U.S. v. Apple: If what Amazon did was lawful, why isn’t Apple’s behavior also lawful?

In the U.S. Department of Justice’s case against Apple alleging e-book “price-fixing,” Amazon, whose complaints are believed to have initiated the case, took the stand on Wednesday.

Amazon demanded from publishers “the very same agency terms that Apple demanded and that the government decries as components of an Apple-led conspiracy: A 30 percent commission on e-book sales, pricing tiers and caps, and, yes, a Most Favored Nation clause,” John Paczkowski reports for AllThingsD. “In fact, according to documents shown in court Wednesday — documents that Amazon fought aggressively to keep out of the public eye — the company’s MFN’s were at times even more favorable to its business than Apple’s.”

“What’s more, during cross-examination Wednesday, Russ Grandinetti, vice president of Kindle Content at Amazon, acknowledged that the retailer adopted those terms specifically to protect its legitimate business interests. He noted that Amazon wanted to make sure it had a ‘level playing field’ with other retailers. Like Apple, Amazon didn’t want to be disadvantaged competitively in the e-books space,” Paczkowski reports. “If that’s a reasonable view, one that’s in Amazon’s own lawful, business interests, why isn’t Apple’s behavior also lawful?”

Read more in the full article here.

Related articles:
Apple says differences in publisher deals disprove U.S. DOJ’s e-book conspiracy allegation – June 5, 2013
U.S. v. Apple iBookstore case could go to the Supreme Court – June 5, 2013
Apple accuses DOJ of unfairly twisting Steve Jobs’ words in e-book case – June 4, 2013
U.S. DOJ prosecutors accuse Apple of driving up e-book prices – June 3, 2013
U.S. v. Apple goes to trial; DOJ claims e-book price-fixing conspiracy with Apple as ringmaster – June 3, 2013
U.S. DOJ takes Apple to trial alleging e-book price-fixing – June 2, 2013
In pretrial view, judge says leaning toward U.S. DOJ over Apple in e-books case – May 24, 2013

29 Comments

      1. Well, oil companies and pharmaceutical companies get away with stuff all the time…

        this stupid false claim is another waste of our time…

        we bail out the housing and bank industries… the U.S. Govt owes us money…

  1. With every passing day, the DOJ’s case seems weaker and weaker. The judge should simply dismiss the case and ask the DOJ to pay apple’s legal expenses.

    1. Don’t forget, the way it “seems” to mortals is likely quite different than it appears to those of our upper echelons, in the halls of justice, where money speaks volumes. It is apparent to me that if Samsung can prevail with the ITC, then the DOJ will succeed in their attempt to bring down the greatest company to hail from the once great US of A. Mr. Bezos and company will pay through the nose for the win, but win they will.

      1. Money does not speak volumes. The judges work off of information and legal points brought up by the attorneys. The only way money affects the system is that people or companies with money can hire better attorneys, pay them more to do more research and explore additional legal claims, and basically fight harder for their clients.

        This is the same tired argument about why there is a higher conviction rate among poor people represented by a public defender over wealthier people who have their own attorneys. It’s not that public defenders aren’t good attorneys, it’s simply that the public defender is seriously overworked and does not have the financial resources to hire a bunch of experts, have evidence examined by specialists, hire private investigators, do hours and weeks of research looking for a needle in a haystack.

        Apple has this luxury, and this is probably a very good case for Apple to defend itself against. The DOJ certainly has resources, but Apple can pay attorneys and specialists all day long to find legal reasons in a very complex legal field as to why Apple did nothing wrong. All it has to do then is poke holes in the DOJ’s case and convince the judge that the DOJ can’t prove what Apple did was antitrust (which is already difficult to prove).

  2. It’s pretty obvious: you’ve got five huge publishing conglomerates who collectively form a near monopoly, going to a huge computer company and conspiring to shut out competition. It’s the same abuse of power that railroad, steel, and other industries used to bully around smaller companies back in the 19th century. They didn’t call them ‘railroad barons’ for nothing!

    1. Nobody conspired to shut out competition. If anything, Amazon does that by demanding ultra-low book pricing and using its non-brick and mortar business model to drive its competition under. Borders is gone already, and Barnes and Noble is barely holding on.

      Apple tried to set up a different model from Amazon, but not a new strange model. The agency method has been around for a long, long time, and once Amazon found out that is what Apple was doing, Amazon tried to do the same thing.

      Plus, it’s very difficult to state that Apple was in a position of power. Amazon is clearly the leader in e-book sales, particularly at the time Apple was looking to get into the field. So it’s near impossible for Apple to have abused its alleged position of power when it didn’t have a toe in the water.

    2. #Renaldo … the term was “Robber Barons”.

      Your analogy is not entirely accurate … Apple wasn’t trying to shut out other competitors, they were trying to become a competitor and were trying to negotiate terms and conditions that fit their business model.

  3. COLLUSION COLLUSION COLLUSION. I will keep repeating like a broken record that because Apple charged more for its gorgeous ebooks on its iBookstore than Amazon did for its pathetic Kindle readers that there must have been collusion because you know that’s all that matters right? That’s the only evidence I can provide for price fixing. Or could it be that the publishers were tired of making ZERO money with the Amazon that they were willing to risk their relationship with Amazon to push for fair prices. Free trade doesn’t just apply to the demand side. It also applies to the supply side. Suppliers should also get a fair shake. The suppliers in this case, publishers, finally had another viable market in the iBookstore and were finally given an opportunity to make a profit. That more than anything is damning towards Amazon because it says they were pricing the ebooks so low that the publishers were willing to give up that business to make what at the time was an unknown profit with a nascent market on the iBookstore. As you can tell from my previous posts that I don’t know shit about the agency model of pricing and the MFN status does not necessarily imply collusion. But because of uniform pricing after Apple entered the market, I’m gonna yell collusion from the rooftops because there are no other factors to take into consideration right? But I get it Amazon spends 10x as much in lobbying to smell like roses in this case, but what do I know. You should be able to tell from all my previous posts that I’ve got a PHD (Pecker Head Degree) in Economics. Don’t you see It’s black and white in my world. I look at one fact and that’s it. Higher prices=collussion. sfgh=nsfw (not safe for the world). Btw, I like to give head.

  4. “why isn’t Apple’s behavior also lawful?” Because it is the 800 lb. gorilla, capture and immolation of which will significantly advance the careers of hotshot regulators.

    1. Hmmm. It does make you wonder why the DOJ is so upset about Apple, which appears to have brought more competition to the book industry than about Amazon, which has severely damaged the book industry, at least in terms of brick and mortar dealers, including local book sellers.

      1. The administration is more interested in confiscating wealth and committing its own crimes than promoting justice. The suit against Apple is a distraction for the public while the government runs amok destroying what remains of a free society.

  5. Apple does not spend enough in lobbying money and one can clearly see the results in the news as other tech companies that are far less ethical do the exact same thing and worse.

    We need reform and transparency in our government. The people are catching on and rather than enslave and misinform them, let’s try to give everyone a fair shake. Google and Verizon are too pally pally with big brother.

  6. This case against Apple is a joke. Nothing in the past 3 or 4 days shows any kind of conspiracy or unlawful acts against anyone. Now Amazon has just topped it off. Which makes Amazon look like more of the agressor than Apple. I think this case should be dropped against Apple and Amazon be put on trial.

  7. I’ve so tired of idiot fanboys posting as me.

    I have PROOF of apple’s price fixing and being a ring leader in this ebook pricing scheme. Contrary of all the reports that the publishers colluded BEFORE apple, I have heard various recordings (posted on the web) concerning Steve Jobs very early plans for ebook dominion.

    recording one:

    Jobs: If what you say is true of what this baby can do, quite soon we’ll be reading stuff like books off the computer!

    Woz: Yep.

    Jobs: I can just see it, thousands of people reading books…

    Woz: You’re the visionary Steve.

    Jobs: Imagine it! if we could get all the big publishers together we could corner the ebook market….

    Woz: Eh, maybe we could finish the Apple II first?

    Jobs: but the DOJ will get on our ass and we’ll..

    Woz: Apple II… ?

    Steve: we’ll make computers the size of books, like little tablets…

    Woz: Bit less Star Trek Steve, Apple II first, ok.. ?

    (recording California 1977 ).

    —–
    see Apple was the initiator and ring master!
    Wait until the Doj lawyers submit that piece of evidence ,,,,

      1. i don’t think you are the real Floom as he was an apple fanboy but whoever you are thanks for the attempt at support

        i am confident of my position
        my evidence of Jobs statement above is irrefutable just like all the other evidence I’ve provided in the last few days
        (I can even provide emails Jobs sent as a grade schooler in 1968 which shows he was already interested in ebooks).

        Definitely apple tried to fix ebook prices. Having a monopoly of ebook sales of 90% Apple was all set up to be able to fix ebooks to its advantage , not to mention the vast control it has over publishers because it also controlled print book distribution for years (unlike Amazon).

        down with apple and all apple fanboys!

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