Apple Fires Back At Amazon For Acting Like Apple
On Thursday, two days after the Justice Department launched a lawsuit against Apple and various big book publishers for alledations of ebook price fixing, the tech company have responded saying they have done nothing wrong, and slammed Amazon for their "monopolistic grip" on the market at the same time.
Hypocritical? Yes.
The comment made to the press by Apple spokesperson Tom Neumayr goes as so:
The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.
Taking you back to the early days of the digital music era, when Apple would very much dictate and control the pricing within this space. Granted it was to combat record labels' attempts to send the prices sky high; but it's still the creation of a monopoly, something that they're now completely against now Amazon's doing as so in the publishing industry.
Of course, the situations are different, with Apple negotiating with major record companies to keep the fixed price of 99 cents per track, giving the labels roundabout 70% of the proceeds and keeping the rest as commission. Very much on the same lines as the "agency pricing" model that Apple worked out with ebook publishers, which also put the control of pricing in the hands of the publishers.
Amazon took the ebook download market in a rather different fashion, with a wholesale price paid to publisher for x amount of copies of the book, then charging whatever it desired in the Kindle store. As the description would suggest, this was very much a "wholesale pricing" model, used in most 'bricks and mortar' stores today. The key difference being (obviously) that it was online, and the price that Amazon usually applied to its stock of books ($9.99) was argued by publishers to be too low.
Regardless of the nitty gritty of differences, Apple's intentions of regulation were the same as Amazon's are in their respective industries, and I don't think they're the kind of company in the position to complain about this sort of 'foul play.'
The pricing of consumption media such as music, books, games and films shouldn't be left in the hands of the store, or the creator by that measurement, because it's a strong likelihood that we'll always see this situation going forward. What should be the solution? I'm not sure. A central body to be a 'third party' to debates, ensuring that markets can remain focussed on a competition of innovation rather than one of price-related market takeover? Maybe.
