Legal Experts Suggest Justice Department Unlikely to Win Antitrust Suit Against Apple

In the wake of yesterday's announcement that the U.S. Department of Justice has filed an antitrust lawsuit against Apple and a number of book publishers over alleged price fixing, CNET notes that the government may have a hard time winning its case against Apple. The publishers may, however, find themselves on the losing end of the case should they be unwilling to settle.

"It's a harder case against Apple than the publishers," says Geoffrey Manne, who teaches antitrust law at the Lewis and Clark Law School in Oregon and runs the International Center for Law and Economics.

One reason lies in the Justice Department's 36-page complaint, which recounts how publishers met over breakfast in a London hotel and dinners at Manhattan's posh Picholine restaurant, which boasts a "Best of Award of Excellence" from Wine Spectator magazine. The key point is that Apple wasn't present.

But even the case against the publishers is not a sure thing for the Department of Justice. Some experts suggest that even amid claims that the publishers met to discuss a shift to an agency model being championed by Apple, the publishers may not be found guilty of antitrust violations.

Specifically, the Supreme Court has ruled in the past that pricing arrangements among competitors are not automatically considered to be violations of antitrust law, and that the setting of minimum retail pricing by manufacturers is a permitted policy.

ibooks ipad hand
Several of the publishers involved in the lawsuit have already settled, but Macmillan and Penguin are holding out along with Apple to fight the case. Almost immediately following the filing of the Department of Justice's lawsuit, a number of states filed their own claims against the companies, citing customer overcharges of over $100 million since the move to an agency model of pricing. Regulators in other countries are also reportedly looking at whether they wish to take action on the matter.

Popular Stories

Generic iOS 18

iOS 18.1 With Apple Intelligence: New Features, Release Date, and More

Thursday October 10, 2024 8:26 am PDT by
iOS 18.1 will be released to the public in the coming weeks, and the software update introduces the first Apple Intelligence features for the iPhone. Below, we outline when to expect iOS 18.1 to be released. iOS 18.1: Apple Intelligence Features Here are some of the key Apple Intelligence features in the iOS 18.1 beta so far: A few Siri enhancements, including improved understanding...
top stories 12oct2024

Top Stories: iOS 18.1 Release Date, New Macs Incoming, and More

Saturday October 12, 2024 6:00 am PDT by
Things are firming up for a big Halloween week for Apple, with the company's next operating system updates reportedly coming early in the week and hardware launches coming a few days later. Ahead of those hardware launches, we've recently seen what appears to be one of the most significant physical product leaks in years, while some of the new features in Apple's recent software updates have ...
16 pro

iPhone 17 Pro Models Rumored to Introduce These 5 New Features

Friday October 11, 2024 8:55 am PDT by
While the iPhone 16 series was released just a few weeks ago, there are already many rumored features for the iPhone 17 models, and especially for the Pro models. Below, we recap five key new features rumored for the iPhone 17 Pro and Pro Max so far: 24MP front camera for all iPhone 17 models: All four iPhone 17 models will feature an upgraded 24-megapixel front-facing camera, according...
maxresdefault

The MacRumors Show: Apple's Shocking M4 MacBook Pro Leak

Friday October 11, 2024 8:27 am PDT by
On this week's episode of The MacRumors Show, we discuss the unprecedented leak of Apple's M4 MacBook Pro models and the company's rumored move to more staggered hardware and software releases. Subscribe to The MacRumors Show YouTube channel for more videos Multiple leaks surrounding Apple's unannounced 14-inch MacBook Pro with the M4 chip recently surfaced online. The leaks began with unboxin...
ios 18 1 make primary

iOS 18.1 Includes Option to Set 'Primary' Email Address and Change iCloud Email

Friday October 11, 2024 3:55 pm PDT by
In iOS 18.1, there is a new option to set a "Primary" email address in the Settings app, which means it is easier to change the main email address associated with your Apple Account. The Primary email address is the one that is visible to other people when collaborating on and sharing documents, sending calendar invites, and more. Apple did not previously make it easy to change an Apple...
Generic iOS 18 Feature Real Mock

Apple Stops Signing iOS 18.0

Thursday October 10, 2024 12:10 pm PDT by
Apple today stopped signing iOS 18.0, preventing iPhone users who have upgraded to iOS 18.0.1 from downgrading to iOS 18. Apple released iOS 18.0.1 a week ago on October 3. It is not unusual for Apple to stop signing older versions of iOS within a week or two after a new version of iOS is released. When Apple stops signing an update, it can no longer be installed on an iPhone due to a...
iPad mini review thumb

iPad Mini 7 Coming Next Month: What to Expect

Tuesday October 8, 2024 6:16 am PDT by
Rumors strongly suggest Apple will release the seventh-generation iPad mini in November, nearly three years after the last refresh. Here's a roundup of what we're expecting from the next version of Apple's small form factor tablet, based on the latest rumors and reports. Design and Display The new iPad mini is likely to retain its compact 8.3-inch display and overall design introduced with...
When Will Apple Launch More M4 Macs Feature

Will Apple Release M4 Macs Soon? Here's What the Latest Rumors Say

Thursday October 10, 2024 6:22 am PDT by
Apple often releases new Macs in the fall, but we are still waiting for official confirmation that the company has similar plans this year. We're approaching the middle of October now, and if Apple plans to announce new Macs before the holidays, recent history suggests it will happen this month. Here's what we know so far. As of writing this, it's been 220 days since Apple released a new...

Top Rated Comments

diamond.g Avatar
163 months ago
So they weren't even present, and the publishers control the price? Umm.... why is Apple being sued again?

I thought it was due to the "Most Favored Nation" clause?
Score: 8 Votes (Like | Disagree)
LaWally Avatar
163 months ago
So they weren't even present, and the publishers control the price? Umm.... why is Apple being sued again?
Apple is being sued because it has agreements with the publishers who are accused of trying to use the agency model to allegedly price fix and is therefore considered complicit in the act. Apple is in effect "aiding and abetting" the alleged price fixing in the government's eyes by providing a vehicle through which the publishers can price fix.
Score: 7 Votes (Like | Disagree)
spiderman0616 Avatar
163 months ago
If Apple or the other publishers lose this battle, you are going to see Amazon being turned into the Walmart of e books. They can just undercut like crazy until everyone else shrivels and dies. It's suing one problem and protecting a whole other problem.

I personally like the agency model because it actually supports the industry. I'm not defending Apple's methods, because I still don't know if they're guilty of anything illegal or not, but I'm just saying that I'm not in favor of paying less for something if in turn it kills the company providing the content to me.
Score: 7 Votes (Like | Disagree)
IJ Reilly Avatar
163 months ago
The MFN clause itself is not a problem. The DOJ was alleging that Apple participated in a conspiracy to engage in price fixing. If they participated in a meeting where they and the publishers discussed a strategy to engage in price fixing, that could be a problem.

However, it would not be a problem if Apple simply individually negotiated terms with each publisher, even if the publishers told Apple what other deals they received, or if Apple told the publishers what other publishers were willing to accept. Unilateral action is OK, and revealing other deals is a legitimate attempt to gain leverage. That's the crux of Apple's defense in the separate class action lawsuit.

QFT. The CNET article is heavily spun, which is not surprising considering who wrote it. Legal analysts are going to be all over the map at this point, if only because they've seen only the government's complaint, not Apple's or the publisher's responses. But if you quote libertarian think tanks you are going to get predicable results.

Obviously it's the publishers who are at the pointiest end of the stick, but I don't think Apple needs to have been present at any meetings to be found a party to price fixing. It's going to be difficult to claim that all of these publishers came to the same terms with Apple by mere coincidence. The one quoted email from Jobs pretty much refutes that theory anyway.

All antitrust cases are difficult for the government to prosecute. Citing the DoJ's failures in recent history isn't telling close to the whole story, since most of these cases never make it to trial. They are overwhelming settled out of court by consent decrees, in which the government typically gets at least some of the changes they are seeking. Mr. McCullagh doesn't share that little factoid with us because it doesn't make the government look blithering.
Score: 6 Votes (Like | Disagree)
Amazing Iceman Avatar
163 months ago
Another waste of taxpayer dollars... :rolleyes:

Yep. The DOJ should be more concerned about regulating the price of gasoline and food, so we the consumers don't have to keep paying those outrageous prices. People can choose to buy or not to buy a book, but people have no other choice than to buy gas and food.

What happened to paying under $1 per gallon?
Score: 5 Votes (Like | Disagree)
Evan_11 Avatar
163 months ago
They essentially killed book stores buy undercutting them so there are few left, and did the same to ebooks with 90% of the market because they were selling below cost.

Amazon didn't kill the small book stores. Barnes & Noble and Borders did. Amazon then killed Barnes & Noble and Borders.
Score: 4 Votes (Like | Disagree)