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Comment by vonklaus | Hacker News Reader

Makes sense. Apple gets sued for charging more than a retailer that owned 90% of the market in an Anti-Trust case and is fined $450 million.

Verizon is a common carrier that manipulated the traffic in the service it provides from its government granted monopoly for 4 years and is fined 1.350M.

This is why people vote donald trump. It is the voting equivalent of YOLO. It's basically the civic equivalent of a weapon, and proving the point that he can get elected may draw into stark contrast that we might need to make a few tweaks here in there with how we operate going forward.

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You left out the little bit about Apple and the publishers, who, as Adam Smith put it in The Wealth of Nations in 1776: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

This makes limited sense. While Apple did fix prices, 90% of control of the market of a highly elastic good was controlled by a single entity engaged in dumping, which drove out all other competition. If Adam Smith believed in supply and demand (he did, he wrote the book on it) I think it would be hard to argue that responding to a monopoly with 90% distribution of a good with a price increase would make much sense. Even if we assume that it was only with many big publishers, for a subset of books, and that Barnes and Noble and Borders didn't exist and compete.

I would be interested to know if they even made that much in profit. If I could buy a car at 9 out of 10 places I go for $5000, why the fuck would I seek out the one place selling an identical car for $5300? If by chance I didn't shop around, it is likely that I am not motivated by price, and thus descrimination here has a negligible effect.

Now that all small book retailers and Borders Books have gone out of business, and Barnes and Noble is quite close we can look back with 100% certainty and say Apple's anti-competitive tactics of meeting a supply flood with increased pricing was the linchpin in their demise. As we know from history, people will hunt for a bad deal, and ruthlessly work against their own self interest even with significant friction.

Price dumping is good, not bad. The whole reason why competition is good, is because it lowers prices.

The only "reason" why temporary price dumping is bad, is if it is being done for the purpose of raising the price in the future. But I don't think that was what was happening in this situation.

Amazon wins by having prices as low as possible, and beating everyone else at the cost cutting game. This is awesome for consumers as it means low prices.

The only thing that matters in monopoly/price fixing situations is what is good for consumers. Company welfare doesn't even enter into the equation.

> The only "reason" why temporary price dumping is bad, is if it is being done for the purpose of raising the price in the future.

> Amazon wins by having prices as low as possible, and beating everyone else at the cost cutting game.

Amazon wins by dumping, making it very unattractive and then keeping prices low/stabile but using its bargaining power and unchallenged distriubution network to negotiate lower prices than competitorsm, thus it does higher volume, pays less and controls distribution. This is not good for competition, because there is little keeping them in check.

So I think those ideas are "somewhat" at odds.

Price dumping is often embargoed (thou difficult to detect) because short term it is good for the consumer, but bad for the competition. The idea is that you gain control and then you can use that to either keep market share or to raise prices.

largely, dumping is unpredictable. It can backfire, thus great for the market, a competitor goes down and subsidizes many consumers with goods. Or it can buy repreive, in that short term they recover the losses but competitionb moves in, or they can get in at the beginning of a trend and prevent others from getting in.

China did this with solar panels for a while and effectively subsidized solar for the world. It is "good" for someone most of the time, it is usually unclear who.

In a scenario where the person dumping also owns most of the distribution of goods and the infrastructure running most applications, local delivery networks, and content distribution networks like streasming video, music and devices to consume biooks and other media, it isn't great. This goes for apple and amazon.

> 90% of control of the market of a highly elastic good was controlled by a single entity engaged in dumping

Do you have a source for that accusation of dumping? To my knowledge, the ebook division was profitable.

> If I could buy a car at 9 out of 10 places I go for $5000, why the fuck would I seek out the one place selling an identical car for $5300?

There was no place to buy the car for $5000

Source: https://news.ycombinator.com/item?id=11240961

edit: just to be clear, that is a link to this thread, which references the article we are discussing. That article includes a link to the amicus brief filed on Apples behalf from the publishers making that exact claim to the Supreme Court.

Are you saying that your proof that Amazon was doing predatory pricing is an Amicus Brief supporting Apple where the publishers that were accused with apple make the claim?

It is a joke, isn't?

I was claiming you didn't read the bloody article mate. I am not trying to be rude, but if a sworn statement by the people selling books[0], who have the receipts, to the highest court in the land doesn't convince you Amazon itself stated similar numbers on the record.

Amazon head of kindle saying apple is overstating market share, we have at least 70-80 percent, "[apple's] math doesn't add up", in the cnet article Amazon; We have 70-80 percent of the e-book market"[1]

Crediit Suisse also released a famous report with the 90% figure, which was discussed by the wallstreet journal[2]. The daily finance also stated that figure citing interviews as well as the CS report.

I was just having a bit of a laugh at the absurdity of charging them with anti-competitive tactics, when in fact they introduced competition in a welkl agreed upon narrative that is quite literally the definition of a monopoly. It can also be evidenced buy the fact that, they engaged heavily in dumping and while not 100% proveable, the booksellers were aware of their price structure. Knowing that dumping, being charachterized by an outsized market actor selling significant capacity below market value to drive competition out of business, we can retroactively assume with some confidence that booksellers claims of dumping, followed by a steep price reduction and numerous inbdustry actors going out of business could be a decent heuristic to assdume they are correct.

Once again, my point isn't whether Apple was right or wrong, but that it is difficult to assume a rational body would conclude given this information, that Apple had inflicted 450M worth of damage, and also ignore the tight concentration of supply Amazon was allowed to control.

The second point I will now make, which I make here daily now, is that these dynamics are dangerous and we need to be careful about reliance on a single entity as it can be damaging. It is unpredicatable how the laws are enforced, granting a monopoly to one company who uses it to upsell ads and tracking software and fining them under 1/10th of the CEOs annual pay for a 4 year offense, and the implication that a player with 3/4ths of the market control(likely more by their own admission) was allowed to manipulate prices while 2 companies buying and selling goods, negotiated the price they were willing to sell to the market, were served a 450m fine for anti competitive dealings.

I am very concerned about how things are playing out. And I hope others are as well.

edit: further youyr original posit:

>"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

I wanted to point out that while if we assume Smith to be correct here, it is irrelevent. You seem to raise the point that 2 people of the same industry meeting to discuss business is bad for competition. However, Apple a buyer/market maker meeting with suppliers is what one would expect, as that is how markets work. Maybe they were nefarious, but meeting with buyers and negotiating the terms of a new platform and price structure seem fairly in line with what I would expect to find in the economy. If the publishers themselves all met in secret and withheld supply then I don't see how, even if complicit, it would solely fall on apple & if they did in fact do that, Amazon had secured the rights, so Apple would actually be worse off having colluded & agreed to a higher price, while a market leading competitor enjoyed a better rate.

[0]http://www.scotusblog.com/wp-content/uploads/2015/12/No-15-5...

[1]http://www.cnet.com/news/amazon-we-have-70-80-percent-of-e-b...

[2]http://blogs.wsj.com/marketbeat/2010/02/16/analyst-amazon-e-...

[3]http://www.dailyfinance.com/2010/02/17/amazons-e-book-market...

If you're mad about the ebook market concentrating on Amazon, you should be absolutely furious at Apple over agency pricing. That was when ebookstores were launching and competing for attention. Agency pricing blocked a critical dimension of competition when the big wave of new ebookstores was trying to get off the ground.

And even if Apple didn't want to compete with Amazon over price, others did. For instance Google - their Play Books pricing model seems to be "discount whatever we can, wherever we can". Even in these "agency lite" days, they're still a useful price-match reference for the Kindle Store. Or consider Kobo - they had a regular stream of coupons that made them worth checking for a lot of books... until agency pricing clamped down on the books you could apply them to.

Instead, agency pricing more-or-less froze the ebook market starting in 2010 until 2013 or so (when the last publisher defendant settled and started allowing discounting again), entrenching Kindle as the default platform for most readers, crushing smaller companies that wanted to try something different. More over, this has worrying downstream effects - encouraging many independent authors to be Kindle-only and so on.

> If you're mad about the ebook market concentrating on Amazon, you should be absolutely furious at Apple over agency pricing.

Pretty consistently, when I am not fucking about on here and trying to have a good sense of humor about various absurdities that we have all come to accept, I make the same broad points. So no I don't actually care that that amazon has the ebook market, and it wasn't encouraging that if Apple hadn't raised prices Google was waiting right there. My point was that Apple acted quite rationally however the system is unpredictable and rife with power imbalance. Which underscores the point I always make which is that; in this example, Amazon had a massive power imbalance.

However, I also find it dosconcerting that Apple has end to end control over an entire ecosystem, albeit smaller than Amazon and Google.

I Also find it disconcerting that almost exclusive access to internet and telephone communications is owned by 4 companies.

I find it slightly absurd that one company controls almost exclusively the english language interface to the internet, owning operating systems, hardware, isps, DNS, browser, search, most code cdns ect.

Amazon owns most of the underlying hardware developers build on, by some counts they have more servers than google. They own distribution of media both print and AV, as well as distribution of physical goods, which they service themselves and soon they will move deeper into transmission with automated freight movement of goods. Given that most manufacturing will go completely automated soon, Amazon will have the ability to operate the entire value chain almost completely aurtomated.

Apple owns cellphones, router, laptops, music distribution, video distribution, controls a nontrivial sofgtware marketplace and has tons of other vertically and horizontally integrated side services.

> Instead, agency pricing more-or-less froze the ebook market starting in 2010 until 2013.

Agency pricing has caused a systemic underinvestkment in infrastructure at a time when it is more dire than ever. So while "encouraging many independent authors to be Kindle-only and so on" may be a problem, it has likley been solved by the millions of voicing empowered by the internet.

so, i am trying to simply interject that we have maybe one more chance to fix it, and I should try and encvourage people to think at a higher level (not talking down to you as you seem to have more domain expertise) but in this sense it is kind of like a fractal pattern right, this small issue of content distribution and collusion, is actually a very tiny symptom of a very big content distribution and high concentration problem set.

tl;dr I torrent e-books.

> I was claiming you didn't read the bloody article mate. I am not trying to be rude

Then you should read what people post. Perhaps then you won't sound like a rude person.

I diddn't said anything about the 90% market sahre, I asked about your accusation of price dumping

And until now you have provided 0 proof of it. Amazon was selling some books at a loss but the whole division was profitable. Amazon was investigated by the DOJ and they didn't found anything

So yes, I will ask again, what is your source for the price dumping accusation. And, no, something said by the publishers accused is not proof of anything.

He defined capitalism.

Such conspiracies are not even remotely confined to capitalist systems, this is a problem with human nature that no system is capable of fixing.

> Makes sense. Apple gets sued for charging more than a retailer that owned 90% of the market in an Anti-Trust case and is fined $450 million.

No, Apple got sued for conspiring with the publishers to raise the prices and force Amazon to rise the prices as well (through agency pricing).

The iBookstore has been a near total failure too, so all Apple really accomplished is to make readers pay more for books on Amazon.

> force Amazon to rise the prices as well (through agency pricing).

I think those Amazon <---> publisher contracts all got nullified as part of their settlements with the government.

As far as I know they're still in effect, those publishers have seen their ebook sales go down substantially, which is blamed on the enforced price increases due to agency pricing.

And you'd otherwise see Amazon's return to its old scheme where normal ebooks never cost the consumer more than $9.99, whereas, to take a random example I just looked up, Jim Butcher's latest novel published half a year ago goes for $13.99, ~$1.50 more than the paperback and only ~$2.50 less than the hardback: http://www.amazon.com/Cinder-Spires-Aeronauts-Windlass/dp/04...

I'm not finding much in the way of settlement results (overshadowed by similar sounding, more recent news), but articles like this: http://goodereader.com/blog/commentary/agency-pricing-for-eb... claim that the publishers were forced to abandon the agency model:

"When the publishers all settled out of court they were forced to renegotiate their e-book distribution contracts with Amazon, Apple, Barnes and Noble, Kobo, Google and all of the other minor players."

That article also says HarperCollins since returned to it, and this one: http://www.digitalbookworld.com/2014/simon-schuster-strikes-... says Simon Schuster returned to it as well. I'm not sure about the others.

Definitely agency model pricing, it even says on the page "This price was set by the publisher".

Right, but the original contracts were voided, and the publishers have since gone back to the agency model on their own in the past few years.

> This is why people vote donald trump

I'm sure people vote Donald Trump for many reasons, however I don't really understand the need to insert Trump in this conversation, and given Trump business record he is no stranger to shady business practices.

As for Verizon fine vs Apple fine , I'm no lawyer so I don't know what Verizon's case maximum penalty was, though the fine seems quite low.

edit: s/tactics/practices

It's just a topical way of saying "this is why people get disenchanted with government." For some people, supporting Trump is just a "screw you" to politics.

Sure, but look at the shitty sub-thread it's generated.

Do I have to?

Or to civilization.

It is pretty relevent. I am not being sarcastic here, I will elaborate. Outside of the 1970s in switzerland when an influx of capital poured out of Russia into banking safe havens, there has not been many negative interest rates. So typically to get out of a poor economy you employ a range of tactics. Monetary policy being a main one. Of course we can't do that as we can not really lower interest rates as they are essentially 0. This is also a component of the risk free rate, which is essentially negative.

Fiscal policy being the other one. However, we don't have money, and since the amount of money in the economy grows exponentially, when you have outsize lending the amount of money gets ratcheted the fuck up.

So you have no more levers to pull here.

Russia, I beleive their equivalent of secretary of state, that there was "a new cold war", just google that phrase. Also, the people Motherfucking Security Board of the Bulletin of Economic Scientists[0] have set the doomsday clock the closest to midnight it has ever been. recently? no, ever.

No one is talking about the ban China just laid down on any foreign entity competing in technology. Happens on Thursday. In a loose interpretation, it would only be all media companies, anyone with published works and media, and any imagery. Darker interpretations have it being interpreted as "publishing" being the app store. However, it is all based on a single reuters qoute and the law which has been published, which you can look up.

Then you have US banning china from selling their flagship phone (happened today/yesterday).

Unemployment is insane.

At this point a rougue agency has near complete control over the entire worlds communications.

N. Korea is firing nukes and shit, but honestly that isn't even a big deal at this point.

We created a fucking rogue state in the middle east, and hundreds of thousands of people are fucking stampeding through the world to get out of there.

Stock market is "up" from the 3.3 TRILLION dollar nose dive the world markets took in the opening 2 months of trading.

According to 538[1] it looks like we have effectively grasped this as a nation, and have identified the economy and a poorly run government as the top 2 issues.

Now I am about as cynical as they come. However, I am a fucking patriot even with my fairly contrarian views. I refuse to believe that Donald Trump as a person is how the nation succeeds, and I hope most people believe this as well. HOWEVER, the verizon/apple thing (btw just currently going to trial to prevent the governemnt from getting the last 1% of the phone) is indicative of how fucked up everything is. So, yes I do think the election is fairly relevent to this. If you will notice in history, people will put up with horrible consistent conditions, but they do not fare well with uncertainty. So that was my point.

[0]http://thebulletin.org/press-release/doomsday-clock-hands-re...

[1]http://fivethirtyeight.com/features/year-ahead-project/#part...

> Apple gets sued for charging more than a retailer that owned 90% of the market in an Anti-Trust case and is fined $450 million.

No, Apple and the publishers were sued for colluding to fix the prices in all the stores, including the ones from Apple, Amazon, B&N or Sony

So, you're saying that since there are major issues with the current system the best idea is just to burn it to the ground by electing a reckless maniac? That's just a way to make sure everyone is equally screwed.

Historians centuries from now will never understand how the famous and wealthy scion of one of the wealthiest families in the most famous and wealthy city in the world was ever perceived to be a "reckless maniac" outsider. This guy is as inside as inside gets. His entire public persona is a calculated pose. He was recorded saying that he would develop such a persona, were he ever to deign to run for office. A vote for Trump is the opposite of a vote to burn down anything, no matter what the rubes think.

If, as seems more and more likely, Trump is elected, I guarantee the following: no "border wall" will be built, the TPP and TTIP will both be ramrodded through, and the "1%" will get even more "1%" than they already are.

> He was recorded saying that he would develop such a persona, were he ever to deign to run for office.

Source? There's a quote about him claiming that he'd "run as a republican, since they're the dumbest voters in the country." but that quote has been debunked.

http://www.snopes.com/1998-trump-people-quote/

Like Baltimore, sometimes you have to burn shit to the ground before people start listening.

The media didn't care about the peaceful protests over the Freddie Gray murder. But burn 1 CVS down and everyone shows up.

> reckless maniac

That's an absurdly partisan statement considering his likely opponent is currently under investigation for reckless behavior while serving as a senior government official.

His opponent's level of reckless mania is not pertinent here. (Or should that be maniacal recklessness?) Also, there's nothing partisan about Trump-bashing. People from all over the political spectrum have been making common cause over it.

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