U.S.A. v. Apple: Judge Denise Cote assigns DOJ monitor in Apple ebook price-fixing case

“Judge Denise Cote has assigned former Assistant US Attorney and Justice Department Inspector General Michael Bromwich with the task of monitoring Apple as part of the five-year injunction she hit the Mac, iPhone, and iPad maker with in an ebook price fixing case,” Jeff Gamet reports for The Mac Observer. “Mr. Bromwich will watch over Apple’s business practices for two years, but that could be extended to five.”

“Apple and several of the top book publishers were accused of conspiring to artificially raise book prices up by forcing retailers into a model where the publishers set book prices instead of letting stores sell titles at whatever prices they choose,” Gamet reports. “Changing from a wholesale model to an agency model meant that Amazon would have to stop selling books below cost, which was driving competition out of the market.”

Gamet reports, “Apple is appealing the ruling, but Judge Cote has chosen to move forward with her remedies during that process. Formal arguments in the appeal will come in early 2014.”

Read more in the full article here.

MacDailyNews Take: Why didn’t she eliminate the middleman and just assign Jeff Bezos?

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  1. Hello. If Amazon is “selling books below cost” then isn’t Amazon the problem? Reminds me of Microsoft giving away FREE Internet Explorer to kill of Netscape. Should they have started monitoring AOL because of Microsoft’s assault against all Internet Browsers like Netscape. How does watching Apple stop Amazon from undercutting the market?


    1. Microsoft giving away IE for free was not the problem. Netscape had both free and paid versions of Navigator. (Yes, they charged $35 of the enhanced version of Navigator.)

      The problem was that Microsoft integrated IE into Windows, set up IE as the automatic default browser in Windows, and then *claimed* that IE could not be removed from Windows. This forced the expansion of the market share of IE as it was tied directly to the Windows OS monopoly (the courts ruled Windows had a monopoly position with over 95% userbase at the time). Using a monopoly product to expand the market of a different product or using a monopoly in one business segment to expand the market in a different business segment is illegal. (Having a monopoly, in and of itself, is not illegal.)

      The crazy thing is that Microsoft reached a “consent agreement” with the U.S. Government over a similar kind of thing several years earlier. This IE thing was the second offense. We should remember that the worst thing that happened to Microsoft over this was Microsoft agreeing to never do it again and having an outside auditor for several years — for a repeat offender.

      Amazon selling books at a net loss (maybe not a loss at the gross revenue level, but definitely at the net revenue level) is a totally different issue. It may, or may not, be illegal depending upon how Amazon does it.

      So while you might not like the business practices of Amazon, they’re not even the same league as Microsoft with regard to bad business practices.

  2. So, selling items below cost does not harm the market? Unfair competition by Amazon or just a business model that makes little profit so no one can afford to enter. Yea, that sounds fair?! If only Amazon could barely pay the CEO would I agree. Although, I am sure he has the Steve Jobs corporate profit model for Jeff Bezo personal bank account. Did not follow Steve on that his CEO’s pay!

  3. “Apple and several of the top book publishers were accused of conspiring to artificially raise book prices up by forcing retailers into a model where the publishers set book prices instead of letting stores sell titles at whatever prices they choose,” Gamet reports. “Changing from a wholesale model to an agency model meant that Amazon would have to stop selling books below cost, which was driving competition out of the market.”
    This means, Amazon has the right to drive competition out the market. Apple, adopting the agency model, was being “bad” and Amazon is ??? Robin Hood? —k f— –c-!!!

    What’s artificial, by definition, is selling books below cost, and driving competition out the of market.

    This is beyond crazy, beyond good moral fiber.

  4. Oh and Apple didn’t hold a gun to anyone’s head, there was no force or duress. However Amazon is doing such by selling below cost, where no one is able to suck air let alone eat food or drink water.

  5. What bothers me most about this case is that it is essentially “character assassination” of Steve Jobs. Amazon and the DOJ are convinced that Steve engaged in antitrust activity. But they are wrong. In his entire career, Steve never gave a darn about money for money’s sake. He was way too busy making a ripple in the universe by producing outrageously great stuff. Apple will wrestle the DOJ all the way to the Supreme Court if necessary. It is just not right. The child avenges the parent’s (character) assassination. The ancient Greeks taught us this.

  6. That’s the thing about laws. They’re most useful when the right people break them. The only power any government has over any of us is in when we break laws. When the right people don’t break your laws, pass new ones. Every year we get about 40,000 to 50,000 new laws. Not a single one of them protects us, you and I, from the law pushers and makers.

  7. This is great news, now Apple will have a DOJ inspector on their side. I wonder if it will lead to a case against the so called judge.

    The appeal should be very enlightening.

  8. If Apple has nothing to hide then they shouldn’t be concerned. Because Apple are closed in every sense and hate being asked questions this is a good move and could be quite revealing.

  9. “Amazon would have to stop selling books below cost, which was driving competition out of the market”

    How is ‘driving competition out of the market’ a good thing? The DOJ and Cote must to be deeply deranged. It sounds like they burned their anti-trust/monopoly law books.

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