Antitrust Investigation of E-Book Companies

In contrast to Borders Group, Barnes & Noble which is a leading bookstore in the US recorded an 11% increase in their share value in the past year with the introduction of their e-book reader “Nook”. It is clear that Barnes & Noble were not “Myopic” in their approach and were able to retain and even grow their customers as well as profits by embracing a new product.

The digital books business eliminated the physical books in the store. Barnes & Noble offered a wide range digital platforms to its customers. The digital system was comparable with Window 8 personal computer and tablets. It also worked well with Apple’s product such as iPad, iPhone and other products like Android smartphones and tablets. The firm continued to stay in a competitive advantage position in the marketplace, even though it had to compete with many powerhouses in the same industry such as Waldenbooks and Crown Books. And yet, Barnes & Noble remains on the top of the leading U.S bookstore chains.

The Kindle website (https://kindle.amazon.com/) and the competing Nook website (http://nook.barnesandnoble.com/u) are both trying to get you to do one thing: go digital. Technology is an ever-changing area, and it has somehow made its way into almost every aspect of our lives. Improvements have been made to make it possible to read thousands of books on one device. The only catch? There are multiple companies who are competing for the consumer’s purchase of their version of the device.

The predominant view in the United States is that The Sherman Antitrust Act of 1890 was passed with the intent to protect consumers from inefficient market forms, and predation by large corporations. The specific provisions of the Sherman Act, as well as the later Clayton Act of 1914, prohibit acts that are considered to be anti competitive such as cartels, monopolies, price discrimination, and predatory pricing. Mergers and acquisitions are also individually reviewed to ensure they won 't have an anti competitive effect on the market. We will look at each of these acts to try to determine their actual impact to the consumer. We will also

The first challenge is the concentration in retail market, where the English-Canadian market only has one national bookstore chain, which is Chapters/Indigo. This was not an issue in the past, where in comparison to 1985, there were three national bookstore chains. The concentration in retail markets provides lower prices for consumers, but for competition it implies that there are less traditional bookstores available. One benefit of having a concentration in retail market would be the expression of chain and non-traditional sectors are more of an opportunity for publishers, seeing that retails have expanded the national retail space for books and thus having attracted new customers for books.

Antitrust laws are a collection of laws and regulations, put into place over time, to help govern the competiveness of large corporations. Enforced by the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice (DOJ) (“Antitrust Laws,” 2003), the laws help regulate ethical behavior between businesses to ensure that smaller businesses can compete with the bigger name corporations. Mergers and monopolies come into play and greatly affect how these businesses run. This paper will look at two different instances of possible violated laws and discuss the specifics. The first case deals with a pharmaceutical company, the second two telecommunications companies. One question being answered for both examples is what kind of ethical dilemmas are present. Read on as the cases are examined.

We’re more than a century into the antitrust regulation the system is not yet perfect we still have a long way to go. Here in United States of America in 2014, we continue to experience the effect of market power. One example is cable services; in the community where I live my local cable company is the only one that offers Internet and cable services by not allowing competition they are able to charge a fixed price much higher than neighboring communities that have other carriers to choose from.

Barnes and Nobles is one of the biggest bookstores that has a brick-and-mortal store concept. In the past they were know as a “big bully” that drove small book stores to close down because of their aggressive tactics to have competetetive advantage over them. Nonetheless, with the evolving circle of technology they have had a hard time in keeping up with the E-book era. In 2014 E-books increased its reader subscription by 28% compared to 23% in 2013. This number will continue increasing because 50% off American’s have access to devices that are either an e-reader or a tablet. B&N changed its business model to adjust to this new setting before it suffered a

The prevalent of e-books creates numerous platforms for the marketplace of books. For example, when Steve Jobs announced the launch of the iPad iBooks, it created an enormous opportunity for publishers.

Barnes & Noble are taking different tacks with regard to agreements with authors agents, and publishers. Amazon is pulling content off the market and padlocking it to their Kindle. In response, Barnes & Noble is refusing to stock Amazon published titles in its brick-and-mortar stores. Barnes & Nobles' investment in the well-received, well-reviewed Nook appears to have been a solid business decision, the ripples of which will continue to be felt for some time. In fact, the Nook is the proverbial finger in the dike as the waters of Amazon continue to threaten the very infrastructure of the publishing business by eroding the relationship between publishers and bricks-and-mortar stores.

It is necessary when looking at this predicament to understand what causes the underlying structure of the conflict. The fact is that the government feels that Apple and the five publishers were trying to create a structure that would cause not only a rise in pricing but a monopoly within the business of selling e-books to readers. Coltri tells us in Alternative Dispute Resolution a Conflict Diagnosis Approach, “We can’t read minds. To respond efficaciously in frequent and often rapid-fire social interaction requires us to understand and predict the thoughts, feelings, attitudes, and behaviors of others,” (Coltri, 2010). This tells us that when the government was in talks with Apple and the publishers, and after the lawsuit was brought against the companies the lawyers knew that some would fall. It proved to be true, three of the publishers settled out of court and gave up on the idea of driving e-book prices higher and causing a strain on the public.

Barnes & Noble, Inc. operates as a content, commerce, and technology company in the United States. It provides access to books, magazines, newspapers, and other content through its multi-channel distribution platform. The company sells its products directly to customers through its bookstores and on barnesandnoble.com. Barnes & Noble conducts its online business through Barnes & Noble.com, one of the Web’s largest e-commerce sites, which also features more than 3 million titles in its eBookstore.  Through Barnes & Noble’s NOOK eReading product offering, customers can buy and read eBooks on the widest range of platforms, including NOOK eBook

The seller of digital textbooks will also be saving money over producing hard copies. 32% of the cost allocated to paper, printing and editorial can be completely eliminated along with 22.4% of costs related to bookstore operations and personnel. Bookstores as we know them could become obsolete or transformed into stores that sell tablets, e-readers and software packages on campus. Publishers or sellers will now be able to tap into a more global market with electronic textbooks as the information can be translated into many languages quickly.

The Amazon Kindle is an e-book reader which you can download readable and audible content into. The most innovative idea of Bezos about the Kindle was the use of the “E Ink” technology to reduce battery consumption and to provide a more legible display. The Amazon Kindle’s successors were the tablets Kindle Fire and Kindle Fire HD. Amazon priced the Kindle Fire with just $199 as a strategy to boost its revenue from content sales. Amazon’s latest example of diversification includes the launch of the Amazon Fire TV in order to compete with Apple TV and Chromecast. Bezos also entered the highly competitive smartphone industry by releasing the Fire Phone in 2014. An economic advantage diversification provides is economies of scope. Economies of scope refer to a reduction in unit cost based on the idea that the total cost of producing two different goods or services together is less than the total cost of producing them separately. Amazon makes use of the distribution side of economies of scope by shipping a wide range of goods together rather than separately. This gives Amazon the chance to negotiate more lucrative deals with freight companies. Geographic

One of the significant drawbacks of e-books is the issue of compatibility. Various researchers argue that most e-books are not compatible with a variety of software. For instance, a book may be readable on a Kindle device and fail to display its contents in a different device due to compatibility issues. This makes it hard for readers to access all books. It also poses a challenge for readers as all software require a constant update. This is also a major inconvenience for readers as the books they purchase an older version of the software may become obsolete over time, and thus, require them to make a new purchase (Lai and Li 458). Notably, as much as the issue of compatibility describes the disadvantage of using an e-book, it presents a benefit of using the traditional books. This is because the reader will never encounter compatibility issues upon purchasing a hard copy book. Such a book can last for a long