U.S.A. v. Apple: Judge Denise Cote says Apple needs third-party supervision after ‘blatant’ ebook price fixing

“The judge overseeing Apple’s ebooks price-fixing case has indicated she will not crack down on the company as hard as the US government has requested, but she also said she was disappointed that Apple has not shown remorse,” Greg Sandoval reports for The Verge.

MacDailyNews Take: Remorse is for the guilty. Apple is appealing your baseless decision, Denise.

Sandoval reports, “For that reason, US District Judge Denise Cote suggested that when she makes her final ruling she will require that a third party monitors Apple to ensure that the company doesn’t violate antitrust laws in the future.”

Read more in the full article here.

MacDailyNews Take: “Blatant ebook price fixing” for which there is no proof of Apple’s involvement. Where’s the smoking gun, Denise?

“But U.S. District Judge Denise Cote in Manhattan suggested a final injunction would be narrower than what the U.S. Department of Justice has been seeking, and would not restrict Apple’s agreements with suppliers of other types of content such as movies, music and TV shows,” Nate Raymond reports for Reuters. “She also said a provision related to Apple’s app store that would allow other e-book retailers to provide a link to their websites or e-bookstores via an e-books app without having to pay Apple for book sales was ‘unnecessary’ … ‘I want this injunction to rest as lightly as possible on how Apple runs its business,’ Cote said at a court hearing.”

“The monitor, she said, would likely be installed to review Apple’s internal antitrust compliance program and procedures and recommend changes, and also required annual antitrust training for employees in Apple’s e-books and content businesses,” Raymond reports. “Apple had vigorously contested hiring of a monitor, saying in court papers it would be ‘extremely costly and burdensome.'”

Read more in the full article here.

MacDailyNews Note: Apple is appealing this case.

34 Comments

  1. There are well-established economic tests and analyses to ascertain monopolistic activity, price-fixing, and anti-competitive behavior. These are utilized when evaluating mergers for antitrust implications, for example. These economic tests and analyses can provide quantitive data on the topic, rather than having to resort to “he said, she said” type testimony, or subjective impressions of the Judge with respect to eyewitness and expert testimony.

    A critical step in evaluating anti-competitive market behavior is to identify the relevant market. DOJ claims the relevant market here is ALL e-books. But the facts of the case indicate the relevant market is “new & best-selling titles”. At the very least, to make an informed decision, DOJ must evaluate “new/best titles” and “all other e- books” separately to ascertain pricing and anticompetitive behavior implications under legal review. These markets appear to have very different dynamics, and lumping them together will likely conceal important distinctions. (The DOJ may not wish to do this, however, because it will likely show anticompetitive behavior on the part of Amazon in the “new/best titles” book market.)

    In addition, anticompetitive behavior must be considered over a relevant time period. Raising prices from ARTIFICIALLY low levels that are not sustainable in the long-run — ie, from below-cost prices set by Amazon, which they subsidize with other monies — is an irrelevant basis to ascertain the existence of “the artificial raising of consumer prices” indicative of anticompetitive behavior.

    Anticompetitive trade laws are intended to foster competition. In this decision, however, it appears that the DOJ is protecting Amazon from fair competition. I believe Apple will win this case on appeal.

  2. I don’t mind most expletives seen on MDN, but I think you’ve crossed a line here. That is a particularly crude and ugly term. Save that one for private. Or better yet, eliminate it from your vocabulary.

  3. I am missing something here? A third party, over site person/committee for establishing ebook pricing and contracts between Apple and the publishers, should technically amount to nothing.

    Apple, I believe did not ban to gather with publishers to fix ebook prices for either general ebooks or NYT Best Sellers.

    Wouldn’t a 3rd party, overseeing this, understand the truth, and not technically be effective in hindering exactly what Apple was doing? I mean rewind and place this person overseeing the beginning. Would they have been able to change anything.

    We should assume that Apple get’s to choose who the 3rd party is, or they get to choose who it’s not. Therefore we would need to believe they are not agents of Amazon. Also, wouldn’t the 3rd party also need to be able to prove their point, as soon as they make an objection?

    I am thinking, if the publishers and Apple need to re-negociate their contract, even if it’s one contract per month, over the next 5 months or so. Who’s to say it can’t be the same or similar to what they have now?

    I mean, I don’t get this, and I don’t understand at what point the DOJ or the Court could possibly believe they are protecting the consumer, Apple, or Amazon, at any point of this, unless someone is being completely dishonest in the first place. Either the DOJ and the Court are lying, or Apple is lying, and it will all be brought to the surface anyway.

    That’s what it seems like.

    Can the court say? – “It doesn’t matter if you are innocent or not. It doesn’t matter if your contracts are fair or not. We decided we don’t like your contracts, and you have to renegotiate. Not only that, you cannot have, even remotely similar contracts as before, and you cannot take a 30% cut of anything. You must loose $3 per book on each sale, or not sell any books at all.”

    Can any agency, government or otherwise really force a company to “loose” money on every sale? Demand that a company not make a profit? Demand how much a company can profit, if there is any to be had? Can they really say, “Umm, f*** it, close your doors, we want to ruin you, because we hate your guts.” And then there’s no recourse?

    Who can actually enforce this? What police or army or politician can really stand behind this? Then, if there is someone who would stand behind this, how do we not have that? I am only speaking about, “injustice.”

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