E-Book case reminds Apple its biggest enemy isn’t Samsung or Google

“The fight between Apple and the Department of Justice has been a story of overreaching,” Mark Rogowsky writes for Forbes.

“Rather than join publishers in settling with the government over accusations it conspired to fix the prices of e-books, Apple decided to fight in court,” Rogowsky writes. “Of course, the company lost and as a result the government gets to weigh in on punishment for Apple.”

Rogowsky writes, “This time the Department of Justice is doing the overreaching. It recommended Judge Denise Cote not only stop Apple from engaging in the offending behavior that started this mess, but also that the government get to dictate how Apple runs its App Store and iTunes store for years to come. Really?

“Apple should be fined and stopped from doing it again. And then it should be set free to compete,” Rogowsky writes. “Otherwise, the government takes one of the most important competitors in the digital world and hamstrings it. That’s not a win for consumers, it’s a loss for all of us.”

Read more in the full article here.

MacDailyNews Take: Not sure what he means by “of course [Apple] lost” when there was no evidence of Apple colluding with the publihers presented. This decision should be overturned on appeal.

Related articles:
U.S.A. v. Apple: DOJ seeks wide-ranging oversight of iTunes Store – August 2, 2013
Apple rejects U.S. DOJ’s proposed e-book penalties as ‘a draconian and punitive intrusion’ – August 2, 2013
U.S.A. v. Apple: DOJ wants to force Apple to revamp e-book practices – August 2, 2013
U.S.A. v. Apple: Cupertino could get smacked with $500 million bill in ebook case – July 25, 2013
U.S.A. v. Apple verdict could end the book as we know it – July 11, 2013
U.S. DOJ unwittingly causes further consolidation, strengthens Amazon’s domination of ebook industry – July 11, 2013
Where’s the proof that Apple conspired with publishers on ebook pricing? – July 10, 2013
U.S.A. v. Apple ruling could allow U.S. government to monitor, interfere with future Apple negotiations – July 10, 2013
Judge Denise Cote likely wrote most of her U.S.A. v. Apple ebooks case decision before the trial – July 10, 2013
U.S.A. v. Apple: NY judge rules Apple colluded to fix ebook prices, led illegal conspiracy, violated U.S. antitrust laws – July 10, 2013

38 Comments

    1. Huzzah. The administration is probably mired in other stuff right now, so they may have just gotten to it. They would have taken major heat for inaction on this.

      “The Americans will always do the right thing… after they’ve exhausted all the alternatives.” -Churchill

  1. It never ceases to amaze me that some people still do not see the danger in a government that continues to grow and continues to overreach and meddle in areas it was never intended to do so.

    Our Federal Government has become a monster. It consumes the productivity of countless Americans and gives far less back in return.

    Now it wants to insert representatives inside Apple. Calling Obama a socialist might seem trite on the one hand, but hell, this harkens back to the old Soviet Political Commissars attached to businesses and military divisions. The Political Officer was always around to make sure you followed the party line.

    What does it take? How much abuse of government power ?

    1. On July 4, 1776, Americans became independent from the British government’s tyranny. However, over the last 100 years they have been progressively shackled by the tyranny of “King George IV”: America’s local (city or town) government, regional (state) government, and national (Federal) government. Most of America’s intellectuals and politicians during the 20th century were collectivists to some degree, and it is their implementation of collectivism (socialism) that has been ruining America and the lives of Americans for over a century. The violation of individual rights, the erosion of individual political freedom, and the march towards tyranny in America has continued unabated for the past 100 years, regardless whether the Republican Party or the Democratic Party members were in control of the national, regional, or local governments. Collectivism-Marxism-communism-socialism-fascism-nazism spread throughout the 20th century and in less than 100 years oppressed hundreds of millions of persons and killed over 100 million persons. Americans need a second independence from governmental tyranny.

  2. In other parts of the world, where reason rather than jingoism rules, Amazon’s behaviour in selling e-books below cost would be regarded as anti-competitive behaviour, and blocked. Selling below cost drives competitors out of the market and inevitably results in higher prices for consumers when one seller dominates the space. Apple sought to even the playing field by establishing an agency model where publishers compete with each other and retailers are guaranteed a sensible margin. If the DOJ prevails Amazon will again dominate the market, leading to less competition and the collapse of the hardcover book market. Amazon will then be in a position to charge what it likes. I wonder whether this is really about competition or the power of corporate lobbying and the extent of political donations.

    1. Many things are done in other parts of the world, from slavery to violent misogyny. It should not be the goal of the United Sates to mimic other places, but rather develop the most prosperous and free nation as possible, as was intended from the beginning.

      Under no recent administration I can think of would the proposed “remedies” of the Obama Administration have even been suggested.

      Then again, we are living under the foul stench of demagoguery these days, certainly not reason.

  3. I don’t understand what the DOJ’s stance is. If you buy a book on Amazon online you have the ability to view that book on an iPad via the Kindle app. Ditto for Barnes & Noble. There’s nothing to stop you, as the consumer, from shopping around for the best price and downloading the book to the app of your choice, iBooks included. In fact the iPad is the most versatile e-book reading medium there is, bar none.

    It’s not as if Apple decides to price the iBook online price at $X and disallows you from reading the same book on the Kindle app if it costs $X minus 20%.

    I can’t see where an abuse of a monopolistic position is taking place. In my mind, a monopolistic position implies denying the consumer choice and thereby exerting inequitable pressure on the consumer to accept the price the monopolistic vendor sets the level at. Since there is an absence of a monopoly, it follows that an abuse cannot have taken place and thus the remedies imposed by the DOJ are draconian and beyond the powers originally laid down to curb the abuse of monopolistic powers.

  4. The book that you are thinking of is Fahrenheit 451 by Ray Bradbury. A lot of what has been going on recently reminds me a lot of that book plus 1984 and Brave New World.

  5. The DOJ’s view is myopic. They see only that when Amazon was the leader, prices were cheaper than when Apple got involved. In fact, that was the foundation of their case: “See, Judge? Before Apple, it was cheap. After, more costly. We win!”

    The trouble is, it ignores the 800-pound gorilla in the room: the full gamut of business practices Amazon and Apple resort to in order to establish dominance and support their particular business model. Amazon was trying to dominate the marketplace by being so damned cheap, no one else would bother to try to compete. But Amazon was offering so little to the publishers, they were starting to decline to participate.

    So Apple, already with a reputation for being able to dominate and sustain and with no need to prove anything, approached the publishers with a sustainable and viable (read: high enough that authors and publishers can stay in business) pricing model.

    So the DOJ’s argument of “See… prices were higher after Apple and that’s all we need to show to prove Apple is bad,” is like saying “Alcohol causes pregnancies” and *proving* the argument by pointing to a girl before getting drunk and the girl after getting drunk. (Pay no attention to those rather important details behind the curtain.)

  6. I’m am not exactly sure exactly what Apple did wrong but a lot of ebook prices quickly went from $9.99 to $12.99 in the spring of 2010. This included both Amazon and iBooks. Apple has been found guilty. It is Apple’s option to appeal. If the ruling stands, should they be fined? Yes they should. Should the government have a say in how iTunes is run? Absolutely not. In addition, I’m wondering if the other half of this equation, the publishers, just rolled over due to a lack of funds for a legal fight and were treated more lightly by the Justice Department.

    I do not like large corporations to use their size to inflate prices but legal actions like this offen have unintended consequences. The dot com bust can be traced directly to Microsoft’s monopoly prosecution. The break up of AT&T lead to turmoil in the telecommunications industry that continues to this day. While I am not suggesting that either prosecution was unjust, I’m saying be careful what you wish for. One thing the government does not know how to do is run a successful business with products or services people want to buy at reasonable prices.

    1. I’m STILL paying $12.99 for some Kindle books. Yah know business should be able to price what the market will bear and as soon as people stop or slow in buying in when businesses drop prices. We don’t need the government telling business what to do in this case. The DOJ couldn’t be more wrong especially since its Amazon with the monopoly on selling books. I don’t know how you can sue ANY company with 10% of any market in an Anti-trust suit. I notice now too for Amazon Prime members they will “lend” you some titles for free. Publishers must LOVE that! How the DOJ reconciles allowing Amazon to sell at cut-rate prices to drive other companies out of business completely actually CREATING a Amazon monopoly is beyond me.

  7. What blows my mind is how this punishment compares to the slap on the wrist Microsoft got about ten years ago for being an abusive monopoly and bundling IE with their OS. MS’s practice was clearly hurting consumers only when competition in the browser space did they finally upgrade IE 6. There was a five year period when they had knocked out competition and did absolutely nothing but security updates for it. Yet, their abusive monopoly conviction did almost nothing to change it. Here, Apple tries to level the playing field and the proposal will prevent them from entering any new digital market for ten years. Insane overreaching and absolutely no precedent for anything on this scale.

    1. I didn’t like Microsoft back then any more than now. But even then I didn’t believe that the Government had a valid reason for going after Microsoft. They sucked as a company, but they had every right to have IE come pre-installed. Apple does it and we hear no complaints.

    2. Get your facts straight and do not be fooled by Marxist myths and propaganda: irrational government is the only real abusive monopoly! Microsoft was a market leader, Apple is a market leader. Study history.

    3. Get your facts straight and do not be fooled by Marxist myths and propaganda: irrational government is the only real abusive monopoly! Microsoft was a market leader, Apple is a market leader. Study history.

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