DOJ: Apple and B&N can continue to use agency pricing

[Kali Yuga]

Originally Posted by Graham

As noted in the case, the Sherman Act states that the playing field should be returned to the state it was in before the conspiracy...

It's not actually part of the Sherman Act -- at least, not its original text. In Paramount, the SCOTUS asserted that punishments could "undo" the effects of the anticompetitive acts.

The thing is, prior to Apple getting into the market and the adoption of agency pricing, Amazon had an alleged 80% of ebook market share. Should it really be the job or goal of the DoJ to give Amazon a monopoly?

It's also far from clear that the alleged collusion affected anything more than the timing, or amounted to all that much more than CEO's having dinner one night in Manhattan.

[stonetools]

Originally Posted by Graham

Where? I've been Googling, and even browsing Shatzkin's site, for the last 15 minutes and can't find it. This is the best source I've found so far, which includes the link to Apple's rebuttal of the case:

http://tech.fortune.cnn.com/2012/05/...o-doj-bite-me/

I've mainly seen denials, not evidence that phone calls were not made, meetings were not held, timings were accidental rather than planned.

The argument from the three refusing to settle seems to be that the DOJ's evidence for collusion is circumstantial, not that they have substantial evidence showing that collusion did not occur.

Graham

You can't prove a negative, really. All you can do is point out the defects in the Government's case. There are significant problems with the Government's time line, for example. Shatzkin:

One is the inclusion — nay, the trumpeting — of the Picholine dinner in September 2008 as evidence of the conspiracy to implement agency pricing. The evidence in favor of DoJ’s contention is that all six big publishers were in the same room. But the evidence against it is that, at that time, nobody except perhaps a small number of people at Apple knew there would be an iPad, an iBookstore, and an agency model implemented 18 months later. In a word: this “evidence” is ridiculous.

The second is the juxtaposition of the fact that Apple told the publishers “unless there are four, there will be no store” (my attempt at memorable phrasing) with the “allegation” that publishers were asking (and telling) each other whether they were in or not. If Apple told them that — which I contend was only revealing to trading partners a pretty obvious and sensible business decision — then the publishers had no need to confer with each other. So suggesting these reports of what one publisher might have said to another proves “collusion” is only slightly less ridiculous than the Picholine “evidence

Also too, I find convincing John Sargent's disavowal that he conspired with the other publishers before challenging Amazon, in the absence of any evidence that he did confer with the publishers. Again, the DOJ has to come up with something other than "We believe they conferred".

I think that the case against these defendants is rather weaker than has been made out here, but really until the discovery process is over, we don't know. Its not a foregone conclusion at this point.

[tubemonkey]

Originally Posted by Kali Yuga

It's also far from clear that the alleged collusion affected anything more than the timing, or amounted to all that much more than CEO's having dinner one night in Manhattan.

Alleged??? If there was no collusion, then why did three publishers settle?

[bgalbrecht]

Originally Posted by tubemonkey

Alleged??? If there was no collusion, then why did three publishers settle?

Sometimes they settle because they believe the settlement will cost them less than what it will cost to defend themselves.

[tubemonkey]

Originally Posted by bgalbrecht

Sometimes they settle because they believe the settlement will cost them less than what it will cost to defend themselves.

Sometimes, but not most times.

[charlesatan]

Originally Posted by tubemonkey

Alleged??? If there was no collusion, then why did three publishers settle?

Because there's a lot involved when being investigated, such as transparency with their financial records, investor confidence, etc.. Kristine Kathryn Rusch covers some of it at http://kriswrites.com/2012/04/11/the...e-doj-lawsuit/

The publishers that settled even went as far as to say that they were not guilty even though they were settling.

[crossi]

Originally Posted by charlesatan

Because there's a lot involved when being investigated, such as transparency with their financial records, investor confidence, etc.. Kristine Kathryn Rusch covers some of it at http://kriswrites.com/2012/04/11/the...e-doj-lawsuit/

The publishers that settled even went as far as to say that they were not guilty even though they were settling.

That's not far. What else guilty or not would you expect them to say? Means nothing.

[HansTWN]

Originally Posted by charlesatan

Because there's a lot involved when being investigated, such as transparency with their financial records, investor confidence, etc.. Kristine Kathryn Rusch covers some of it at http://kriswrites.com/2012/04/11/the...e-doj-lawsuit/

The publishers that settled even went as far as to say that they were not guilty even though they were settling.

So they were willing to take extra punishment to be able to maintain a facade of innocence. How sweet.

[fjtorres]

Originally Posted by HansTWN

So they were willing to take extra punishment to be able to maintain a facade of innocence. How sweet.

Actually, there are very good reasons for this.
They are facing a variety of class action suits in 30-plus states (with more to come) so admitting to wrong-doing in the DOJ suit would be pleading guilty in all the others and, effectively, throwing themselves at the mercy of the court.
By denying all wrong-doing, they force the plaintiffs to make their cases one by one or negotiate a settlement. Obviously the latter.
That "facade of innocense" has its legal uses.

[khalleron]

Originally Posted by charlesatan

Because there's a lot involved when being investigated, such as transparency with their financial records, investor confidence, etc.. Kristine Kathryn Rusch covers some of it at http://kriswrites.com/2012/04/11/the...e-doj-lawsuit/

The publishers that settled even went as far as to say that they were not guilty even though they were settling.

Standard procedure. All parties to a settlement ALWAYS maintain their innocence.

All that means is that they're not stupid, and that their lawyers aren't.

[Hellmark]

Originally Posted by bgalbrecht

Sometimes they settle because they believe the settlement will cost them less than what it will cost to defend themselves.

Yeah. I used to know some people who had a small factory. Their largest competitor sued them with false charges. They decided to fight the charges, rather than settle, and the expenses nearly bankrupted their company. They eventually won on all counts, but didn't get enough in compensation to cover all their legal fees. The owner of the other company who made the false claims said that they were planning on trying to bankrupt them, and that using frivolous lawsuits were cheaper and more effective at killing the competition than simply trying to outperform them in the market. By settling, you end up paying out only a fraction of what you could spend on lawyers, even if you have a 100% chance of winning. Courts are slow, and their are all sorts of tricks that people can do to drag things out, to increase your costs.

[ApK]

Originally Posted by Hellmark

They eventually won on all counts, but didn't get enough in compensation to cover all their legal fees. The owner of the other company who made the false claims said that they were planning on trying to bankrupt them,

Judging only from just this second hand snippet on a forum, of course, it sounds like your friend needed a better lawyer. The judgment didn't include legal costs? The other owner "said" all that and yet there was no counter-suit? I suspect we're not getting the whole picture.

ApK

[charlesatan]

Originally Posted by crossi

That's not far. What else guilty or not would you expect them to say? Means nothing.

Yes. It means nothing. Neither innocence nor guilt.

But definitely not an assurance of guilt, as implied by:

Originally Posted by tubemonkey

Alleged??? If there was no collusion, then why did three publishers settle?

[HansTWN]

Originally Posted by fjtorres

Actually, there are very good reasons for this.
They are facing a variety of class action suits in 30-plus states (with more to come) so admitting to wrong-doing in the DOJ suit would be pleading guilty in all the others and, effectively, throwing themselves at the mercy of the court.
By denying all wrong-doing, they force the plaintiffs to make their cases one by one or negotiate a settlement. Obviously the latter.
That "facade of innocense" has its legal uses.

I wasn't aware of the details in this case, but I was aware of the usual legal ramifications. Which is why, when there are such settlements, nobody ever admits to any guilt. It is just part of the deal that you don't have to. However, if companies really believe there is no case against them they will fight, even if it costs them more in legal fees. Because if they settle, the public will believe they are guilty, no matter if they admit to it or not.

And you need to get your "sarcastometer" re-adjusted.

[Andrew H.]

Originally Posted by Kali Yuga

The thing is, prior to Apple getting into the market and the adoption of agency pricing, Amazon had an alleged 80% of ebook market share. Should it really be the job or goal of the DoJ to give Amazon a monopoly?

It's neither their job, nor their goal.

Their job is to shut down illegal activity, which they are doing. If this hurts the companies engaging in the illegal activity and benefits the companies not engaging in illegal activity...well I don't see a problem with that. Just like I don't think that the FBI should refuse to shut down the mob-run pizza joint, even if doing so would only leave one pizza joint on the street.

And, in any event, I think fears of Amazon's monopoly are overblown. The Kindle came out in Nov. 2007 and for *two years* had no real competition. Sonys existed, of course, but it was far inferior when it came to actually getting books on the device. This two year period gave Amazon 90% of the market.

In Nov. 2009, the Nook came out, with an integrated store like the Kindle's. By the time the iPad came out (April 2010), the Nook had already taken 10% of the market away from Amazon, leaving it with 80% of the market.

So I'm not really buying the idea that only the agency system stood between Amazon and market dominance; it's more like Amazon gained market dominance because they came up with an innovative product and were left alone in the marketplace for 2 years. (The Nook came out in May 2010).

So I'm pretty skeptical that Amazon will easily regain 80% of the market; there are too many additional players that didn't exist when Amazon first became dominant.

(And if the iPad, Kobo, and B&N didn't have 3 different flavors of DRM for the epubs, they might be a little more effective.)