William Gallagher for AppleInsider:
In a wide-ranging interview, former Apple general counsel Bruce Sewell has told law students how the iBooks antitrust case went wrong, and also what it was like moving to Cupertino after years with the much more formal Intel corporation.
Bruce Sewell, who retired as legal general counsel at Apple in 2017, says now that he got the company’s “so important” and “very ugly” iBooks case wrong. Speaking to law students, he talked about the risks that legal teams take and how Apple’s Tim Cook reacted to the loss.
Sewell also revealed what Tim Cook’s response to losing the case had been.
“Tim’s reaction was, [what we had done] was the right choice,” he said. “‘You made the best choice you could with the information you had. You didn’t know about these other things. Don’t let that scare you. I don’t want you to stop pushing the envelope because that’s why legal is an important function in the company.'”
MacDailyNews Take: It’s nice to know, but expected, that Cook did not scapegoat Sewell for circumstances out of his control and information to which he was not privvy. In many (most?) other companies, we imagine the CEO may have reacted differently.
A billion dollars a year budget and they still lose (or settle in a relatively negative position) on virtually every major litigation!
Sewell STILL does not get it with regard to the iBooks case:
1) Things said in negotiations are generally not able to be used against you. Negotiations can be far ranging and things said can have little bearing on what any party really wants. Unless there’s at least a tentative agreement over some element, it’s just posturing and nothing else.
2) The reality was that Apple implemented a “best customer” clause with the publishers. The prosecutors were able to convince the judge that it was a “most favored nation” clause, which it was not. In many (most?) cases like the iBooks case a “most favored nation” clause is illegal a “best customer” clause is not. This alone was a fatal flaw in Sewell’s strategy. He let the prosecutors drive the case to something that was not reality and not in Apple’s favor. He let the prosecutors set the terminology and the definitions even when the prosecutors were wrong. (Guess who uses the “best customer” clause more than anyone. The U.S. Government!)
Apple’s legal team has sucked since the early/mid 1980s. It may be the biggest negative of the entire company.
“…they still lose (or settle in a relatively negative position) on virtually every major litigation!”
??? For all you know, Apple – who is in multiple courts in multiple countries, fighting completely bogus cases by folks looking to cash in on Apples cash hoard, may well get their money’s worth out of their legal team…many many times over. I suspect the latter.
Perhaps the argument for MFN vs ‘best customer’ was that you need an established purchase history to determine a ‘standing’ of ‘best customer’. As Apple with iBooks made this deal when the service was being introduced, it made more sense to the court to accept the clause as an MFN due to lack of purchase history.
In retrospect, perhaps Apple should have stayed away from such clauses (which in effect forced everyone in ebook retail out of a wholesale model) and allowed publishers to set their own price in the iBook store (w/o predetermined price tiers which could be interpreted as ‘setting prices’) and promoted the benefits of the iBook format over the others which could justify any possible ‘higher’ prices compared to the competition.
Or maybe it was price fixing? What?
Okay never mind. All is good.
Why a customer would advocate for higher prices is stupid at best.
To the investor… I’m your customer…