Skip to comments.The DOJ's Mugging Of Apple Reminds Us That Antitrust Is Theft
Posted on 04/19/2012 7:30:51 PM PDT by Publius6961
The DOJ's Mugging Of Apple Reminds Us That Antitrust Is Theft
The government should not interfere in any pricing or offering, even if a company outright colludes with competitors to set a price. Market participants have a right to offer their goods and services at whatever price they wish, and they should be free to determine that price however they wish. Some sort of twisted resentment at companies for deliberately trying to get the most money from a deal is not a valid basis for outlawing their activity. No one is forcing anyone to buy their products. Those who do not like how a company operates are free to walk away from its products....
It is time to formally reject the concept of antitrust and to put the repeal of the Sherman Antitrust Act of 1890 on the legislative agenda.
(Excerpt) Read more at forbes.com ...
(reserving further comments for later)
One of the purposes of Anti-Trust Laws is to prevent companies from becoming “Too Big to Fail”.
Or, should you be able to just shut the water off and close for a month?
This is the classic argument.
However, private utilities most often have been granted exclusive franchise and all the obligations that come with that.
Now, a real-life scenario: Gasoline.
Should it be legal for oil companies to collude on the price of a gallon of gas...and raise that to $10/gal overnight...nationwide...and without notice?
I answer: YES!
I am always amazed by those who attempt to defend monopolistic practices, not understanding that a private company with monopolistic power is just as great a threat to individual liberty as a government is. The economic argument for regulating monopolies started with the first exponent of free market economics, Adam Smith, because once you understand market forces and pricing, the economic debility caused by monopolistic power it too easily understood. Those who don't understand it, simply never passed economics 1.
Nothing about anyone's local utility immediately invokes the notion of genius. Rather it is monopoly power enabling voracious incompetence at the expense of everyone who can do nothing about the slow sapping of our economic life by those who have a stranglehold on the lever's of production.
Not that I totally agree with the original post, but if a private company had a monopoly in a free market economy economic forces would make that monopoly very short lived. Competitors would spring up like weeds!
The problem with what Apple and the publishers did is that they did away with the long standing idea of wholesale pricing.
Amazon was paying a wholesale price for e-books and charging what they wanted to charge. i.e. They were paying a set price for the books and charging whatever price they wished. In some cases, it was below the wholesale price and they were losing money in an attempt to gain market share.
Apple worked with the publishers to make sure that there was a model where they all made money and consumers couldn’t get the product at a discount. Instead of the traditional practice of selling at a wholesale price and allowing retailers (Apple, Amazon, etc.) to set the retail price, the publishers set the retail price and gave retailers a set percentage of the cover.
They were colluding to shut out a lower-cost competitor at the expense of consumers.
You can make the argument that Amazon was trying to build a monopoly by driving out others in the e-book market.
The argument should be about whether publishers have a right to set a price and refuse to allow retailers to discount their products.
We already see it with other Apple products — try to get an iPad at a discount...
If this is true: “ - - - - The government should not interfere in any pricing or offering, - - - “, then what the HELL is “The Government” doing by coming up with Obama”care.”
On Holders bite of the Apple: Obama did invite Steve Jobs’ widow to the 2012 State of the Union speech.
Obama made it clear to her in his speech that he (Obama) would be “going after” US companies who had employees overseas.
BTW, since Obama is a Marxist, I’m sure that invitation/attack on grieving Mrs. Jobs made perfect sense to him - - - . The end justifies the means, or just mean, bad manners.
Does Obama REALLY hate women that much?
Personally, I say “bravo”.
Rhetorical question - of course not.
Antitrust enforcement has devolved into nothing more than a shake-down machine. The nadir was reached under Clinton (who else) with Pitofsky and Klein at the FTC and DoJ routinely extracting a Beltway tax on all major mergers.
Recall that Microsoft were spending less than $1m a year on lobbyists until Larry Ellison paid for an antitrust hit on them.
FTC, DoJ, FCC, EPA, FDA,..., smash them all and start over.
Disagreeing with the author.
Congress has the constitutional authority to grant limited monopolies to innovators in the form of intellectual property rights such as patents and copyright protection. These rights are further secured through treaties for international trade. These legal monopolies reward innovation. Other legal monopolies can exist through protecting competitive innovations as trade secrets and also by just generally being the best.
Large corporations sometimes circumvent laws in this area in order to gain a monopolistic advantage because their leaders think they can get away with it.
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Publius? In what way were five publishing companies out of over 2000 and a retailer with less than 4% of the retail ebook market a monopoly?
Amazon, with 90% of the eBook sales was DICTATING to all the eBook publishers what the wholesale price of eBooks was going to be, and what the retail price would beregardless of size, graphics (and royalties for said included graphics), word/page count, editing costs, publicity costs, or any other costs associated with the production of that eBookdigital copies of best-sellers would be sold on Amazon for $9.99 regardless of the selling price of their hardback bound and paper bound versions!
Amazon's was the TRUE price fixing monopoly!
Even after the introduction of the Agency model of eBook sales, Amazon has a whopping 60% of the eBook market... yet THEY filed the complaint that resulted in the anti-trust action against Apple and five publishers who participate in Agency pricing, which Amazon benefits from! It is just that Amazon no longer has a 90% monopoly of eBooks... and a whopping profit margin on eBooks, dictated by their overwhelming market force!
A digital product does NOT lend itself well to the wholesale model of sale, like a hard copy of a book. There IS NO INVENTORY to sell... no hard product to ship, store, sell, and send to a retail customer. No product for a jobber or retailer to purchase, stock, shelve, display, and resell to an end user. A digital product is an intangible... and is more suitable to be sold in an Agency model.
There is obviously room in the market for BOTH models... but that did not suit Amazon. They were pissed that their monopoly was broken! So they complained to the FEDS... They want their model back... the one that was breaking the backs of the publishers and the authors and allowing one big player to dictate the price of all best selling eBooks.
Presumably, the author of this gem of understanding, Wendy Milling,did pass Econ 101; else she wouldn't have the chutzpah to write such a criminally in-your-face screed.
I've been a publisher. As for your arrogant and RUDE first question, I have answered it TOO MANY TIMES to repeat the answer again! Every one of the 540 members of the Apple/Mac/iPhone/iOS Ping list already knows the answer. GIVE IT A REST!
Swordmaker, I will not answer your silly questions until you stop throwing out incomplete "facts" pulled out of some intestinal outlet, and start documenting them with neutral source references. That is, e.g. what five publishers? What is their market share of fiction? non fiction?
Why are some paper books several dollars higher than the ebook editions?
The present market share of the co-conspirator (and mastermind) of the scam is irrelevant, if Apple devises a circumvention to prevent all other present and future retailers, regardless of size, and obligates those five publishers to not negotiate contracts, ever, that might put Apple at a disadvantage. That walks like a duck, quacks like a duck, etc. Collusion and price-fixing by any other names.
If your "facts" are actually complete and true, why hasn't Amazon been sued by anyone? If Steve Jobs thought Amazon was violating any law, why the subterfuge and games to attempt to control not only Amazon, but also future competition by illegal means?
Try some new arguments. Those are getting stale, and make no sense at all.
Oh yes. Are you a shill for Apple? Forbes? Cnet? a publisher? A fanatic Applebot? What?
Since I don't visit gay sites, and had never seen a direct response to me before, I appreciate the direct response.
But sorry, no, I won't give it a rest.
Suck it up.
Incidentally, MY degree is in economics. Wendy Milling is right. It is amazing to me how people who claim to be capitalists, conservatives, and people who espouse Free Markets don't understand the principles of those very concepts. . . and embrace bureaucratic interference in the operation of the Free Market forces that allow them to work! That is what this author is talking about! You guys might as well be centralized power Democrats!
The Anti-trust laws came about because of excesses of Government involvement with business in the first place... the granting of privileges and contracts that should never have been granted.,. because of crony capitalism. The OVER-REACHING of centralized government doing what was never authorized in our Constitution.