HardOCP News
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I like how the Apple spokesman said the company will "fight against these false accusations" after the courts found "overwhelming" evidence to the contrary. Apple says it will appeal.
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Apple Found Guilty of Price Fixing
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sfsuphysics
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Hmmm, so no one could compete with Amazon's super low price, and they got a larger group of presumably eBook "publishers" together to find a way to fight against it and it's price fixing?
So here's a story of the kiwi fruit, little fuzzy fruit with tangy tart interior. At one point prices were high for said fruit, and like everything in farming when farmers see there's a high price for a particular fruit they tend to want to go into the game too it takes some years to do so but eventually trees grew to fruit bearing size and it came to market... well when this coupled with imported fruit caused a massive drop in the price of kiwi fruit. So what the original growers did is they "conspired" to form a kiwi fruit association and actually created a grading system for the fruit, where the shape of the fruit would give it a particular grade and of course that grade is what becomes desirable in most stores (in fact most food production grading is a self grading system ... hell even "EPA estimates" on gas mileage aren't done by the EPA but the car makers!) . Well a little known fact (to the public) is that most kiwi fruit grows close together such that they actually fuse into fruit a Siamese twin or triplet if you will, these are referred to as "fans" due to their shape, so most fruits are no longer this "desirable" grade, as a result most fruit couldn't be sold to stores simply because no one wants the "funny looking" ones and as a result prices went back up for kiwi fruit. With a FYI, there is nothing wrong with "fans" in fact if anything I think they taste better because they're allowed to ripen more as fruit growers will pick early to prevent any possibly kiwi fusion.
Now why the silly story about fruit?? Apple... hmmm... either way here was a case of price fixing too by this same definition. And my story is in NO WAY unique to the kiwi fruit either, there's a reason why in a super market every piece of fruit looks "perfect" we've been trained well to think pretty = good due to the grading systems for every fruit out there. But when it comes to non-perishable goods, like microchips, or monitors, or data, then we get our panties in a twist and go marching with pitchforks and torches.
So here's a story of the kiwi fruit, little fuzzy fruit with tangy tart interior. At one point prices were high for said fruit, and like everything in farming when farmers see there's a high price for a particular fruit they tend to want to go into the game too it takes some years to do so but eventually trees grew to fruit bearing size and it came to market... well when this coupled with imported fruit caused a massive drop in the price of kiwi fruit. So what the original growers did is they "conspired" to form a kiwi fruit association and actually created a grading system for the fruit, where the shape of the fruit would give it a particular grade and of course that grade is what becomes desirable in most stores (in fact most food production grading is a self grading system ... hell even "EPA estimates" on gas mileage aren't done by the EPA but the car makers!) . Well a little known fact (to the public) is that most kiwi fruit grows close together such that they actually fuse into fruit a Siamese twin or triplet if you will, these are referred to as "fans" due to their shape, so most fruits are no longer this "desirable" grade, as a result most fruit couldn't be sold to stores simply because no one wants the "funny looking" ones and as a result prices went back up for kiwi fruit. With a FYI, there is nothing wrong with "fans" in fact if anything I think they taste better because they're allowed to ripen more as fruit growers will pick early to prevent any possibly kiwi fusion.
Now why the silly story about fruit?? Apple... hmmm... either way here was a case of price fixing too by this same definition. And my story is in NO WAY unique to the kiwi fruit either, there's a reason why in a super market every piece of fruit looks "perfect" we've been trained well to think pretty = good due to the grading systems for every fruit out there. But when it comes to non-perishable goods, like microchips, or monitors, or data, then we get our panties in a twist and go marching with pitchforks and torches.
Its probably real important to Apple that they win on appeal here. They will bring out their full legal resources to do so. If you've followed this case it is clear: if this ruling stands then the entire Apple App Store falls under the same legal definition of price fixing. The particular agency agreement that is invalidated here has an antitrust violation is the pretty much the same agency agreement used in the App Store.
This kind of incident is exactly why I do not see any moral qualms with grabbing free content from the web. Sellers and publishers illegally and immorally collude to artificially increase prices beyond what the market can bear...and then cry when their unaffordable content gets copied rather than purchased.
See my tears here? Yeah, they're tears of laughter, not sorrow.
See my tears here? Yeah, they're tears of laughter, not sorrow.
Nenu
[H]ardened
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I wonder if an appeal of this nature is in contempt of court.
It certainly shows contempt for the court system.
Could a person be found liable?
It certainly shows contempt for the court system.
Could a person be found liable?
kbrickley
Supreme [H]ardness
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The Agency model is not illegal and this ruling has no impact on the app store ... Apple may win on appeal because of pretrial statements by the judge ... Apple was guilty because of the perceived collusion with the publishers to all change to the agency model simultaneously ... there are no similar problems with music, entertainment, or apps in iTunes
SomeoneElse
[H]ard|Gawd
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I think the biggest point here is that a physical book is supposed to cost more because of the materials used and the overhead costs. a digital form a said book shouldn't cost the same amount and should be less money than a physical copy. This whole Apple is justified to keep the prices up is bogus and doesn't hold water. I promise you that Apple keeping the prices higher is not a benefit for the writers, they will pocket more money than the writer because that is the Apple way.
bigdogchris
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Apple says to publishers "You guys all agree on one, fixed price and we'll sell it at that price" ... but that's not price fixing...
I'm more interested in the kiwi fruit story than the Apple story
I'd bet Apple would be willing to pay any amount as a fine as long as it doesn't have to admit any wrongdoing. Never admitting they're wrong always seems more important to them than actually winning.
Price fixing goes on all the time. But if you don't have political support for it, you must be wary.
Example: Nearly all car dealers sell the spare parts for the same price.
Milk in some states is/was price controlled by the government.
At first, all VHS Movies were... uh... I'm thinking $79.95? No matter how crappy the movie was, or who produced it, or who sold it, they were $$$. Not sure why they dropped the prices. Could have been the courts, or collapse of the agreement.
Many companies tell you that if your price is less that ###, then you will not be a top tier seller.
In this case, Apple had no political support. Sucks to be them, but Anti-Trust is as old as Teddy Roosevelt (my personal hero).
Example: Nearly all car dealers sell the spare parts for the same price.
Milk in some states is/was price controlled by the government.
At first, all VHS Movies were... uh... I'm thinking $79.95? No matter how crappy the movie was, or who produced it, or who sold it, they were $$$. Not sure why they dropped the prices. Could have been the courts, or collapse of the agreement.
Many companies tell you that if your price is less that ###, then you will not be a top tier seller.
In this case, Apple had no political support. Sucks to be them, but Anti-Trust is as old as Teddy Roosevelt (my personal hero).
yelsewshane
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Why do people complain about a company price fixing ? If it's too much don't buy it and buy something else. Seems most people never want to look at themselves in the mirror and say ( what a fool I am ) they just put the blame on someone else. Same bs goes on with monopoly, welfare blah blah blah. You want the government to take care of you because you can't do it yourself then get ready to get owned and your rights taken away.
For the Youngun's:
There was a time in the US when large companies had meetings with their competition to set prices and rules. If you disobeyed, all the others would gang up on you, and put you out of business entirely. These were the Trusts. Like the Mafia but they loaded their Tommy Guns with politicians. Nearly the whole government of the US was corrupt in 1900. And not like the corruption you see today, 100x worse.
There was a time in the US when large companies had meetings with their competition to set prices and rules. If you disobeyed, all the others would gang up on you, and put you out of business entirely. These were the Trusts. Like the Mafia but they loaded their Tommy Guns with politicians. Nearly the whole government of the US was corrupt in 1900. And not like the corruption you see today, 100x worse.
No it isn't, but what they did is colluded to create a perceived scarcity. Colluding to create an ACTUAL scarcity, like falsh memory people have been spanked for repeatedly, is not allowed. As for controlling the retail price, recent SCOTUS rulings mean that yes, they could enforce a minimum retail price on the retailer. For something like your fruit story, where everyone makes an equivalent product, it's the collusion to set a uniform price that is the legal problem. For publishers, where there is only one source for one title form a given author as a generally accepted practice, you could probably justify a per sku minimum retail price. However they all agreed to the same one, AND they don't enforce pricing of physical books the same way. Which is where they wind up in trouble.
Picture it this way:
What if all ISP's in your area got together and decided that $10 per megabyte of data transfer was the Official Price. And anyone who tried to break that was driven out of business by cutting off their infrastructure.
Would you see how a Trust is evil?
Ur_Mom
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Wow. I remember that. I saw prices in magazines and in the catalogs that movie rental stores got and was just floored by the cost. Super high. We always waited for the cost to drop to $20 (which was 6-12 months) before buying. But, all new ones were $80.
The VHS pricing was why there was a Video Rental business on every corner.
Trivia:
There were 3 formats:
Laser disc
Betamax
VHS
VHS won. Why? Most people would not pay $80 for a movie, they would rent, or go to the movie theater.
But the Porno Industry was Home Only. People wanted porno, but didn't want to be seen going to porn theater or seen renting pornos each week.
Since the porno business used low budget technology, and the Betamax and LaserDisc duplicating machines were $$$, VHS mass recording equipment won the battle.
Trivia:
There were 3 formats:
Laser disc
Betamax
VHS
VHS won. Why? Most people would not pay $80 for a movie, they would rent, or go to the movie theater.
But the Porno Industry was Home Only. People wanted porno, but didn't want to be seen going to porn theater or seen renting pornos each week.
Since the porno business used low budget technology, and the Betamax and LaserDisc duplicating machines were $$$, VHS mass recording equipment won the battle.
Ur_Mom
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Plus, recorders were cheap. People could copy/record movies easily. Everyone had a good collection of copied movies/tv shows back then. Blank VHS were a couple bucks.
Laserdisc won me over, though, for the best playback.
kbrickley
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All items being the same prices (like the VHS example) isn't price fixing ... Price fixing is when the companies actually collude to get a common price ... as long as the companies don't meet to develop a strategy they can all copy a common market standard (if they want) ... this is why subsidized smartphones launch at the same price on all carriers (even though the phones might not all be the same price to the carrier) ... this is also why you will see common fees or limitations on phones and air travel since the other companies will let one try out a new fee or limitation and then the others match it ... all perfectly legal
100 different companies selling different products (movie titles) at exactly the same price down to the penny? When production costs of media was <$10, yet consumer price was 8x that?
Really?
All items being the same prices (like the VHS example) isn't price fixing ... Price fixing is when the companies actually collude to get a common price ... as long as the companies don't meet to develop a strategy they can all copy a common market standard (if they want) ... this is why subsidized smartphones launch at the same price on all carriers (even though the phones might not all be the same price to the carrier) ... this is also why you will see common fees or limitations on phones and air travel since the other companies will let one try out a new fee or limitation and then the others match it ... all perfectly legal
The reason all phones sell for the same price is their vendor tier contract.
If Teddy was still alive, nothing would sell at the same price regardless of vendor.
wonderfield
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I believe you're thinking of Betacam. Or, more commonly, DigiBeta.
100 different companies selling different products (movie titles) at exactly the same price down to the penny? When production costs of media was <$10, yet consumer price was 8x that?
Really?
Yup that is the goofy part, the companies have to get to gather and officially agree... If its just a wink wink nod nod, then its legal.
Apple got in trouble because they basically organized the publishers and "asked" they move to an agency model (because they didn't want to sell at Amazon prices, it is apple we are talking about, they could have easily competed on quality/service, isn't that the apple mantra?).
If the publishers would have come up with the agency model on their own, no issue and we would be in the same boat. Since Apple basically rounded everyone up in a year or two and bam agency model... they are in hot water.
Apple would have been in the clear if they just would have said... We work on the agency model, you tell us the price and we will take x%. They could have ignored Amazon and eventually the publishers would have forced everyone else to agency model. Apple/idevices pull was/is strong enough to have made that happen.
Apple got a bit greedy and wanted to level the market right when they entered it.
kbrickley
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100 different companies selling different products (movie titles) at exactly the same price down to the penny? When production costs of media was <$10, yet consumer price was 8x that?
Really?
It was that way because the studios didn't want to sell their movies but they had just lost a lawsuit against the VHS manufacturers so they all decided to support a rental model for most titles. That is why most VHS titles were referred to as being at rental pricing. In some cases they would release the $80-100 title (there was a little range in pricing) for the first 6-9 months and then release it at sell through pricing later. Some titles would launch at sell through pricing but they were very few at the start. It took years and a couple of technology shifts for the pricing models we have now to develop (the rental pricing model didn't die until DVD came out)
Note that monopolies aren't illegal either (if they occur naturally) ... it is only the abuse of monopoly that gets a company in trouble or if they try to form monopolies by acquisition of public companies (although private company monopolies are beyond government oversight)
Perhaps. I know the digital format was used long after Betamax tapes in stores vanished.
This is the point that many are missing. There was a provision that nobody could have a lower price than Apple. That's price fixing.
rat
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VHS won because it held more minutes per tape than Beta. Full stop.
There was porn on Beta.
Porn movies were not 90 minutes. Long ones were 60. Many were 15-30.
sfsuphysics
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Says who? Not that I disagree with the argument, but seriously who says real must cost more than digital? There's no law that says that must be true, I mean think of it as a convenience fee that apparently is perfectly legal whenever you buy tickets online that very often makes those "e-tickets" cost more than buying tickets in person.
All items being the same prices (like the VHS example) isn't price fixing ... Price fixing is when the companies actually collude to get a common price ... as long as the companies don't meet to develop a strategy they can all copy a common market standard (if they want) ... this is why subsidized smartphones launch at the same price on all carriers (even though the phones might not all be the same price to the carrier) ... this is also why you will see common fees or limitations on phones and air travel since the other companies will let one try out a new fee or limitation and then the others match it ... all perfectly legal
Ding ding ding!
First rule of business: Avoid price wars. Compete on "features", because a feature war doesn't hurt profits.
no, that's a myth
VHS won the format war because of cost, convenience, and longer recording times.