Apple price-fixing case will helps books and ebooks and readers in ways people don’t realize yet

In the wake of Apple being found guilty of conspiring with Publishers to fix ebook prices, people are reacting in very emotion-driven ways.

How could the Judge find Apple guilty? How could the Judge make things easier for Amazon? What will save us from Amazon now? Does this really help customers?

People are reacting so strongly that this story is the #1 story on both Techmeme and Mediagazer.

It’s interesting to see most people miss the point completely -

  1. Apple eBook Ruling doesn’t do much for consumers.
  2. For Consumers, not much changes. For Apple, a lot could.
  3. Forbes find it hard to believe Apple is wrong – Did Apple conspire to raise prices?
  4. David Streitfeld at NY Times – E-Book Ruling gives Amazon an Advantage.

Let’s look at what this ruling REALLY does.

Precedent

This court verdict, especially if upheld on appeal, establishes precedent.

  1. Any group of powerful companies, when trying similar things in future, will know that they are going to get slapped. Particularly true in books and ebooks and Publishing.
  2. Precedent that doing something wrong will probably get you punished.
  3. Precedent that any company (group of companies) that causes prices to go up 30% or more for consumers, illegally, will get brought to justice.
  4. Precedent that even a media darling company like Apple can’t bypass Justice. If you read some of the Press’ articles it’s just disappointing to see them use weak strategy like ‘Amazon shouted and screamed in meetings’ to try and get Apple off the hook. Precedent that all the media could be your dumb brainwashed little lapdogs and you’ll still get brought to justice. This is a very big deal.
  5. Precedent that you can’t fool all of the people all of the time.

You can paint any picture you like. The bottom-line is that Apple and Publishers introduced the Agency Model and caused tens of millions of readers to either pay higher prices or wait for 6 to 12 months. That’s just not the right thing to do. What kind of parent raises their kids to do things like that? Seriously – would you raise your kids to exploit other people in that way? To take away a book they were dying to read for 6 to 12 months, unless they paid an exorbitant price for it?

Readers are the people who pay for EVERYTHING. To mistreat them like this is just wrong.

Note: Most companies, including Amazon, have their own little ‘we’re too big for our breeches’ episodes. That’s why it’s important to show that no company, no matter how big and powerful, can get away with doing wrong things.

Creative Destruction and Ensuring Progress

What Apple and Publishers were trying to do, and what now Amazon is trying to do, is stop the Creative Destruction that is happening in Publishing.

It’s inevitable. The existing gatekeepers will fall. Then the new gatekeepers, so happy to seize the opportunity that they don’t see the barbarians at the gate, will fall.

If we let Apple and Publishers get away with it, then it makes Amazon and the new gatekeepers feel they can get away with it too. Now, they know they might get caught. They will still try. However, we have PRECEDENT and we have punishments.

The second great revolution in publishing is not going to end with one gatekeeper replacing another. It’s going to end when gatekeepers are replaced by servants. Servants who serve authors and readers instead of lording over them.

The Court’s decision ensures that some of the obstacles slowing down the much-needed creative destruction are struck down. More importantly, it ensures that the people busy setting up new obstacles think ten times before doing evil.

Room for New Players

Who’s going to take books and publishing forward?

  1. Publishers and Apple, who want to pretend we’re in the paperbook world.
  2. Amazon, who wants to pretend that we’re in the paperbook world with Publishers replaced by Amazon.
  3. Readers and Authors.
  4. New Players that serve Readers and Authors.

Only 3 and 4 are actually interested in progress.

The dream situation for Publishers is for eBooks to suddenly stop growing or die out. The dream situation for Amazon is for eBooks to replace books but within Amazon’s closed ecosystem.

Readers, Authors, New players – they all want a new system. They will get it.

Why? Because attempts by the existing gatekeepers and attempts by the self-anointed rising gatekeepers, to impede progress -

A) Will only delay the inevitable.

B) Will lead to court decisions like this one, and give the guilty parties the double slap of public shaming and destruction of their strategy.

The number and types of moats that can be built to protect the existing castles and fortifications just got reduced drastically.

Consumer Focus

What won the case?

The fact that the HARD FACTS showed that prices went up due to Apple’s efforts. That this was bad for consumers.

At the very least, this ensures that future meddlers and scum, who try similar tactics, will try to minimize damage to customers when they try to corner the market.

That can only be good for readers. If all the players involved are painfully aware that any exploitation or abuse of readers/customers will lead to eventual justice.

Better shot for Indie Authors

If companies had the option to just make indie authors disappear, they would.

Now, any attempts to hinder/hide/handicap indie authors will be rethought. Because if these methods get found out, and it can be shown that it led to higher book prices for readers, then it’s the exact same mess that Apple got into.

You can bet a lot of emails are getting deleted at various eBook platform companies regarding handicaps and boosts and pricing methodologies that are not pro-customer.

No company will want trouble of the sort Apple has gotten into. At best, they will stop their meddling with indie author rankings. At worst, they will use even more subtle, hard to track methods – these, in turn, will perhaps be less effective.

This ruling HURTS Amazon, not helps it

Why could Apple and Publishers pull off the Agency Model? Because they had the power. This is the KEY thing everyone is missing. Without power you can’t do much abuse.

What company has the most power now? Amazon.

So, the company most likely to abuse power is Amazon, not anyone else.

If the Court and the Judge clearly indicate that they will not stand for abuse of power that hurts consumers, then Amazon is going to be wary. What damage can Apple do in books now? Not very much. Amazon, on the other hand can cause lots of problems. This ruling serves as a strong warning to them to not abuse their power too much.

This ruling is a warning to Tech Companies that try to prostitute users and their rights

You could bet $1 million dollars that in dozens, if not hundreds, of companies’ boardrooms, this ruling is being discussed and has served as a warning.

If you do things that hurt consumers’ best interests, then you might be brought to justice. All these companies know that they aren’t the media’s darlings, or America’s Favorite Tech Company that makes everything in China, or the company that made thousands of people rich via its stock (well, up to $700 it did).

If Apple can get hammered, then so can they.

In Summary – It’s about the Future of Books

This isn’t about allegiance to a company, wariness of another company, or about looking out for your own selfish best interests.

It’s about what THE RIGHT THING TO DO is.

What’s the right thing for readers? What’s the right thing for authors? What’s the right thing for the future of books?

District Judge Denise Cote has ruled in favor of doing the RIGHT thing for Readers and Authors. Every few years, there’ll be a company that has power in books, and tries to exploit readers and/or authors for its own selfish interests. It’s up to readers and authors and the DOJ and the Judicial system (which might be our only hope) to fight against this. Only the powerful can prevent abuse of power. Only readers and authors and the judicial system can protect the future of books and reading and readers and authors.

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