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