Antitrust experts: Apple likely to beat U.S. DOJ, win its eBook lawsuit

“The U.S. Justice Department’s legal pursuit of Apple for alleged e-book price fixing stretches the boundaries of antitrust law and is likely to end in defeat,” Declan McCullagh and Greg Sandoval report for CNET.

“That’s what happened in 1982, when an embarrassed Justice Department admitted its antitrust lawsuit against IBM was ‘without merit’ and abandoned the case,” McCullagh and Sandoval report. “And in 2001, a federal appeals court nixed the Justice Department’s ambitious attempt to rewrite antitrust law by carving Microsoft into two separate companies.”

McCullagh and Sandoval report, “‘It’s a harder case against Apple than the publishers,’ says Geoffrey Manne, who teaches antitrust law at the Lewis and Clark Law School in Oregon and runs the International Center for Law and Economics… The Department of Justice ‘has a far better case against the publishers than Apple,’ says Dominick Armentano, professor emeritus of economics at the University of Hartford and author of Antitrust and Monopoly who’s now affiliated with the Independent Institute in Oakland, Calif. ‘If the CEOs of the various publishers got together in hotel rooms to discuss prices, they are sunk’ and might as well settle, he says.”

Read more in the full article here.

MacDailyNews Take: While we’re totally in favor of the mentally challenged having gainful employment, we believe that, going forward, the position of U.S. Attorney General should be exempted.

Related articles:
Why the market shrugged off the Apple antitrust suit – April 11, 2012
What’s wrong with the U.S. DOJ? – April 11, 2012
Macmillan CEO blasts U.S. DOJ; gov’t on verge of killing real competition for appearance of competition – April 11, 2012
U.S. DOJ hits Apple,major publishers with antitrust lawsuit, alleges collusion on eBook prices – April 11, 2012
U.S. DOJ may sue Apple over ebook price-fixing as early as today, sources say – April 11, 2012

29 Comments

  1. People are asking the wrong question here.

    Amazon brags how they will be able to lower the prices of books because if this, but Amazon does not make any books, they are a reseller. I do not care if Amazon is happy. I want the people actually making books to be able to make a profit so they can continue to make books.

    The question is, how do we ensure that making books is profitable so that they continue to be produced?

    Without answering that question seriously, nothing else matters.

    1. That is the correct question.

      Amazon is able to sell books for less than it pays only by charging more for other goods. In effect, if you buy a watch or pair of shoes from Amazon, you are probably subsidizing a $10.00 e-book sale. Why would you want to do that? Why would Amazon want to sell e-books at a loss? What are they up to with that?

      1. I don’t like Obama and I hope he loses the election.

        That said, there’s no need to disrespect the office of the presidency and especially no judtification for racist statements like monkey boy.

        I hope Obama enjoys his time out of office and I wish him the best and thank him for his time of service and I hope the next president returns the country to a level of fiscal sanity that is sustainable and ensures a thriving country for my children and their children.

        1. Be careful what you wish for. You just might get it. Romney made his billions by dismantling American companies and putting people out of work. How much of that kind of leadership can we take?

          1. Not true. What his company actually DID do was dismantle FAILING and POORLY RUN companies, and even then – only of that was the best option. In most cases, they figured out ways to make the companies in question run more efficiently be reorganizing them, thereby making them STRONGER.

            That’s a GOOD thing. Idiot.

            1. Coming from a place that the Romneys of the world destroyed, leaving nothing but derelict factories and keeping only the nameplate of the brand, with an added “Made In China” sticker, I call BS.

              You, Sir, are an apologist for the rapists and charlatans that have destroyed the working people of this country. It was always bad management that was the excuse for this type of raid, never poor workmanship or lack of dedication from the workers. Good hair and a shiny smile can never hide the deeds of a black heart.

        2. The office of the Presidency was disrespected the day that mortard rose his hand…….and began the trail of lies, half truths and outright disregard for this country.

  2. Actually there are 2 lawsuits.
    1- DoJ and 3 companies have already settled after the filing, essentially nolo contendre. Not so good for Apple & for you right wingers, one of the companies settling was News Corp (HarperCollins)- parent of Faux Newz.
    2- A multi-state lawsuit led by Texas- a noted hotbed of liberalism (LOL).

    Apple will settle or lose. The RDF lies buried in Palo Alto.

    1. The agency model provids authors and publishers with an alternative to Amazon’s abysmal, record company-like sales contracts. If you want your ebooks on amazon you’ll take 5 cents on the retail dollar in sales. As long as Amazon is effectively the only game in town it can set its own price, control its own costs, decide what level of promotion an ebook gets, and reap the majority of the profits.

      The agency model offers sales, promotion, and other overhead at a fixed percentage of the price set by the publisher, not Apple. It opens up the ebook sales industry in the same way that Apple opened up the music sales industry. If the DOJ prevails in this suit it will mean that Amazon’s monopoly will survive, and that the system is indeed corrupt.

    2. Understand one thing in a court of law…
      Settling Does not mean Guilt.!

      Only an uneducated idiot would use that as proof of guilt.

      It’s easier to Settle then to fight, the cost is amazing and if you don’t have the cash to fight you tuck tail and give up even if your not guilty. The System at work, it’s far from perfect.

      Big deal with Texas and the other states, it’s all civil just a money grab, and an added bonus for all that think that all these cases tie together and help each other showing more guilt,

      THEY WON’T.

      GOT IT NOW.

    3. 3 publishers settled; the accusations against Apple are the odd man out. Even if the publishers colluded, it doesn’t necessarily mean Apple was a party to it.

      Apple uses the same 30-70 revenue split for its e-books that it uses for it apps, the App Store and its in-app purchases. The fact that Apple’s existing model may have allowed publishers to charge more for e-books is irrelevant.

      The multi-state lawsuit is an opportunistic pile-on. Nothing to see there.

      As cute as it is to write “RDF” about anything relating to Apple, it has nothing to do with it.

  3. Fact is, Apple didn’t have a monopoly position at the time the agency model was offered to the publishers. Unless they can show proof that the publishers met and fixed the price for ebooks, they don’t have a case.

    Apple simply made the condition that if you want to sell thru us, you can’t offer the goods elsewhere for less. That’s only fair, since the publishers are not forced to sell thru Apple and can set the price to anything hey want.

    IT’S CALLED FREE MARKET, you dimwits at the DoJerks.

    1. “Apple simply made the condition that if you want to sell thru us, you can’t offer the goods elsewhere for less”

      That’s not what they said. They said if you sell the books elsewhere for less, then we have the right to lower our prices as well.

      That’s a huge difference. Your wording (and most others) makes it seem like Apple was telling the publishers what they can and can’t do, when in fact, all Apple was doing was making sure they have an option.

    2. This is the DoJ and the same Eric Holder who engineered and encouraged illegal sales of guns to Mexican drug cartels (resulting in the death of American border patrol agents) in the hopes of then pointing to an increase in violence along the border as a justification for a reinstitution of the assault weapons ban and the institution of other new restrictive gun laws. It’s called “working under the radar” by the president.

    3. One doesn’t have to have a monopoly position to be in restraint of trade. Apple may or may not be complicit in this, but from reading the full text of the complaint, the publishers may have something to worry about. If Apple can show it only wanted the publishers to set their own prices (as the agency model allows) so they can take their 30% ==> good. But if they were more active in getting all of the publishers to agree ==> maybe not so good.

  4. Yes everything is the doing of Obama. Mitt will fix it soon. By this time next year the budget will be balanced, we will pay no taxes, we will have bombed Iran into the last century and women will know thier place. Polygamy will be legal and gays will be sent to correctio facilities in Utah. Democrats will be sent to Russia, including those liberals at Apple. All will be wonderful.

    1. … Or we can continue on the same path of spending and uncontrollable deficits and there will be the North American version of Greece.

      Either side of the political spectrum, you have to agree this case is flimsy and seems like a money grab. (civil suit, not criminal)

      1. Yes XR you are right. We never had deficits before Obama. We paid for our wars and tax cuts as we went and had huge surplus under under Bush. When Mitt gets in we will conquer China, we will all have six house, bank accounts in the Caymens and Switzerland. Best of all we will all be baptized Mormon and when we die we will each rule our own planet. Free magic under ware too. Salt Lake City will be our Vatican. I cannot wait.

  5. It seems to me that we’re seeing an application of Chicago politics here.

    “This is a nice business you have going here. It would be a shame if something happened to it, maybe a fire. We can offer you some protection. Give us some money and nothing will happen to your shop.”

    Perhaps the administration is simply trying to show Apple that, for a campaign contribution, they can make Apple’s business a lot easier and safer. Chicago politics at it’s best, executed by the highest office in the land.

  6. This case has a political taint to it. It’s election time and the Obama administration is trying to create a constituency in which they would claim it is fighting for. After colluding with the banking and oil industries big bosses to rape the country and tank the economy with the DoJ doing nothing, the Obama administration is trying to show that it is fighting for the little people, i.e. the reading public. Such is the nature of the political beast.

    And as for the Attorney General, he is pursuing the case at cross purpose. This is a stepping stone for any ambitious AG as a short-cut to catapult into the political limelight. Past cases have shown time and time again that ambitious AGs have been willing to be blindsided by political ambitions to subvert the course of justice for personal agenda. Anything that has to do with Apple nowadays is guaranteed to generate intense attention.

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