Dear DoJ: You Need To Sue Apple Again
mikecanex.wordpress.com
mikecanex.wordpress.com
Apple's actions with regard to the Agency Model aren't prosecutable because of any Apple monopoly but because it involves market collusion. Now, if Google and Apple colluded to prevent eBooks from being sold on mobile OS marketplaces without a 30% cut, THAT would be prosecutable.
What's the point of operating a store if you don't get a cut of the sales?
But if you just get rid of the agency model, which the DOJ is trying to do, this naturally goes away. With a wholesale model, Apple, Amazon and the publishing companies can all make money on an ebook sale. The agency model doesn't leave room for two middlemen.
(edit for those not reading carefully: Saying that the contract is willful has nothing to do with the argument. Consumers do not sign contracts with retailers. So applying logic about retail sales is a flawed analysis. Doing things like leveraging the illiquidity of platform choice to increase prices in a way that would be legal for a retailer is not, necessarily, legal for a platform vendor. Apple has control over the market that Walmart does not. That's what the whole idea of "restraint of trade" is about.)
iPads are not sold on contract. iPhones come with a contract, but the contract doesn't force you to keep using the device - just the wireless service.
You can sell the phone and buy a different one to use with the same contract if you don't like it.
(edit: crap, just realized I'd been tricked into responding to rbarooah again. Apologies all.)
You wrote that edit just to try to hurt and undermine me.
I think this is the first time I've seen anything like it here, and it has a really unpleasant schoolyard bully vibe to it.
They were driven out of business through competition from the open internet.
If the current situation is analogous, then over time we can expect open app stores to drive the closed ones out of business. No need to involve the government.
Who here thinks that the open Internet would still have obviously and inevitably won?
Amazon's website is not Apple's store. Amazon, Barnes & Noble, etc. do not sell books through the Apple App Store.
The analogy would be Walmart getting a % from songs bought on an iPod if the iPod itself was purchased from Walmart.
> Amazon's website is not Apple's store.
Indeed, and Apple gets no money from things you buy on Amazon.com.
> The analogy would be Walmart getting a % from songs bought on an iPod if the iPod itself was purchased from Walmart.
Only if you buy those songs through Walmart.
> Only if you buy those songs through Walmart.
With Walmart disallowing songs to be bought from anywhere other than Walmart.
That's why the analogy (which has been repeated over and over) is rather silly. When you purchase something from a retailer you establish 2 relationships; one with the retailer and one with the product you purchased. In the App Store universe, Apple places itself in between the second relationship. Whether this is legal or not I will leave to those with relevant degrees.
But that's not the case, you can buy kindle books directly from Amazon.com and the process has nothing to do with Apple.
But it's your device. When I buy a consumer product -- such as a $700 tablet -- why should the manufacturer (who happens to make enormous margins on it) get a cut of everything else I do on it? Why, if I bought a book in the Kindle app (which I can't do because of this problem), does Apple deserve a penny? I of course can't install alternatives outside of the App Store as Apple prevents it.
This is akin to GM demanding a 30% cut of all groceries that I buy and carry in it. Where else in the market is this sort of behavior tolerated? My television manufacturer demanding a 30% cut of the DVD that I bought. Etc.
A consumer could simply buy an alternative, but that is seldom as simple as it at first blush may seem. "Just use something other than Winodws" a million apologist would rant. That's why large companies get constant oversight.
This is where Apple's incredible success is going to, well, haunt them a bit. When they were the underdog, emerging from years of excellent products but little commercial success, they could get a way with this. As a $600 billion dollar colossus with completely unprecedented profits, however, the behaviors get more attention.
Except that you know this is a strawman, since you regularly argue that the competition is strong:
Apple is a $600 billion company. They are getting away with behaviors that no one else could actually get away with because they're so successful. Companies that large are exactly why the FTC and DOJ oversight exists.
It was true that moving to the competition was hard during the Windows era because there weren't good alternatives. That's a strawman because there actually are good alternatives now, and your comments indicate that you know this.
Oversight exists to prevent abuse of monopolies, not to regulate companies just because they are successful.
I actually said "but that is seldom as simple as it at first blush may seem". Have a bunch of apps and iBooks? Ready to completely abandon them? Accustomed to any of the countless apps and services that only exist on the iPad? Ready to do without them?
Apple's actions are acts of bravado, and they only come from a position of strength. They earned that position of strength, but you can't simply say "Oh don't like it -- this policy and tax that most buyers don't even know about -- then don't buy it". It is hardly so simple.
Severing business or consumer relationships with anyone but a totally incompetent supplier or commodity service involves a trade-off. Some benefits you are accustomed to may not be present, but others which are more desirable presumably exist. Understanding this is part of being responsible for how you spend your money and it applies universally.
Are you arguing that consumers should be protected from having to understand and exercise this responsibility by the government?
Have you ever seen a gaming console? Have you ever seen an eInk Kindle Reader which is tied to Amazons eBook store?
Also here is a fun fact from the past: Before the iPhone mobile App developers (yes, there was stuff like J2ME applications, but it was a tiny market compared to the App store economy of today) were glad if they earned 20% on the price of their products. The providers or download portals pocketed the fat end.
I shudder whenever someone so easily uses it as the comparison.
No one in the world has a problem with the App Store in general. Apple does a fantastic job running a storefront, lubricating a world wide payment and gift card system, etc. They run a tight, gorgeous system. The problem is when they push their reign of influence such that alternatives can't exist. When Amazon can't even link to a web store from their own app. That is just egregious overreaching that is indefensible.
The agency model lets Apple get a fixed 30% no matter what the price the publisher chooses to sell. The retail price is in effect fixed to the wholesale price, and there are no sales and no competition at the retail level.
The wholesale model is the publisher sets the price and the retail sells it for whatever they wish. So one store can offer New York Times bestsellers at 30% off, while another store sells them fixed price, and another store has a "buyers club" that gets you 10% off everything in the store.
The variable pricing model, wholesale, is better for consumers. The fixed pricing model, agency, is better for the retailers. It's the same for publishers since they get their wholesale price either way.
Apple is smart - they think this "sell it as cheap as you can make a profit" model is not for them. It's always been their model actually.
Also notice, that Apple only uses the agency model for Apps and eBooks. Music songs are sold in the iTunes store for a constant price (99 cents).
Apple doesn't use the agency model for music because they are dominant in that market. The agency model was meant to prevent Apple from having to compete with Amazon on price. They couldn't sell at the same price as Amazon without taking a loss.
Apple is demanding 30% of any sale made on Amazon's website through Amazon's app, because it is an iPhone app. Amazon is not selling products through iBooks.
This can't be true while Android is the dominant mobile OS, and Amazon is the dominant eBook reader.
It's unfortunately still very lopsided.
So if they make an add network targeting say, shopping on their devices, they may get targeted for anti-trust suits since they have the far and away majority of control of mobile shoppers: http://gigaom.com/apple/study-apples-iphone-ipad-account-for...
The fact that iPad and iPhone apps store sales are considerably larger than Android sales is inching closer to the point where the govt can sue about that: http://www.wired.com/gadgetlab/2011/12/ios-revenues-vs-andro...
If there is a dip in android sales for a given year (say, due to maleware problems, version upgrades, etc), then you're quite close to the level where they could get a court to not throw the case out at the summary judgement point. Once you can get a case past there, many people will settle to avoid the costs of a case or the dangers of actually losing (which could be braking up the company).
I think that the figures are still too far off on percentage of app store revenue, but don't be mistaken: Just because there is not an actual monopoly doesn't mean the gov't has no teeth to do anything to apple.
Saying that Apple doesn't allow those publishers to sell books at all and then in the next sentence saying they do allow it doesn't help your argument.
Actually a lot of people are forced to buy Apple devices. See Apple's educational efforts as a good example of that.
Am I missing something?
Yes, you are -- Apple is big enough, and dominant enough, that even without a monopoly they can exert significant control over the rest of the market. How often do we hear on here -- strangely by people gloating on Apple's behalf -- that they have locked up complete supply chains, starving competitors? When Apple forced their book pricing model, it forced prices up at Amazon as well. When Apple limits or taxes competitors on the iOS platform, users who usually have no idea of this behavior will naturally migrate to Apple's solution because it provides just that much easier usability (geez why can't I buy that book I want in the Kindle app...oh well, here it is in the App Store). They are using their influence and control of that high-margin device that you paid for to build dominance in their other products. Not illegal or even immoral, but it eventually impacts everyone.
Also, exerting significant control over the rest of the market of smartphones still doesn't mean Apple has forced you to buy their products. Just means they are the leader in their particular market. you don't have to buy ANY smartphone or start a business based upon smartphones. Not sure how this is a violation of anybody's rights.