WSJ: U.S. Supreme Court should strike down the risible antitrust campaign against Apple

“Perhaps logic will some day infiltrate antitrust enforcement, but not yet,” The Wall Street Journal writes. “On Tuesday a divided federal appeals court revived the competition doctrine of the early 20th century and upheld the risible antitrust campaign against Apple.”

“The Second Circuit Court of Appeals’ 2-1 opinion endorses a 2013 ruling that Apple conspired with publishing houses to fix digital book prices with the introduction of the iPad in 2010,” The WSJ writes. “Somehow this innovation that was ‘unambiguously and overwhelmingly pro-competitive,’ as Judge Dennis Jacobs put it in dissent, has been made into the antitrust crime of the (last) century.”

“In a bizarre speech in London in June, Bill Baer, who runs Justice’s antitrust shop, said the suit was about ‘an example of incumbents colluding to thwart a disruptive threat to the status quo’ and a ‘conspiracy to quash Amazon’s disruptive business model,'” The WSJ writes. “What is he talking about? Amazon was—and remains—the status quo, Apple the disrupter.”

“Apple is likely to appeal to the Supreme Court, which should take the case because Judge Livingston’s holding conflicts with a 2008 Third Circuit decision about antitrust between truck makers and distributors,” The WSJ writes. “The larger point is that the rule of reason is a plea for antitrust common sense, which has been notable by its absence during the Apple e-books farce. The High Court ought to rebuke lower courts that are embracing premodern antitrust and flouting its instructions.”

Read more in the full article here.

MacDailyNews Take: Spot on. End this farce, Supremes!

SEE ALSO:
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

Apple is headed to the Supreme Court over e-book antitrust case? – June 30, 2015
Apple loses appeal in e-book price-fixing case – June 30, 2015
George Priest: Apple should win its e-book appeal – December 15, 2014
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

[Thanks to MacDailyNews Reader “Wing thing” for the heads up.]

40 Comments

    1. All of you guys are wrong and misunderstand the facts and the law…

      I am in this industry. I know the players and I have a network. I’m in this. We work with large publishers and self-publishers daily and we know the law, the policies, the practices, the sentiments of the various players, etc.

      1. It simply is not the case that this case is about Amazon. This is specifically about Apple and their actions. It does not in any fashion absolve Apple from wrongdoing if another company does wrong. That is just a distraction. Apple is the Defendant, not Amazon. If Amazon has done wrong, people or the DOJ could sue.
      2. In this case, it was found that Amazon did not really lose money on most eBooks. Go read the case materials. It’s specifically covered.
      3. Amazon never had 90% of the eBook market. If you’re talking just in the USA, then it may have been something like in the 70s or low 80s in terms of percentage. Worldwide it’s nowhere close. There’s lots of other book/eBookstores in other countries that dominate those areas. And you are the same people who gloated and bragged when Apple had 70% of the tablet marketshare. Or close to 80% of the MP3 player marketshare and locked people into iTunes with their music not being readily transferred to other devices. You’re a bunch of inconsistent, misguided hypocrites. Amazon has had a strong position in the publishing industry because they earned it. They built a platform and a store and a eReader with WhisperNet and put eBooks and self-publishing on the map. They practically invented self-publishing and have changed the industry for the better. They did this long before Apple or Kobo came around.

      Ready for the rest?

      This came out in the trial and the publishers revealed and stated that Amazon does not, in fact, lose money on the sale of eBooks. As consumers, if you think Amazon is losing money on a sale, all the better because you just think you’re getting a better deal. All Amazon does by selling cheaper is cut into their own margins. Amazon does NOT pay $13.99 for eBook bestsellers and sell them at $9.99. The price Amazon gets these books for is confidential and under the wholesale model.

      There may have been up to 36 instances where Amazon undercut a price on eBooks. The courts, rightfully, stated that this was such a fraction a percent of the total eBooks for sale to be irrelevant. But Amazon selling for low prices or even having loss leaders is also not something that’s illegal.

      The courts were clear in their decision. This case is not about the particulars of an agency model vs. a wholesale model, or an MFN clause itself. This case is not about Amazon. It’s about Apple and the world’s largest publishers. It is about a simple matter: Did Apple collude with industry to inflate eBook prices and eliminate competition. The evidence in the case is quite overwhelming that Apple did in fact do this. Just because the publishers didn’t like companies like Amazon making razor thin margins on their eBooks… and that Amazon had a sizeable chunk of the market in the US… this is not an excuse for them all to collude together, with another company as the ring leader, to stamp out any of this competition and completely inflate and flatline eBook prices.

      “Another company’s alleged violation of antitrust laws is not an excuse for engaging in your own violations of law. Nor is suspicion that that may be occurring a defense to the claims litigated at this trial.

      First, it is no defense to participation in an illegal price fixing conspiracy to suggest that others did it too. Second, focusing on the precise terms of agency agreements and the extent to which they may have been similar is far too narrow a focus. The issue is not whether an entity executed an agency agreement or used an MFN, but whether it conspired to raise prices. Apple has pointed to NO EVIDENCE that either Amazon or Google desired either to eliminate retail price competition or to raise retail prices. Quite the contrary. Amazon was ADAMANT in its support of retail price COMPETITION and lower prices. It did not relinquish its control over retail pricing easily.

      The totality of the evidence leads inextricably to the finding that Apple chose to join forces with the Publisher Defendants to raise e-book prices and equipped them with the means to do so.”

      This came out in the trial: Cue told Cook, in writing, it’s “over for everyone” once Random House signs. Meaning Apple would become a monopoly that they hoped in the eBook industry like they were with MP3 players and music. And that they’d be eliminating competition.

      Cue actually blocked Random Houses iPad Apps to squeeze them into signing on. After they signed on, he attributed this success, in part, to blocking their Apps.

      With Apple around, innovative technologies and business models in this industry would struggle to see the light of day. Because Apple’s contract made it virtually impossible for any publisher to do anything but sell under an agency model everywhere else and locked them into a host of other draconian clauses.

      Amazon simply innovated before Apple and the rest of the guys. Apple came late and tried to break Amazon’s dominance through illegal business practices. Amazon never, ever tried to control publishers on other retail channels. Apple did. And they very far to do it.

      One way to look at it is, you get the most powerful people in a room, one side benefits more than the other… but at the same time they both benefit… and after their meeting is concluded, the industry in which they’re in suffers because the net result is the elimination of competition and the inflation of prices.

      We’re not the most powerful, and we’re not in that room. We’re in the industry and this negatively affects us. With an eBookstore, we too are trying to sign on publishers. The way Apple had it, we COULD NOT, in anyway, realize our innovative business model with publishers because of how much legal crap is involved to dance around Apple’s contract. Did Apple see us coming? No. Did the publishers? No. But they got into bed with Apple and that is the problem: signing with Apple severely limited what these publishers could do with other retailers. This right here is a real live example of how shitty this is in the real world and the crux of the case that the DOJ was going after.

      Amazon never had contracts that limited, to such a large extent, what publishers could do outside their store. Apple “severely punished financially” publishers whose books weren’t being sold under the agency model elsewhere. This is a quote directly from the trial and formed part of the contract. This is the problem in that Apple was effectively forcing the agency model on the industry because they didn’t want to compete with the wholesale model.

      What you’ve said… is what some others have said… but just because one company has a major, dominant position in a market is no excuse to break the law yourself to break that dominance. Amazon earned its placed in the book industry because they innovated first.

      “Quotes from court case: The Plaintiffs have shown through compelling evidence that Apple violated Section 1 of the Sherman Act by conspiring with the Publisher Defendants to eliminate retail price competition and to raise e-book prices. There is overwhelming evidence that the Publisher Defendants joined with each other in a horizontal price-fixing conspiracy. Through that conspiracy, the Publisher Defendants raised the prices of many of their New Releases and NYT Bestsellers above the $9.99 price at which they had previously been sold through Amazon. They also raised the prices of many of their backlist e-books. The Plaintiffs have also shown that Apple was a knowing and active member of that conspiracy. Apple not only willingly joined the conspiracy, but also forcefully facilitated it.

      The Plaintiffs do not argue, and this Court has not found, that the agency model for distribution of content, or any one of the clauses included in the Agreements, or any of the identified negotiation tactics is inherently illegal. Indeed, entirely lawful contracts may include an MFN, price caps, or pricing tiers. Lawful distribution arrangements between suppliers and distributors certainly include agency arrangements. It is also not illegal for a company to adopt a form “click-through” contract, negotiate with all suppliers at the same time, or share certain information with them. Indeed, as Apple indicates, many common business practices have been found necessary for the efficient distribution of goods and services. See Monsanto, 465 U.S. at 763-64. That does not, however, make it lawful for a company to use those business practices to effect an unreasonable restraint of trade. And here, the evidence taken as a whole paints quite a different picture — a
      clear portrait of a conscious commitment to cross a line and engage in illegal behavior with the Publisher Defendants to eliminate retail price competition in order to raise retail prices.

      Apple also argues that it is particularly unfair to find that it engaged in illegal conduct since Amazon and Google, among others, used similar negotiating tactics and included nearly identical terms, including MFNs, when they subsequently executed their own agency agreements with the Publishers. There are several reasons that this is not a persuasive argument.

      First, it is no defense to participation in an illegal price fixing conspiracy to suggest that others did it too. Second, focusing on the precise terms of agency agreements and the extent to which they may have been similar is far too narrow a focus. The issue is not whether an entity executed an agency agreement or used an MFN, but whether it conspired to raise prices. Apple has pointed to no evidence that either Amazon or Google desired either to eliminate retail price competition or to raise retail prices. Quite the contrary. Amazon was adamant in its support of retail price competition and lower prices. It did not relinquish its control over retail pricing easily. As Penguin’s Shanks described at trial, when Penguin demanded that Amazon yield its discretion over retail pricing, Amazon “yelled and screamed and threatened. It was a very unpleasant meeting.”

      For its part, Google had been negotiating wholesale distribution agreements with Publishers and only switched to agency agreements at their insistence. Amazon was so hopeful that the Publisher Defendants would relent and revert to a wholesale model once they saw how much money they were losing with the agency model that it added a “model-parity” clause in its agreements.

      In sum, Apple’s independent business reasons for creating an e-bookstore and for adopting an agency model to do so have not created any ambiguity in the evidentiary record that should require hesitation before finding Apple liable. The totality of the evidence leads inextricably to the finding that Apple chose to join forces with the Publisher Defendants to raise e-book prices and equipped them with the means to do so.

      The agreements also included a price parity provision, or Most-Favored-Nation clause (“MFN”), which not only protected Apple by guaranteeing it could match the lowest retail price listed on any competitor’s e-bookstore, but also imposed a severe financial penalty upon the Publisher Defendants if they did not FORCE Amazon and other retailers similarly to change their business models and cede control over e-book pricing to the Publishers.”

      Now, you have to understand. We have in writing Steve Jobs saying, AFTER they had the publishers going and getting them to sign, he scaled up his pressure and dropped the following bomb: He said Apple wouldn’t enter the eBook market if the industry didn’t move over to agency. He didn’t think they could compete at higher prices with folks like Amazon selling for less.

      The courts uncovered a very solid timeline of events from everyone involved… like a clock. After the publishers signed with Apple, they immediately went to Amazon and gave them the ultimatum. I believe it was HarperCollins who Amazon retaliated against by removing their buy buttons from their books within 24 hours after they gave Amazon the agency model ultimatum.

      Here, you can see why Apple’s labeled the ring leader. They put in these “punishment” clauses to make sure that, after the contract was signed, everyone would play along. Those who tried to “screw” the group by undercutting (selling under say a wholesale model somewhere else), would be punished. It was all or nothing. They all wanted assurances that each publisher would play along or the deal was off. This is how Apple facilitated and lead this illegal operation. All of this came out as hard evidence clear as day in court.

      1. Despite your lengthy response, and that you claim to be in the industry, that doesn’t change the fact that the clauses Apple has ensure that they are treated the same as any other company for pricing. There has to be some kind of disincentive if a supplier does not follow the agreement, hence your silly “punishment” screed. Is Apple NOT supposed to come to agreements with all of the main publishers? Are you saying you understand the law better than Apple’s lawyers? Despite 2 bad rulings, Apple is in the right here, and I hope they go to the supreme court, where I suspect justice may finally prevail.

        1. Apple and the publishers colluded together to eliminate the wholesale model and entrench the agency model industry wide. This would enable the publishers to have all of the control over pricing their books. With that power, Apple with the publishes fixed prices of new releases and best sellers where these prices were higher.

          The result would have been that the publishers together controlled all of the pricing and there wouldn’t be price competition or innovative business models in industry and prices would be higher.

          This is an illegal conspiracy that damages consumers and the industry.

          1. Apple did no such thing, you moron.

            The only other time in U.S. History that a company was convicted of such a thing, the prosecutors have hours of taped evidence covering many, many meetings. In Apple’s case it was determined by the judge before the trial that it all happened over one dinner. She did so without the slightest bit of evidence that real collusion took place.

            You are making this whole thing more complicated than it is. It is only about some judges wanting to read more into the Sherman antitrust law than is there by stating that anything that raises prices is a violation. That is not right and the Supreme Court should clarify the matter once a for all.

            1. Sam in SQ:

              Yes, Apple did such a thing you moron.

              The Evidentiary Record… the one that you have never read or seen… contains all of the information and evidence to make a conviction.

              You are a fanboy and are making conclusions based on no evidence and are acting emotionally.

              Apple was found guilty and guilty again on appeal.

            2. You fall back on ad hominem attack. . . which is the refuge of the man with no facts or arguments with weight. The moment you start calling names, your credibility tanks. You do it repeatedly. YOU are the one with absolutely no evidence except your wishful thinking. Again, read the dissent, which starts by ACCEPTING Judge Cote’s findings of fact, although i disagree with her conclusions of facts completely, but even there, the Justice finds no fault in Apple’s entirely legal actions.

          2. You say you all the legalities and you better than anyone on this board. Well how about judge Denis Jacobs, who said, “Somehow this innovation that was ‘unambiguously and overwhelmingly pro-competitive, has been made into the antitrust crime of the (last) century”.

            So, it seems you do not have a monopoly on understanding this issue. Despite the length of your……..ahem length does not matter.

            1. Paul:

              People can dissent. But the onus is on them to prove and support their position. Law is about making findings based on facts and law. Period.

              It’s also not uncommon at all for there to be dissenters in appeals. You people make it seem like because 1 judge in appeals court dissented then there’s a conspiracy against Apple! The court’s decision is wrong! AHHHHH!!!! The sky is falling!!!! Ahhhhh!!! The courts suck!!!! Blah blah.

              Many, many times appeals aren’t unanimous. This is standard.

              There is no conspiracy and the judge who dissented doesn’t make a strong case for herself.

              Everybody just read the evidentiary record (you won’t) and stop emotionally speculating. Unless you have read through the case materials, you’re wasting your time because you can’t attack the court’s decision without having all of the information as to why the decision was rendered.

            2. More ad hominem . . . “you won’t stop emotionally speculating” is an ad hominem attack, denigrating Paul’s very rational statement. Some of us HAVE read the information. . . and find it entirely wanting in justification to have ever been brought.

          3. There is NOTHING wrong or illegal with the Agency model. Even the two other justices who found collusion in the horizontal publishers conspiracy agreed there was nothing that Apple did that was illegal. Apple was a VERTICAL competitor with Amazon, never a horizontal competitor or even in the book publishing business, and was not yet in the e-book selling business. The law is quite explicit that Apple was to be held to a completely different standard than the publishers as a vertical competitor and Cote and the two concurring justices erred in holding Apple to the per se standard which is only used with the horizontal competition of like producers. Apple should have been examined under the standard or REASON. It was not. In fact, Judge Cote ignored the US Supreme Court’s directives on how such cases were to be adjudicated. . . and the appellate court’s two Justices followed suit. Sorry, you are just wrong. Read the dissent. It is a beautiful example of clarity in legal thought and exposition compared the the muddy thinking and erroneous citations of the other two justices.

      2. Must not feed the trolls…
        Must not feed the trolls…
        Must not feed the trolls…

        Oh, to hell with it…

        I’m not going to take the time to refute each and every one of your claims, but I’ll take the time to point out just one of the many, many that are wrong. You state: “Through that conspiracy, the Publisher Defendants raised the prices of many of their New Releases and NYT Bestsellers above the $9.99 price at which they had previously been sold through Amazon. They also raised the prices of many of their backlist e-books. The Plaintiffs have also shown that Apple was a knowing and active member of that conspiracy. Apple not only willingly joined the conspiracy, but also forcefully facilitated it.”

        There was never any evidence that Apple forced the publishers to raise prices. The contracts signed explicitly stated that the publishers controlled pricing, not Apple. There was never presented as evidence any voice recording, deposition, email, or contract which explicitly stated that Apple required the publishers to raise prices. You’re just jumping to the false conclusion that if Apple was aware that the publishers wanted to raise prices that Apple must have forced the publishers to raise prices.

        Also, you fail to mention that the presented evidence *explicitly* showed that while the PUBLISHERS (who had 100% control over pricing, not Apple) initially raised prices on a subset of their offerings, the prices dropped a short while later for books they sold through Apple’s store — in many cases dropping below what the prices were on competing stores such as Amazon (where the publishers did not set the prices). How is any of this price raising or lowering Apple’s fault. (Note the period on that question. It’s a rhetorical question. You don’t need to answer. The answer is obvious with more than two working brain cells. The answer is: Apple’s NOT at fault.)

        My apologies to everyone else for troll feeding.

      3. I just want to point out that you made a huge massive post a couple of days ago under the “Apple is headed to the Supreme Court over e-book antitrust case?” heading.

        It appears to be the same massive post that you are making here.

        It also is a post that appears as a reply to the first poster, and as it is coupled with the first few words “All of you guys are wrong” it indicates that the odds are pretty good that you are here to rant and rave and crap your ego all over the community instead of making a valuable, supportive, and positive contributions to the community.

        I’d kindly ask you to consider not making the same long post again, especially in such a short time. Within this consideration is the option of referring to it. For example I did let you know that I wrote a long reply to your post under the “Tim Cook leads over 8,000 Apple employees in San Francisco Gay Pride Parade”. You haven’t answered to it by the way, which again could be used as an indicator of crapping your ego in front of every body here.

        It’s a personal message to you, one that I am sensitive to, because I write long posts, and get into long discussions here. One way to minimize this is to avoid the redundancy of regurgitating such long posts word for word.

        Thanks.

        Oh and to the issue. Apple will take it to the U.S. Supreme Court, that’s my opinion. We’ll see what the Supremes have to say.

      4. Incidentally your spamming reposts of the same data over-and-over again is useless. We won’t read them again. You are wasting your time. . . especially with your errors of fact you include.

  1. The problem is that established anti-trust legal precedent dating from the Standard Oil days specifies 2 criteria as _prima facie_ evidence of anti-competitive behavior: (1) one party talked with other parties, and (2) prices went up after action taken by those parties. If you have those two ingredients: voilà, you have anti-trust behavior. The US justice system has been brow-beating companies with this over simplistic precedent for decades. Don’t get me wrong: anti-competitive, collusive behavior is wrong. But applying these 2 criteria can have a false-positive result. Like this case.

    The criteria are overly simplistic. They allow a “catch 22”. They fail to permit assessment of whether or not the reference prices being compared (when determining a price rise occurred) were unnecessarily low in the first place …due to predatory pricing behavior. If yes, then the predatory low prices are the issue, not the subsequent rise in prices to fair and reasonable market levels.

    The whole issue is ripe for new legal precedent set by the Supreme Court.

      1. Why Amazon did, regardless of what they paid wholesale for the e-book, so they could keep any competition out. No one could compete or make money selling e-books at that price, because the A-list e-books and best-sellers are where the majority of the profits in any book store are located. Cut off those, and there simply are not sufficient profits to have a successful and profitable e-book store. Ergo, Amazon set the price of the very most desired e-books below what anyone else, including the publishers, could profitably sell them. No sane company would or could enter that market without being willing to send approximately $6 out the door with each of those books sold. It inoculated Amazon against any competition.

  2. You can’t keep a good man or company down.

    Apple will, no doubt, prevail in the supreme court appeal and then hopefully will sue the cote and the broom, big time.

    1. I’m with you on everything except “no doubt’. I hope you are right. This case should be the basis for a 9-0 call to overturn in the Supreme Court, but I think it’s a crap shoot.

  3. The Opinion pages- including Editorials- of the Murdoch Street Journal are just to the right of Attila the Hun. They consistently stand for the heads I win tales you lose attitude for the overclass and corporate America.

    As someone who reads, buys from Apple and Amazon and had a Kindle well before Apple’s entry to the market:

    Prices went up from Apple’s entry into the market for all customers of eBooks. Court records also show Steve Jobs colluding to drive the prices up.

    Apple can just settle and stop pissing away money on lawyers.

    1. DavGreg:

      Absolutely correct. But on here, it’s full of delusional unemployed fanboys with nothing to live for but Apple. So they won’t believe that Apple colluded to drive up pricing and fix pricing. They will vigorously defend Apple no matter what and with no evidence and facts to support their conclusions. Just because they’re emotional about a corporation that could care less about them.

      1. It is not just the Wall Street Journal but many legal scholars versed in antitrust law and price fixing law that are aghast at these rulings. Professors of Law schools and business schools have come out with opinions that the case should never have been brought. Economists, the same thing. The US Justice Department is simply wrong. Attorneys who have specialized in Antitrust have scratched their heads over the legal basis for the Justice Department’s legal theories in this case and come up wanting. . . many have spoken out against it. So this is not some “vast Right wing or Apple Fanboy conspiracy” as you are trying to couch it as. I am an Economist and have been a CEO. . . and this is a travesty of Justice.

        The rule of law is that the most recent precedents are what sets the law, not previous cases that have been superseded. The Judge and the Justices in this case have IGNORED the latest cases and gone on archaeological digs to find ancient Antitrust cases to use as precedents to justify their findings, cases which were over ruled by more modern cases and case law, as well as US Supreme Court rulings. This is NOT the way our courts are supposed to work. You cannot simply shop for old case law that fits your desired outcome when those cases have been obviated by newer case law. . . especially those that have been ruled on by the Supreme Court, which then felt it necessary to outline rules on evaluating future cases. ALL of this happened in this case. First by Judge Cote, then by the two concurring Justices in the appeal.

    1. You confuse-intentionally or not-any criticism of Apple as an attack by a supposed troll. That is simply not the case.

      Many of us enjoy Apple products and stuck with the company through it’s near death experience- I am one of those. Many of us own Apple stock and expect that Apple conduct itself ethically in all matters and make products and services worthy of it’s legacy- I am also one of those.

      Being critical of something is not trolling. Since you attach a Vietnam Service Ribbon as an avatar, I would imagine you understand the value of constructive criticism as any Non-Commissioned Officer, Warrant Officer or Commissioned Officer should. Since I served 8 years in the US Army, I can assure you that that very thing was taught at Fort Benning.

      Nobody should follow anyone or anything blindly- that only seres the interests of madmen, criminals, politicians and con-men. Did you ever read of the indulgences sold by the corrupt Catholic Church that went on even as the willfully blind followed faithfully? How about war criminals who claimed they were just following orders.

      Apple colluded to raise the price of eBooks sold wherever they do business and the court records show the truth, just as Apple earlier was shown to have colluded to repress the wages of workers by restricting a free market for employment. Apple is not perfect- it is a corporation seeking to maximize profit and has done wrong things.

      Apple should pay the fine and get on with things. That is not trolling.

      1. Apple “colluded” to end the predatory “giveaway” pricing forced on the industry by its largest retailer who controlled at least 70% to 80% of the market and kept pricing artificially low. Amazon forced publishers to sell their products at crushingly low wholesale prices or not at all in the ebook market. Apple’s agreements with the publishers would have put an end to that predatory pricing scheme by Amazon by expanding the ebook market. Amazon then called in their markers with the Obama administration to have the DOJ attack Apple’s agreements. It’s that simple.

          1. DavGreg,

            Apple did not collude with publishers: they _talked_ with them about business.

            Amazon’s standard business model is to sell stuff on the agency basis. The publishers’ standard business model for selling paper books is also the agency model. I have no idea why the publishers decided to sell ebooks to Amazon on the wholesaler basis. But when the publishers’ realized it was a bad decision, they certainly have the right to change their minds.

            Why do you suppose Amazon is fighting this issue so hard? Do you think it suits their ultimate purposes? Think about it.

            1. That is like a John telling the cop he did not proposition the hooker. He discussed a mutually beneficial business arrangement.

              Apple got caught with it’s hand in the cookie jar.

            2. No, it is not.

              Using the word “collusion” requires Apple to have been guilty in the first place. People who use the word “collusion” are implicitly assuming Apple is guilty. (I know they were found guilty by the court, but I mean being guilty in fact.)

              Your play on words is something entirely different. It simply attempts to candy-coat a reality that is known to be true: the John solicited the hooker.

              Language is powerful. And often there are words that reflect implicit meaning. The same thing can be explained using words that put a positive, neutral, or negative “spin” on the underlying reality. This issue is well known. It has been found to happen all the time with gender-related differences. An attribute in men is perceived as being authoritative, while the same attribute in women is perceived as being aggressive.

              My point is that the word “collusion” itself conveys an attribute — that Apple was guilty of antitrust discussions with publishers — that many people question as being true, and which is independent of whatever the court might find.

              Over and out.

        1. Zeke:

          First, there is NO EVIDENCE WHATSOEVER that Amazon gave anything away… in that they lost money on many titles and did so to drive away competition.

          Amazon did NOT force publishers to sell at low wholesale prices. In fact, it’s come out that some of these publishers actually made more money on the wholesale model than the agency model.

          You simply have no idea what you’re talking about. You are not in this industry that anyone can tell. You come on here just to argue. You have never read the evidentiary record in this case and you likely never will. Yet you’ll argue like you know what happened. It’s embarassing.

          Apple and the publishers colluded together to eliminate the wholesale model and entrench the agency model industry wide. This would enable the publishers to have all of the control over pricing their books. With that power, Apple with the publishes fixed prices of new releases and best sellers where these prices were higher.

          The result would have been that the publishers together controlled all of the pricing and there wouldn’t be price competition or innovative business models in industry and prices would be higher.

          This is an illegal conspiracy that damages consumers and the industry.

          1. You assume a lot about me, most of which is in error. When I went to law school I learned about anti-trust and predatory pricing. Amazon is a classic example of both. The evidentiary record, which I HAVE read, does not show collusion or intent. Apple talked to publishers, and some prices rose temporarily. That’s all that’s in the record on Apple.

            Amazon, on the other hand, has been guilty of predatory pricing in every market in which it sells anything. Have you read their financial statement lately? When did they last report a profit? Their intent is obviously to drive other retailers out of business while losing money in the short term.

            Amazon provided the Obama campaign organization with millions of dollars worth of in-kind assistance, from employee volunteer time to data servers. Isn’t it coincidental that the Obama DOJ then manufactures a case against Apple when it tries to enter a business dominated (illegally) by Amazon?

            And as for Judge Cote, I am amazed that she hasn’t been disciplined for prejudging cases before hearing any evidence, a practice for which she was well known long before the Apple case. This sock puppet of a federal judge deserves to be disbarred, rather than appointed to a higher judicial position, which I’m sure is the promised the quid pro quo (lawyer talk for “pay back”) for ensuring that Apple is forced out of the ebook business.

            1. Oh, and BTW, you are right about a couple of things. I am an Apple fan, and I am unemployed. I’m unemployed because I retired 3 years ago, thanks to my Apple investments. I’m a fan of Apple for the same reason. So take your sour grapes somewhere else and try to peddle them.

          2. There is indeed evidence that Amazon practiced predatory pricing. It is prima facie evidence. The results speak for themselves. They did not have to force the suppliers into selling below wholesale. . . it was their continual and repeated RETAIL pricing below market value that no other competitor could hope to meet for any extended period of time that established predatory pricing, and the resulting lack of effecting competition in the e-book market that demonstrated the effectiveness of their tactics. That is prima facie evidence of the practice. The removal of the predatory pricing and the rise of the prices to competitive levels AFTER its removal are more proof of the existence predatory pricing. You will find that commentary in the dissent offered to the appeal. . . and it is found also in Economic theory.

            You have no evidence because Apple was not allowed to bring Amazon into the trial. Entrenched agency models are not illegal. . . if so, the realty business in this country would be all guilty of collusion because they are all pretty much operated on the agency model. Many automobile dealers operate on agency models. Again, there is nothing illegal about agency model and forcing such a model is also not illegal. The publishers OWNED their products and are allowed to sell them as they see fit. Nothing illegal about it. Apple was a vertical seller in that market and offered an agency model for them to do that. Nothing illegal.

            The court held that because prices increased it was price fixing. . . but that was a natural economic result of breaking the hold of the TRUE monopolist selling at unsustainable below market price because of the absence of competition. . . which was artificially sustained by those predatory prices they used to keep out competitors. Remove those artificial restraints, and it is natural that prices will find their natural levels. That is the law of supply and demand, not price fixing.

            Finally, publishers do not produce the same product. In other words, they do not, for the most part, truly compete in selling identical products. Publisher A, does not sell the same e-book that Publisher B sells. They are NOT identical products. The appeal to different market segments. They are not necessarily interchangeable. Similarly Publisher C’s product does not necessarily compete with A’s or B’s. They may not even be in the same genres. Customers of A, may not even be interested in products from B or C. To say they are competitors is specious. In other words, A, B, and C do not sell the same book written by the same author and do not compete to sell that e-book to readers. They are only superficially competitors.

            What I am saying is that e-books are NOT mere commodities that compete on price alone, with one e-book from publisher A,B, or C, being interchangeable to the buyer regardless of the publisher, but on the quality of the authors who write the books. Price is often irrelevant to the readers. The publishers do not compete by saying “My books are cheaper than publisher B’s or C’s books!” They compete by offering better books by better writers. Price competition is almost non-existent.

            I am a voracious reader. . . but I have never bought a book merely because it is cheaper than another book.

            1. Totally agree, Swordmaker and Zeke.

              Two funny things. (1) The established business practice for publishers selling paper books to others has been the Agency model, not the Wholesaler model. And the standard practice for Amazon selling most of the stuff people sell through them is also the Agency basis. So it is funny it is such a problem to revert to Agency sales after the publishers realized they made a horrendous mistake.

              The publishers made a naive mistake by selling ebooks to Amazon on the wholesaler basis. They did not see it coming. They did not see Amazon undercutting their money-making titles to try to sell Kindles and to further Amazon’s aspirations of developing its own publishing empire …to compete directly with established publishers. Still and all, stupidity is not illegal. And it is not illegal for the publishers to change their minds, either. This is essentially what the legal system is now telling the publishers: you made a bad decision …but you can’t change it. You have to let Amazon sell your most important titles as ebooks at below their own cost, and at prices that you would never agree to if you had the choice.

              Incidentally, there is a lot of business in the world that is conducted on the Agency basis. It is not illegal. And in fact, it makes a lot of sense for a lot of products. Why would a middleman wholesaler want to undercut the product prices deemed appropriate, for business reasons, by its principal in the first place ? Makes no sense to me. The principal can always lower prices if and when deemed appropriate. So the fact Amazon insists on doing this reveals bad faith on their part, if you ask me.

  4. Why oh why was this case ever prosecuted? And here it is heading to the Supreme Court of the USA. WTF.

    So apparently, what we have is not only grand scale CORPORATOCRACY (as evidenced by the passing of the blatantly unconstitutional ‘Fast Track’ bill) but DUELING CORPORATOCRACY.

    My company can buy more legislators and judges than your company! So NYA!

    Yes, the USA is busily driving itself into utter hell. Who needs ‘terrorists’? Seriously! Stupid wins.

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