Judge Denise Cote scolds Apple for being ‘unrepentant’ in e-book antitrust case

“A federal judge took Apple to task on Friday for showing no contrition about potentially defrauding its customers of hundreds of millions of dollars,” Joab Jackson reports for IDG News Service. “‘None of the publishers nor Apple have expressed any remorse’ about colluding to fix electronic book prices in 2010, said District Judge Denise Cote, of the U.S. District Court for the Southern District Court of New York. ‘They are, in a word, unrepentant.’ Additionally, Cote expressed dissatisfaction that Apple had not taken any steps to modify its business practices, such as establishing internal compliance monitoring, to prevent it from undertaking similar behavior in the future.”

Jackson reports, “Despite Apple’s apparent hubris, Cote said she wanted to make the remediation as narrow as possible to minimize unnecessary government intervention in the e-book market. The injunction should only try to restore competitive pricing in the electronic book market, to prevent Apple from colluding with publishers in the future, and to award appropriate — though not overly punitive — damages to e-book consumers, Cote said. She stated she would rather not establish an external monitor to watch Apple, expressing hope that the injunction be structured in a way that an external watchdog would not be needed. Nor did she wish to force Apple to change its policies on how it runs its app store.”

“In response, Apple chiefly argued that, because it plans to appeal the court’s decision, the court should stay all further actions. Apple argued that it has compelling reasons for believing that an appeal would be successful for the company. Cote declined to place a stay on proceedings, however, expressing doubt that Apple had that strong of a case.”

Read more in the full article here.

MacDailyNews Take: Apple is unrepentant because they did nothing wrong, genius.

Apple needs to move on to a higher court where they will hopefully run into a judge who can look at the evidence, or lack thereof, objectively.

54 Comments

  1. These ‘damages to e-book consumers’ are some kind of refund for customers who bought books from Apple’s store?

    Or is it a massive wodge of Apple cash delivered straight into the government’s back pocket?

      1. I say it based on years of studying case law and judicial decisions. She’s either an idiot or a crook. Those are the only choices. She ignored the evidence, and somehow constructed a scenario where the defendant is guilty in spite of lowering average prices and not being in control of a significant portion of the market. She ignored Amazon’s predatory pricing and virtual monopoly in the ebook market. She’s either totally clueless or on the take.

  2. Damages, damages?

    You mean like when Ballmer & Gates forced all PCs to ship with only WIndows? No?

    Oh, you mean Apple being amongst many online ebook sellers wanted to have its own pricing system that would let people voluntarily buy at a standard Apple price, but not force that upon anyone?

    Apple users are a smart bunch and if they choose to buy anything through iTunes, they certainly do it knowing the pricing landscape. Google tells all on that and virtually everyone knows Amazon.

    1. Ballmer and Gates did not force all PCs to ship with only Windows. Check your facts.

      Ballmer and Gates had in Microsoft’s contract with its hardware assembly partners that they had to pay Microsoft royalties for every PC they sold, whether it had Windows installed or not. That is not the same thing as you stated.

  3. They seem to be behaving almost as if they believe they didn’t do anything wrong…. oh, maybe THAT is why they are appealing the decision. Seriously, where does this kind of thought process come from? It is not a judicial premise, but smacks more of political grandstanding.

    1. If Apple did what Judge Cote wants and said that it was all a huge conspiracy after all, how could Apple ever mount an appeal ?

      The more Judge Cote talks, the more she demonstrates that an appeal in a higher court is the correct way forward.

  4. So in the bizarro world of DOJ, it’s in consumers’ best interests to have Amazon alone set the prices instead of multiple vendors and the content creators themselves.

    That’ll be just great until Amazon can no longer support its razor thin margins (and Wall Street wakes up to that) and the publishers go under because they can’t charge premium prices for their most interesting products without being sued by their own government.

  5. Transcript of secret message from Obama to Judge Cote, as intercepted by the NSA:

    “Judge Cote, I have good news and bad news for you. First, the good news. Under my administration, America is turning communist, which is in line with my communist manifesto upon being elected.

    And now for the bad news. Due to government sequestrations, we are unable to pay the full measure of your salary. Please make every effort to shakedown any company with cash reserves that comes before your court.”

  6. When people state we need more women in power positions as some how they bring a different perspective or something, I’d like to agree. But then a woman like Cote comes along and we find out that people, men and women, are individuals and that as she demonstrates, a woman can be just as misinformed and wrong headed as any man. So, who cares who is in power, we still have a screwed up mess. By the way, I think Apple made a mistake by not having all women lawyers on this case. Somehow I am detecting a bias against the men by Cote. There is more going on here than meets the eye.

  7. Well, to me it looks like she genuinely believes she is correct. She clearly didn’t buy any of the arguing by Apple and from her point of view, the case is clear: before Apple, eBooks were $10; after Apple, the prices went up across the board, and that is obviously collusion.

    I know we’re all Apple fans here, and I happen to agree with Apple’s position in this case, but can still understand how someone, even with plenty of judicial experience (much more than any one of the commenters here) can be convinced. Judges are often put off by the slick lawyering (cool multi-media presentations, parade of expert testimonies, a consilium of highly paid lawyers in $1,000 suits). Especially when on the other side, we have a government lawyer, struggling to get his old DELL laptop to work… They don’t like the implication that money can buy a not guilty verdict, and when the two sides are so drastically lopsided (the wealthiest tech company, vs. the broke DOJ), it shouldn’t be surprising to see a judge err on the poor side (where nobody would accuse here of being bought and paid for). Ironically, the Apple fans are now doing exactly that — except we seem to be implying that the gang of Google/MS/Samsung paid for the guilty verdict in this case.

    For Apple, there is no immediate harm from any possible injunction or immediate remedy (imposed while waiting for the appeals process to complete), as revenue / profits from the eBook market is negligible. Strategically, it will be an important win, and more than likely, it will come Apple’s way, eventually. Until then, we’ll have to bear the wrath of biased judge.

    1. I agree, in general, with your comments. Well spoken.

      However, I have worked with people like her in government positions before. They are scary people. Their lack of knowledge makes them super dangerous.

      They know more about patents than the patent office so they have no problem using their own likes and dislikes to decide what is a valid patent. You know, like air is patentable but the idea of waving your hand in a specific manner to tell a computer what to do vs entering code, well that just makes sense, so do it… How… well, its magic. No patent there.

      One overheard software engineers harassing the new guy, telling him to get the “bit bucket” (think snipe hunting) so that when you sent data bits to an unused port, they would not spill out on the floor……. Well, she was incensed, those were government bits and we had better not lose any of them.
      No one dared to tell her that a bit was a voltage state and nothing was lost, so we put protocols in place to be sure we did not lose any “data bits”.

      See, just knowledgeable enough to be seriously dangerous. And too proud of their greatness to ever indicate that they might not be smart enough.

    2. Predrag, the issue here is that she made up her mind BEFORE the trial even started — and even had the audacity to publicly state her opinion before the trial. During the trial she acknowledged when evidence was presented that contradicted her pre trial opinion. Then she ruled exactly as she had stated pre trial, ignoring evidence presented during the trial.

      Also, as with the lawyers in the case, she does not understand — or maybe she does not want to understand — the difference between a “Most Favored Nation clause” and a “Best Customer clause”. This difference is a key point missed by virtually everyone. The clauses in the contracts between Apple and the publishers is the latter not the former.

      Also, yes, the overall, average price of books went up after Apple entered the market — temporarily. After a short period the average price went down to lower than it was before Apple entered the market. If there were true collusion the prices would have remained higher.

      Also, Apple, per the contract, didn’t set *any* prices. The publishers could have told Apple to give all the books away for free. The publishers had complete control, other than one fact: the contracts set a MAXIMUM price for certain books. There was never any minimum.

      As for no harm in no stay of remedies: Have you read the DOJ’s requests? Sure, the judge *says* she will tone them down. But, given her rulings so far (which often sound like they were written by the DOJ) I have no confidence that she will significantly reduce the remedies/penalties/actions requested by the DOJ. Even implementing some of them for several months while this goes through the Appeals process could cost Apple many millions. It’s not just lost profits; it’s costs of implementing all of these changes too.

      And just one more thing: This issue is not with regard to “Google/MS/Samsung”. It is with regard to Amazon.

  8. “Despite Apple’s apparent hubris, Cote said she wanted to make the remediation as narrow as possible to minimize unnecessary government intervention in the e-book market. The injunction should only try to restore competitive pricing in the electronic book market, to prevent Apple from colluding with publishers in the future, and to award appropriate — though not overly punitive — damages to e-book consumers, Cote said. She stated she would rather not establish an external monitor to watch Apple, expressing hope that the injunction be structured in a way that an external watchdog would not be needed. Nor did she wish to force Apple to change its policies on how it runs its app store.”

    Sounds to me as if she’s hoping that a light punishment will make Apple more amenable to agreeing now, rather than taking the fight to the supreme court. Clearly, she doesn’t know Apple very well.

  9. If Apple wins, then it will it negatively affect the settlements with the publishers? If it does then there is a reason to block as much as possible at the lower courts? Any views on this?

  10. Apple is unrepentant because they know they are just going to appeal this wacko judge’s ruling, so why bother even listening to whatever she says.

    The only bad thing here is that the appeal process will take time and with her decision on how Apple should run their business will hurt them until they can get everything overturned.

    The plain fact that the judge has been so opinionated before the trial started and even after, ‘Cote declined to place a stay on proceedings, however, expressing doubt that Apple had that strong of a case.’ makes you wonder if they will overturn it just based on those facts alone.

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