The Morning Coffee – 3 February 2014

Top stories this morning include a couple satirical articles from The Onion and NewsBiscuit, a new damages claim in the antitrust suit against Apple (link), Author Solutions's latest front company(link), a (possibly fictional) report from a company that found it cheaper to give their customers new computers rather than support IE7 (link), a fascinating look at one way website owners can defraud advertisers (link), and more.

  • Amazon pulls pop-up book following Kindle disasters (NewsBiscuit)
  • Don't Confuse Independent Publishing with Self-Publishing (Author U)
  • Crowd-Frauding: Why the Internet is Fake (Go To Hellman)
  • It’s a lot easier to say you want to move from print-first to digital-first than it is to actually do it — (GigaOm)
  • Lawyer Wants Apple to Cough Up $840 Million in E-Books Case (Re/code)
  • PublishAmerica | New sock puppet America Star Books formed (TeleRead)
  • Success Story: 8 Hints From The Publisher Who Said No To Amazon (Forbes)
  • Supporting Internet Explorer 7 Is Absurdly Expensive (UPROXX)
  • Top Tech Gadgets Of 2013 (The Onion)

This Monday morning finds me in Phoenix, Arizona for FlexTech 2014. If you happen to be at the conference, look me up. I have a Toq smartwatch with me; how would you like to see Qualcomm's latest Mirasol screen tech?

About Nate Hoffelder (11594 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

4 Comments on The Morning Coffee – 3 February 2014

  1. Concerning the Apple anti-trust suit, we now see at least part of the reason this all went down. Salon was right, and Steve Berman saw Apple as a perfect deep pocketed target to go after and get triple damages. It’s not surprising all the dozens of state attorney generals went along to get a piece of the action, regardless of the merits of the case.

    None of this is proof anyone was whispering in the Department of Justices ears to get them to file the original complaint, or if they used any improper influence. Nor does it prove that Amazon might have whispered in Steve Berman’s ears about the matter, or covertly supported him.

    But it’s certainly plausible. If Amazon was concerned about Apple’s entry into the ebook field, Berman was a good person to call.

    • So you’re saying that hundreds of lawyers in 50 states and the DOJ participated in a 2 year long investigation and followed it up with a fraudulent prosecution?

      I think it’s far more plausible that Apple was part of the conspiracy. That is certainly what Steve Jobs seems to have said to his biographer:

      Amazon screwed it up. It paid the wholesale price for some books, but started selling them below cost at $9.99. The publishers hated that — they thought it would trash their ability to sell hardcover books at $28. So before Apple even got on the scene, some booksellers were starting to withhold books from Amazon. So we told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.’ But we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too. So they went to Amazon and said, ‘You’re going to sign an agency contract or we’re not going to give you the books.’

      Jobs basically described a quid pro quo where Apple got what they wanted (lack of price competition) and publishers got what they wanted (higher prices). If that’s not collusion I’ll eat my hat.

      And remember, forcing Amazon to switch to agency is not something one publisher could do on their own. Amazon would likely retaliate. Everyone knew that, so Apple had to have known that the publishers would collude to pressure Amazon.

  2. A prosecution can be politically motivated, and still legal. It can be motivated by behind the scenes business grudges, and still be legal. It can be motivated by a money seeking class action lawyer, and still be legal. And yes, lawyers in 50 states can be motivated by getting a piece of a bleeding whale and it’s still legal.

    Likewise, Steve Jobs can talk about making a deal with publishers that sounds like collusion, and it can still be legal. There are lots of grey areas.

    In the end the courts will decide and it is my belief Apple will win this if they go the distance.

    The larger issue is that anti-trust laws are rarely enforced in the United States. There are massive problems with consolation in retail, banking, auto dealerships, commodities, etc. The US government almost always looks the other way, even when there is clear harm to consumers.

    I simply don’t believe there was any harm to consumers in Apple’s deal with the publishers. I also believe there was a huge benefit to self-publishers because of Apple’s entry into the marketplace. That benefit has been muted because of this lawsuit.

    Long term, allowing Amazon to sell books at below market prices to control the market will probably be back for customers, back for self-publishers and yes, bad for publishers. It is a win for Amazon, however. That is the real anti-trust issue that has been ignored.

    Which brings us back to why the DOJ decided to jump into an emerging market and enforce laws that are rarely enforced, let alone enforced in the way they are doing. And by doing so, hurt competition, rather than supporting it.

    If I open a restaurant across the street from another restaurant with City Hall ties, if health inspectors start constantly fining my place for minor violations they don’t enforce on the restaurant across the street, and if cops start giving my customers tickets for jaywalking when they never did before, it’s reasonable to think there might be some political payback going on.

    That’s what I believe is happening in the Apple case. This may not be a fraudulent prosecution, there may be some little legal justification, but given the complete circumstances, I find it impossible to believe this was just the DOJ doing business as usual. Because business as usual is to ignore anti-trust issues.

    And I personally care about this because I think lack of competition is a really bad thing in the ebook world, and I think this decision, if it stands, harms competition.

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