George Priest: Apple should win its e-book appeal

“On Monday Apple will ask the Second Circuit Court of Appeals in New York to overturn an antitrust verdict. U.S. v. Apple boils down to this: Amazon possessed a 90% market share in e-book sales, and Apple developed a method of carving into it, increasing competition,” George L. Priest, who teaches antitrust law at Yale Law School, writes for The Wall Street Journal. “Nevertheless, federal Judge Denise Cote held that Apple violated the Sherman Act.”

“Apple’s appeal is important to more than the company. The Second Circuit has the opportunity to consider the appropriate antitrust rules governing competition between marketing platforms—an important legal and economic issue that Judge Cote ignored,” Priest writes. “What Apple had coordinated was hardly a typical price-fixing conspiracy. The publishers had chosen Apple’s terms—including a cap on prices—even though the terms reduced the returns they would receive from e-book sales. The court entirely ignored what really mattered: the platform competition between Amazon and Apple.”

“n short, the court’s evidentiary rulings concealed the economic motivations driving the industry. All that mattered to Judge Cote was that the publishers’ new agency agreements meant that Amazon had to offer their e-books at non-subsidized, higher prices,” Priest writes. “This is not sensible antitrust policy. Apple attempted to enhance competition, not restrain it—and the court’s decision protects Amazon’s 90% market share in e-book competition… What Apple and the major booksellers did to get a foothold in a market dominated by Amazon was not restraint of trade. It was competition, and progress.”

Read more in the full article here.

MacDailyNews Take: Obviously. Fix the mistake, Second Circuit Court of Appeals.

Now to be fair to Judge Denise Cote, her decision is largely predicated on the fact that she’s a vacant-eyed puppet of a highly confused and possibly corrupt DOJ.

Lady Elaine Fairchilde (left), Judge Denise Cote (right),or vice versa
Lady Elaine Fairchilde (left), Judge Denise Cote (right), or vice versa

[Thanks to MacDailyNews Readers “Fred Mertz” and “Arline M.” for the heads up.]

Related articles:
In pretrial view, judge says leaning toward U.S. DOJ over Apple in e-books case – May 24, 2013
Lawyers have complained for years that Judge Denise Cote pre-judges cases before she enters the courtroom – August 14, 2013

Obama’s DOJ brings in its big guns to Apple e-book appeal – December 11, 2014
U.S. Federal Puppet Denise Cote says she’s troubled by Apple $450 million e-books settlement deal – July 24, 2014
U.S. Federal Puppet Denise Cote: Apple cannot escape U.S. states’ e-book antitrust cases – April 15, 2014
U.S. Federal Puppet Denise Cote: ‘Apple’s reaction to the existence of a monitorship underscores the wisdom of its imposition’ – January 16, 2014
Judge Denise Cote denies Apple request block her friend as ‘antitrust compliance monitor’ – January 13, 2014
Antitrust monitor Bromwich rebuts Apple accusations of ‘unconstitutional’ investigation – December 31, 2013
Apple seeks to freeze its U.S. e-books ‘antitrust monitor’ – December 15, 2013
The persecution of Apple: Is the U.S. government’s ebook investigation out of control? – December 10, 2013
Apple’s Star Chamber: An abusive judge and her prosecutor friend besiege the tech maker – December 5, 2013
Apple takes aim not just at court-ordered e-books monitor, but also at U.S. District Judge Denise Cote herself – December 2, 2013
U.S.A. v. Apple: Judge Denise Cote assigns DOJ monitor in Apple ebook price-fixing case – October 17, 2013
U.S.A. v. Apple: Judge issues injunction against Apple in ebooks antitrust case; largely in line with what DOJ wanted – September 6, 2013
U.S.A. v. Apple: Judge Denise Cote says Apple needs third-party supervision after ‘blatant’ ebook price fixing – August 28, 2013


    1. Well Judge Koh isn’t part of the DOJ but I take your point.
      Can’t see anything being overturned when the whole US legal system is not about fair outcomes…it’s all about the money!

      1. Reminds me of the time I was ticketed for running a red light. The cop was a block away, and couldn’t see the intersection well. When I met her in court, her testimony started by saying that when she first saw me, I was halfway through the intersection. I crossed, confirming that she did *not* see me run the red light. She confirmed.

        The judge still found in her favor.


        Treasury system, not justice system! They are so easily confused by the judges, yet so easy for the rest of us to separate.

  1. Or Apple have just been plain naughty MDN…they have been before and I am sure they will do it again. Comedy is not your strong point as it usually involves you insulting someone if things haven’t gone Apple’s errr MDN’s way. Bless you.

    1. Are you congenitally stupid, incapable of reading what is clearly set out in front of you, or, more likely, a troll with an unhealthy obsession with slagging off a truly innovative company?

        1. No Apple did not fix prices.
          Apple set price caps to stop the publishing houses overcharging.
          The publishers set the prices.
          Judge cote couldn’t seem to get that through her thick head and it seems neither can you.

  2. Yes, Apple *should* win.

    However, when even guys like this can’t get things right I have very little hope that Apple *will* win.

    “The publishers had chosen Apple’s terms—including a cap on prices—even though the terms reduced the returns they would receive from e-book sales. ”

    There is *NO* “cap on prices” in the original agreements for which Apple is being procecuted. The thing people think was a “cap” actually was a standard “Best Customer” clause. IF (a truly huge if) a publisher authorized a different reseller, other than Apple, to sell an e-book for $XX.XX dollars then Apple would have the option to sell that book at that same price. The publisher got to independently choose what prices it authorized organizations other than Apple for which books could be sold. The publisher could authorize a minimum $1 Billion a book if they wanted to do so. The publisher could also authorize the non Apple distributor to give the book away for free. IF the publisher authorized the non Apple distributor to give the book away for free, then Apple could choose whether to also give it away for free or to sell it at a nominal, non zero price.

    Also, the terms did not *necessarily* reduce the amount the publisher got for the e-book. The publisher had unilateral control over the minimum price for which the book could be sold. Apple could either sell the book for that price or more. The publisher would get 30% of that sale price. Therefore, the publisher had final control over how much the publisher got for the e-book. The publisher and no one else could make sure the publisher never got less than a given amount for each e-book sold.

  3. I ain’t over until the fat lady sings. However I don’t know how Cote’s choral voice is, maybe she’s a chirper or a squealer.

    I hoping that justice will prevail but I ain’t holding my breath, justice is pretty rare in some of the world today

  4. And we saw exactly what Amazon did once it’s only true competitor, Apple, which had a paltry portion of the ebook market, was slapped down — Amazon promptly demanded even more concessions from book publishers, even using the agency model with lower than Apple prices, and retaliating against several book publishers who refused to capitulate. But yet no DOJ case against Amazon (probably because Amazon spends far more than Apple on lobbying).

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