Seeking Alpha

Why is Apple (AAPL) fighting the government over the latter's accusations that the company...

Why is Apple (AAPL) fighting the government over the latter's accusations that the company manipulated e-book prices when the five publishers involved in the case settled? asks the WSJ's Jessica Lessin. One reason is that Apple maintains it has done nothing wrong. Another is that the ramifications will affect digital commerce in general.  A "win would help Apple maintain negotiating clout with media companies" and better compete with Amazon. However, a loss "could expose Apple to restrictive government monitoring and private lawsuits."
From other sites
Comments (7)
  • Tom Walker
    , contributor
    Comments (33) | Send Message
     
    The unintended (one hopes) consequence is if DOJ wins the industry becomes less competitive. Absolutely.
    30 Jun 2013, 09:09 AM Reply Like
  • bd4uandu
    , contributor
    Comments (1860) | Send Message
     
    It looks like Apple is morfing from an innovative software and computer company to a law firm.
    30 Jun 2013, 09:37 AM Reply Like
  • imac007
    , contributor
    Comments (528) | Send Message
     
    Amazon have taken on a new business strategy in recent times.
    1) loss leader pricing on selected ebooks to get kindle sales
    2) kindles sold at cost - people paying for a mobile shopping cart
    This raises barriers to entry while it builds its ecosystem.
    Once an ecosystem pipeline is in place any product can be put in it.

     

    Amazon will claim the rights to set their own prices and negotiate with suppliers for the best product cost.

     

    Publishers fought back by collectively trying to protect margins, a publishers OPEC trying to claw back some control. Amazon were not using lower prices to increase their bottom line, they were eliminating any leverage the publishers had from normal competition between ebook sellers. Courts called it price fixing.
    (Publishers could threaten Amazon with release delays, iBook store exclusives or anything that could be leveraged to get back pricing control.)

     

    Apple will claim they had no knowledge of the publisher talks.
    They will claim that their ecosystem is large and was a logical place for the publishers to try to make a stand.
    They have no vested interest in lower prices since they get paid a flat %.
    Their sales depend on competitive pricing.
    They don't dictate pricing, developers and publishers do.
    30 Jun 2013, 10:41 AM Reply Like
  • Rjmontealegre
    , contributor
    Comments (134) | Send Message
     
    Amazon wants to become a monopoly, the government is helping them in that effort.
    30 Jun 2013, 01:58 PM Reply Like
  • investingInvestor
    , contributor
    Comments (1550) | Send Message
     
    Discount information from the WSJ in order to protect your capital.

     

    First, Apple Inc. has no special power over content creators to manipulate prices. Content creators should try to maximize their profits.

     

    Second, Apple Computer and now Apple Inc. has been very successful at changing the minds of balking content creators in many media including music, movie, tv, podcasts, education, books, and now radio. This Apple program has worked like falling dominos each case. Apple starts slow and momentum carries the day. Greed and fear have driven competitors and content creators to try to undermine iTunes, but Apple has seen them coming. Apple has been permitted to sell the whole catalog (also called selling the book) in most cases.

     

    Third, there is no evidence that Apple tried to set prices or extort content creators. No one has been taken out here! Apple has always pursued the same pricing strategy of uniform prices, like 99 cent songs and $1.99 tv shows, with Apple getting 30 percent off the top. 30 percent is a lot less than brick and mortar retail's 50 percent cut.

     

    Now, Apple's competitors are using bad government to kneecap Apple's future and your access to digital content. This is so unfree, un-American, wrong.
    30 Jun 2013, 11:40 AM Reply Like
  • Rjmontealegre
    , contributor
    Comments (134) | Send Message
     
    Apple has just been trying to sell their alternative approach to Amazon's. That is competition. In the long run this is the best for the market.

     

    I do not understand why the government has to get involved in helping one competitor (Amazon) versus another, particularly when Amazon is so clearly trying to become a monopoly.
    30 Jun 2013, 02:02 PM Reply Like
  • Warren Buffet007
    , contributor
    Comments (955) | Send Message
     
    Apple already win last week this issue, please update your information!.
    And Apple don't fight against any government !. He don't need this!
    30 Jun 2013, 02:41 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector