of pricing, it is a wholesale model retailers after severance, publishers have no right to interfere with retailers prices, one is the agent model retailers’ sales, in the form of such “agency” with publishers into profits.
The former in the amazon, for example, to a certain extent, the buyout sales limiting the publisher’s profit space. The latter in apple, for example. Agent is divided into mode, if the price high, then the publishers and apple will undoubtedly, obtain more profits. So here’s a profit-driven. It is apple’s proposal, make each big publishers in the united front, not low price competition with each other, but a unified sales at a higher price. In which apple has played a guiding role and provides a platform. So the court ruled that apple intends to bid up the price.

to mention is that between apple and publishers have signed a “most favoured price agreement”, publishers aspects will ensure not on the other platform sold at prices below the apple platform ebooks, or apple will lower the price. (from the perspective of profit sharing, this also is generally regarded as a kind of technique of apple binding publishers.)

before the court warrant 】

a few days ago, after the trial and several settlement with publishers, the federal judge ruled that apple alleged joint the publisher e-book price manipulation. The compensation of the hearing will be held later. 2012 year, the ministry of justice on charges of “price manipulation”, for the first time Sue apple and the United States 5 major publishers. Thereafter, publishers are shrinking compromise, in 2013 early settlement. Finally only a apple alone to attend the trial. In a recent trial, a federal judge Denise Cote “to submit evidence of not only the number of fully, and compelling, directly or indirectly demonstrates the apple industry participation and urged to price manipulation”.

the justice department sued apple with publishers to bid up the e-book price, make the price higher than that of the amazon, ultra-low discount, and take this opportunity to grab market share, hit on amazon the Kindle in the ebook market leading position. Specifically, apple and publishers by adopting “agency model”, enable publishers to pricing (instead of the original retailer pricing). But in this case the key does not lie in the proxy pattern, prosecutors alleged mainly apple executives Eddy Cue and others have lobbied publishers, make its accept the proxy pattern, in order to achieve the purpose of price adjustment. After the proxy pattern, apple to expand the market share, publishers have profit compression can be avoided, to avoid the kind of retailer amazon 9.99 $low pricing model. Cote agreed, prosecutors claim, was the amazon of price discount strategy cooperation with pressure publishers and apple price fixing.

in trial results, Cote said the justice department to submit the case is very interesting. She wrote, “ prosecutors to produce evidence that the defendant publisher agreement not to carry out the low price competition, thus improve the e-book prices, while apple has played a key role in promoting the plot. If there is no apple in the ingenious, the plot is not as for so a success – 2010 in the spring, apple the iBookstore the launch has been occupying 20% of the market. “is obvious from the evidence, apple and publishers of” cooperation “is not a coincidence or as a result, the operation of the market but” intentions clear, malignant suspected of illegal business collaboration “.

【 language leakage cat 】

Cote , when amazon were suppressed, apple and publishers can be gained in the ebook market “common interest”. So apple is very wise to seize the opportunity, in the interests behind the proxy pattern to attract publishers cooperate together. Then, with the smooth implementation of the apple agent model, is not yet ripe for e-book industry began to appear the phenomenon of higher prices. Some e-book prices reach 50% even more. Simon & amp; schuster publishing group Carol Reidy proof, apple said “can’t accept there is other place in the market price is so low.” According to the Cote , apple executives also have many similar comments.

best evidence apple, participate in price control is from jobs’ speech. , Steve jobs, apple founder, , I the world dream of home. Apple tried to whitewash Steve’s comments, so as to avoid participating in the suspicion of price fixing, but it now appears that apple’s efforts to get success. In a report, Mr. Jobs had to James Murdoch talk about the amazon 9.99 $sales strategy is weakening consumer perception ability towards the price of the product, and apple will attempt to higher price points. The claim in the the iBookstore online has been confirmed. Live on the same day, jobs in response to interview with reporters said that for the same book, apple 14.99 9.99 $ gap is insignificant, anyway, not long after the price will be convergence. jobs this response to fully prove that apple on the amazon is not in a position to ebook pricing is fully informed.

for the interview, related video please check.

Cote talk about the jobs that will be a solution, that apple to bid up the price of this behavior is informed and intentional .

【 cooperation no longer 】

the publisher of price manipulation with the apple including xie book group ( Hachette ), macmillan publishing co., LTD. ( Macmillan ), penguin group ( Penguin ), Harper. Collins publishing group ( HarperCollins), Simon & amp; schuster ( Simon & amp; Schuster) publishing group, etc. Not only involved in the main publishers are now penguin group bought by a Random House (Random House). In accordance with the trial of the settlement agreement, the publisher will stop in the next two years agency pricing model, and disable the most-favoured-nation treatment protocol. At present, apple suspected of manipulating the price of damages has not yet been determined. But for the publisher’s control make apple cannot continue the previous the proxy pattern strategy, has cut a part of apple’s revenue, states will also move for apple to open.