Authors Believe Apple's Entry Into E-Book Market Wasn't Anti-Competitive

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ibooks-iconA coalition of authors and well-known booksellers have come forth to back Apple in a petition to overturn a recent ruling that stated the company was liable in conspiring to fix the prices of electronic books when its iBooks store launched on the iPad in 2010 (via Cult of Mac).

Together, the Authors Guild, Authors United, the American Booksellers Association, and Barnes & Noble have filed a 37-page amicus brief that states Apple was in fact enhancing competition and benefiting its customers.

“We are pleased to lend our support in this matter, critical to anyone interested in a competitive and diverse literary marketplace,” said Mary Rasenberger, executive director of the Authors Guild, in a statement. “We fundamentally question the wisdom of the Second Circuit’s use of antitrust law to punish a business arrangement that demonstrably increased competition in the e-book marketplace.”

The brief falls in line with Apple's petition of the Supreme Court to review the case this past October, after first being found guilty of conspiring to artificially inflate the prices of e-books back in 2013, when the case started. The amicus brief filed by the authors and booksellers backs up Apple's attempts at overturning the ruling, stating that a positive outcome for the case is "critical to maintaining a healthy marketplace for the ideas and First Amendment-protected expression that authors and bookstores facilitate."

The groups even mention Amazon as more of a "disruptive" force in the e-books market, with a "loss leader" strategy that led to domination over the digital bookselling marketplace. The groups use Amazon's recent public battles with publishers like Hachette, where it essentially ceased selling any of their novels due to a price point disagreement, as a primary example. They also look at the market monopoly Amazon held before Apple entered with iBooks in 2010.

“With a 90% market share, nearly every customer who wanted to purchase an e-book had to do so through Amazon,” the brief states. “Amazon could exercise this power to suppress specific publishers, authors, or messages with which it disagreed, with impunity. It also could steer the culture toward the ideas it valued. Amazon controlled what e-books were promoted on its home page, what e-books were recommended to consumers, and what books appeared at the top of a consumer’s search results when she searched for e-books on the Amazon.com website."

With no response yet from the Department of Justice regarding Apple's filing for a review, the company still has an uncertain future in the two year-long case. All respondents have until January 4 to file a response in opposition to Apple's petitioning of the Supreme Court, so the next leg of the case is just over a month away.

Top Rated Comments

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64 months ago
It's common sense that Apple's entry into the E-Book market was great news for consumers, authors and the industry at large. It was bad news for those who wanted to control the market with bullyboy tactics that would only harm authors and publishers.
Score: 13 Votes (Like | Disagree)
Avatar
64 months ago

Well, this is shocking. The suppliers of the content don't think that the raising of prices unilaterally was anti-competitive.

Suppliers always raise prices unilaterally. I would help you out if I could figure out at all what it was you were actually trying to say. The seller of something always controls the price. Apple let the owners of the content set the price they wanted to sell their content for. That was it.
Score: 6 Votes (Like | Disagree)
Avatar
64 months ago
Although I am neither a lawyer or an expert in these sorts of litigation, I did take the time to read some of the evidence. My take is that Apple, when negotiating with the publishers was directly aiming to bring down Amazon and some of the early contract language was very much anti-competitive in that it would force the publishers to change the agreement with Amazon. The final contracts did not have any of this language, but the intent could be interpreted based on the early language.

Apple was smart to not include the language because it did seem wrong. THe question is whether the final contract was still anti-competitive. My personal opinion is that it is not, but the early language certainly give the appearance of problems. Can Apple be held liable about language that was ultimately removed from the final contract? I think this is the bigger question and why they are fighting. Frankly, Apple put themselves in this spot and the question is did they do enough to back out before the ink was dry. If I read the final contract, on its own it looks fine. It's the backstory that looks shady.

Based on all this, I understand why they went after Apple, but I also think they went to far, since Apple ultimately came to their senses and back off the bad language.

Again, my take, based on non-expert reading of the details.
Score: 5 Votes (Like | Disagree)
Avatar
64 months ago

Although I am neither a lawyer or an expert in these sorts of litigation, I did take the time to read some of the evidence. My take is that Apple, when negotiating with the publishers was directly aiming to bring down Amazon and some of the early contract language was very much anti-competitive in that it would force the publishers to change the agreement with Amazon. The final contracts did not have any of this language, but the intent could be interpreted based on the early language.

Apple was smart to not include the language because it did seem wrong. THe question is whether the final contract was still anti-competitive. My personal opinion is that it is not, but the early language certainly give the appearance of problems. Can Apple be held liable about language that was ultimately removed from the final contract? I think this is the bigger question and why they are fighting. Frankly, Apple put themselves in this spot and the question is did they do enough to back out before the ink was dry. If I read the final contract, on its own it looks fine. It's the backstory that looks shady.

Based on all this, I understand why they went after Apple, but I also think they went to far, since Apple ultimately came to their senses and back off the bad language.

Again, my take, based on non-expert reading of the details.

Pretty good comment. I think, though, the basis of the anti-competitive action was that the publishers were colluding, and Apple was the go-between. That, in itself, is illegal. So the early language may indeed be evidence of that collusion. The final contract is actually less relevant; as it would have been ok for Apple to have individual agreements with each publisher like the ones in the contract. The anti-competitive part was the publishers agreeing with each other, via Apple.
Score: 3 Votes (Like | Disagree)
Avatar
64 months ago

Well, this is shocking. The suppliers of the content don't think that the raising of prices unilaterally was anti-competitive.

The "suppliers of the content" (in other words hard working authors who make a living writing the books that you want to read at the cheapest price possible) who actually know what's going on in the market have figured out that Amazon had a 90% monopoly in the market which makes any allegations of anti-competitiveness against any else ridiculous, and they have also first hand experience with Amazon brutally using their monopoly to force companies like Hachette to surrender to their conditions.
Score: 3 Votes (Like | Disagree)
Avatar
64 months ago
Well, this is shocking. The suppliers of the content don't think that the raising of prices unilaterally was anti-competitive.
Score: 3 Votes (Like | Disagree)

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