Apple's Antitrust E-Book Case Enters Appeals, Outlook Good for Apple

ibooks-iconLast year, Apple lost a monumental e-book antitrust case that alleged the company had colluded with publishers to raise the price of e-books. As a result, Apple was forced to submit to a cumbersome external antitrust monitor and the company agreed to pay out $450 million as part of a settlement with several class action lawyers and state district attorneys.

Throughout the lawsuit, Apple maintained its innocence, and in February, the company formally filed for an appeal, asking the U.S. Circuit Court of Appeals to overturn the original ruling. In the appeal filing, Apple called the judge's decision a "radical departure" from modern antitrust law.

As of this week, Apple's case is being heard in appeals court, and it appears that things are going in the company's favor thus far. According to a report from Reuters, some of the judges "appeared sympathetic" to Apple's argument that its agreements with e-book publishers were "pro-competitive."

One of Apple's main arguments during the e-book antitrust case focused on Judge Cote's treatment of the company. Apple believes it was treated unfairly because Cote opted to ignore the positive impact that Apple had on introducing competition into the e-book market at a time when Amazon had a 90 percent market share.

Rather than being treated as a new entrant into the e-book market, which would have demanded a "rule of reason" analysis that judged Apple's impact on improving competition in a way that was good for consumers, Apple's role was viewed as "per se illegal" and automatically labeled anticompetitive despite Amazon's large command of the e-book market.
Circuit Judge Dennis Jacobs asked a Department of Justice lawyer why it was wrong for the publishers to get together to defeat a "monopolist" that was using "predatory pricing."

"It's like the mice getting together to put a bell on the cat," Jacobs said.
Circuit Judge Debra Livingston also said it was "troubling" that Apple's normally "perfectly legal" contracts were labeled as a scheme. A lawyer for Apple told the judges "We think the conduct here was innovative and pro-competitive." Should Apple win its appeal, it may not have to pay the $450 million settlement it reached in July. If the case is overturned, Apple will pay no fines, and if it's sent back to Judge Cote for a retrial, Apple will pay just $50 million to consumers and $20 million in attorney fees.

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63 months ago

What is this, Fox News?

Everything I am reading, Apple has no chance and the mountain of evidence that the original judge had is very sound.

http://www.publishersweekly.com/pw/by-topic/digital/content-and-e-books/article/65020-can-apple-win-its-e-book-appeal.html?utm_source=Publishers+Weekly&utm_campaign=3446655f4c-UA-15906914-1&utm_medium=email&utm_term=0_0bb2959cbb-3446655f4c-304719213#path/pw/by-topic/digital/content-and-e-books/article/65020-can-apple-win-its-e-book-appeal.html?utm_source=Publishers+Weekly&utm_campaign=3446655f4c-UA-15906914-1&utm_medium=email&utm_term=0_0bb2959cbb-3446655f4c-304719213



Good luck Apple and Fast Eddie, tap dancing out of this one.



Are you daft? The case against Apple is weak. Did you not read the appellate judges comments? Even they are finding it hard to believe.

Come back when you actually have read the article and put your anti-Apple, anti-business bias to rest.
Rating: 13 Votes
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63 months ago
I never understood what Apple did that was wrong. I still don't. Clearly I am not a lawyer and I am sure there is some strange law that creates a technicality that is being employed. However, for the average Joe (or Jose in my case :D), what makes sense is that Apple came in and provided the first viable option to Amazon. And have prices or competition improved since they were found guilty? No.

I hope this appeal will at least clarify what the heck the crime was in Joe/Jose terms.
Rating: 8 Votes
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63 months ago

Appellate judges? It was one of the three.


It was two of the three.
Rating: 7 Votes
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63 months ago

But, but, but, a Judge prejudging a case before the trial has started is very bad, isn't?


This is an appeal...they're dealing directly with the DoJ...nice try!

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Weak??? They lost the case! That is why they are appealling.
Hhahahaha


Keep drinking the Kool-aide.


If it wasn't weak somehow, there would be no appeal. Please hold the unnecessary laughter when you reply.
Rating: 6 Votes
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63 months ago

In a quick snapshot, here goes...

Amazon was selling ebooks, mostly for $9.99.

Jobs and Fast Eddie came up with a scheme to get into the ebook market for their new iPad, without having to compete with price (the last thing they wanted to do).
So they colluded with a bunch of publishers, who didn't like Amazon having so much control, to agree that the price would have to be set at $14.99, no sales, nothing.
If Amazon didn't like it, they couldn't sell the book at the price they wanted to.

And bad news for Apple, they caught Jobs on video admitting to it when asked about how to compete with Amazon, "it will cost the same".

oof.


Why is that illegal? Arguably, they were challenging Amazon's monopoly on ebooks, right?
Rating: 6 Votes
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63 months ago
Finally some sanity in a courtroom about this case.
Rating: 5 Votes
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63 months ago

Perhaps he is not getting the original point, so here it is: The MR stated Apple's contention not as their argument to the court, but in a way that made it sound like it is already a fact.


I'm sorry, I've read it and reread it. The entire sentence is quite clear that it's a summary of Apple's request, and concludes with a direct quote.

The claim that Apple asked the court to overturn the ruling is a fact, the reason they gave is an opinion. The facts are written in the author's own words and the opinion is in quotes. The words thrown back at me are neither; they're just bits of a sentence that make no sense on their own.
Rating: 4 Votes
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63 months ago

Wow, editorialize much?


If only there were some way to distinguish quotes from the author's own words.
Rating: 4 Votes
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63 months ago

In a quick snapshot, here goes...

Amazon was selling ebooks, mostly for $9.99.

Jobs and Fast Eddie came up with a scheme to get into the ebook market for their new iPad, without having to compete with price (the last thing they wanted to do).
So they colluded with a bunch of publishers, who didn't like Amazon having so much control, to agree that the price would have to be set at $14.99, no sales, nothing.
If Amazon didn't like it, they couldn't sell the book at the price they wanted to.

And bad news for Apple, they caught Jobs on video admitting to it when asked about how to compete with Amazon, "it will cost the same".

oof.


Aha, so now I see that you don't really have that firm a grasp over what happened at all...why are you on this site?
Rating: 4 Votes
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63 months ago

Ok, let me explain this in simple terms that might make it clear how this is a crime or at least could be construed as one.

I create a product called XYZ and sell it to Amazon for $7 each. Amazon then sells it for whatever price they want to sell it for, but I always get $4.99 each for them. Amazon can sell it below their cost for all I care, I get my money after all. But let's just say that Amazon was selling it for $8.

Now Apple comes along and says I will sell XYZ for whatever price you want me to sell it for, but I will take 30% to cover our costs and make a profit.

Ok, so far there is no problem here as far as the law is concerned, as it is simply a different business model that Apple chose to use.

So, I chose to sell through Apple for $9.99, which nets me slightly less than from Amazon, but I figure I will make enough sales to make up for the lower dollar amount. And I may not be able to go any cheaper due to my costs per unit.

But now, Apple comes in and says, oh but there's one more catch, you can't allow Amazon to sell it cheaper than we are selling it.

Now, I have to go to Amazon and say you can't sell the product for less than $9.99, which means a $1.99 increase over their previous price and that is simply so that I can sell through Apple and comply with their most favored nations clause.

This is the part that I think most people forget about and don't realize how much it really did increase the amount consumers are paying for eBooks.

Competition is good and drives prices down, most favored nations clauses are bad and drive prices up.


Most favoured nation clauses aren't illegal, so how have you explained to us why it's a crime?

If your customers can't get your product for a fair price they can just buy someone else's instead.

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Yes, my fault, I didn't read the second one, thanks

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The problem was not the MFN clause, the problem was forcing all the stores, including Google Play, B&N, Sony, Kobo, etc change to the agency model


No, that's not illegal either. It was the timing of all publishers switching at the same time which was deemed a conspiracy.
Rating: 4 Votes
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