Price fixing allegations aren't anything new; investors can usually count on seeing a few threats lobbed at this or that industry every year. What's unusual in this case is that a form of digital media, often seen as the dragon slayer of entrenched controlled prices, is in the center of the fight. What's even more unusual is that Apple, a company often credited for spot-on sense of its customers' sentiments, is involved as well.
A Warning Shot from the DOJ
The U.S. Department of Justice has recently warned Apple, as well as five traditional large publishing houses, that it intends to pursue a suit alleging antitrust/price-fixing behavior in the e-book market.
What this case ultimately boils down to is the allegation that these companies have essentially forced Amazon and other retailers to raise their prices on e-books. While Amazon has generally preferred to use a wholesale pricing model (where it decides the final price and the margin it wants), publishers have forced the company in many cases to adopt an agency model - a model where the publishers set the price and give a fixed percentage over to the retailer.
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