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Apple loses, Amazon wins all

15 July 2013

The big story this week is the devastating news for Apple that it has lost its case. A federal judge in New York has ruled that Apple did collude with five big publishers to fix ebook prices. The judges' s verdict was that: "The Plaintiffs have shown that the Publisher Defendants conspired with each other to eliminate retail price competition in order to raise e-book prices, and that Apple played a central role in facilitating and executing that conspiracy. Without Apple's orchestration of this conspiracy, it would not have succeeded as it did in the Spring of 2010."

There is rarely a case in the book business in which a piece of news can be so differently received. Do you take the view that Apple, in its arrogance, deserves to pay the substantial sums which will be imposed because they have conspired to force up the price of ebooks for the consumer? This is the view from the world of technology as well as the legal one.

Or do you say, as much of the book trade on both sides of the Atlantic , including the Bookseller, has done, that it was just an attempt to stop Amazon trying to entice consumers to buy ebooks, especially through its Kindle device, at very low prices?
The regulatory authorities on both sides of the Atlantic have tended to support Amazon whenever it has come to a showdown. Many in the UK book trade were astounded when the giant internet retailer was allowed to go ahead with its purchase of The Book Depository, even though it was one of the few companies offering any challenge to Amazon. By deciding that Amazon did not yet have a dominant position in the UK book trade as a whole, the UK Office of Fair Trading ignored the fact that it certainly does have a monopoly in online book sales, and allowed the acquisition to go ahead.

Amazon does seem unstoppable and many suspect they have used low prices as a tool to drive their competitors out of business. Of course books were just a starting-point and the internet retailer now trades in many other areas, establishing dominance on the web in many countries.

Perhaps Amazon may just now be showing the beginning of a change to rather higher prices on books, ebook and print, now that bricks and mortar bookshops are on the run. It may be too early to tell if this is a real change of policy forced on Amazon by the need to start making a profit, but in any case the damage to the book trade has been done. Book prices are very much lower and in general books are much more highly discounted than in the past. Consumers expect books to be cheaper than they can be and this is making it difficult for other booksellers, publishers and authors to make any money out of books. Amazon is forcing the pace and insisting on high discounts, and publishers have no choice, they have to give the discount demanded.