Apple gripes about antitrust monitoring

[pwalker8]

Originally Posted by Sil_liS

I think that the basis for the different perspectives on this is the answer to the question: did Apple collude to fix ebook prices?

And the answers are:
Yes.
and
Yes, but it shouldn't be illegal.

[C]No, they left the price up to the publishers, but inserted a clause that the publisher couldn't sale for less elsewhere.

My take on this is C.

[pwalker8]

Originally Posted by Prestidigitweeze

I prefer not to speculate about people's unstated motives, though I couldn't be certain you'd articulated exactly the argument I'd assumed you had.

There seem to be a lot of members here (and I'm not naming names) who retain someone's initial stated opinion and then choose to respond to all subsequent posts by that individual as if they were camouflaged attempts to advance an agenda stated or implied by the early opinion.

Digressions are fine, but constant ad hominem seems a degradation of the momentum of any discussion. To respond to more reasonable posts as if they were interchangeable with a poster's initial misstep is to privilege enmity over speculative thought.

We all make mistakes and some of them are emotional in nature. Everyone loses their cool occasionally (though some of us are more practiced at losing it off-camera).



My sense is that we're out of our legal depth. I can see the logic of your argument but know of no way to test or verify its application here.

FJ Torres makes the point that everyone but Apple chose to settle and avoid being targeted -- the idea being that Cote's decisions regarding punishment are unprecedented because no other corporation has been as stupid as Apple about refusing to settle in the face of such charges.

Whether or not you think that argument is fair to Apple or relevant to the sweep of Cote's decisions, I find the idea difficult to accept -- not because Apple is necessarily in the right, but because corporations often do stupid things based on bad legal advice. If Apple is guilty of that, then I doubt they were the first to make that mistake.

And if Apple isn't the first, then I'd have to study past cases in which companies chose not to settle and compare the actions and outcomes of those to the current example.

I certainly find the doctrine that a judge should increase someone's punishment for daring to exercise their constitutional rights to be both arrogant and repugnant.

[pwalker8]

Originally Posted by Sil_liS

A trial can only be non-jury if the defendant waives the right to a jury trial. Apple chose to leave the decision entirely in the judge's hands.

Which has absolutely nothing to do with whither or not Judge Cote is reported by attorneys who appear before her as choosing sides and acting in a prejudicial manner on a regular basis.

In general, it can be very difficult for a layman to understand a lot of the technical details around matters of law such as copyright law. After all, judges get it wrong all the time, why should laymen be expected to understand it.

[Sil_liS]

Originally Posted by pwalker8

[C]No, they left the price up to the publishers, but inserted a clause that the publisher couldn't sale for less elsewhere.

My take on this is C.

And 'couldn't sale for less elsewhere' is price fixing.

[Sil_liS]

Originally Posted by pwalker8

Which has absolutely nothing to do with whither or not Judge Cote is reported by attorneys who appear before her as choosing sides and acting in a prejudicial manner on a regular basis.

In general, it can be very difficult for a layman to understand a lot of the technical details around matters of law such as copyright law. After all, judges get it wrong all the time, why should laymen be expected to understand it.

Apple's lawyers are not laymen. They understood the risks but decided that this was the best course of action. Either they believe the reports and thought that the judge would choose their side, or they don't believe the reports and are just trying to accuse the judge of something that they don't think that she did.

[jgaiser]

Originally Posted by Sil_liS

And 'couldn't sale for less elsewhere' is price fixing.

Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.

The intent of price fixing may be to push the price of a product as high as possible, leading to profits for all sellers but may also have the goal to fix, peg, discount, or stabilize prices. The defining characteristic of price fixing is any agreement regarding price, whether expressed or implied.

Price fixing requires a conspiracy between sellers or buyers. The purpose is to coordinate pricing for mutual benefit of the traders. For example, manufacturers and retailers may conspire to sell at a common "retail" price; set a common minimum sales price, where sellers agree not to discount the sales price below the agreed-to minimum price; buy the product from a supplier at a specified maximum price; adhere to a price book or list price; engage in cooperative price advertising; standardize financial credit terms offered to purchasers; use uniform trade-in allowances; limit discounts; discontinue a free service or fix the price of one component of an overall service; adhere uniformly to previously-announced prices and terms of sale; establish uniform costs and markups; impose mandatory surcharges; purposefully reduce output or sales in order to charge higher prices; or purposefully share or pool markets, territories, or customers.

http://en.wikipedia.org/wiki/Price_fixing

[Sil_liS]

Originally Posted by jgaiser

http://en.wikipedia.org/wiki/Price_fixing

And your point?

[jgaiser]

Originally Posted by Sil_liS

And your point?

Sorry. Just agreeing with you with a bit of detail.

[fjtorres]

...where sellers agree not to discount the sales price below the agreed-to minimum price...

That is what MFN clauses do: they set a common minimum price.

In this case, the publishers, being the sellers of record, agreed not to sell ebooks any cheaper than at iBooks. Through the *combination* of Agency and MFN, Apple literally got to set Sony, Nook, and Kobo's prices. And the DOJ took exception to the combination, which is why they took pains to point out their beef was with this specific instance of Agency pricing, not the concept itself.

Agency+MFN = illegal price fixing.
5 Publishers coordinating through Apple to fix prices simultaneously = conspiracy.
Conspiracy + illegal price fixing = a world of antitrust hurt.

Fully documented.
Open and shut.

No matter how they try to muddy the waters or spin it, those facts are literally beyond legal dispute.

[Sil_liS]

Originally Posted by jgaiser

Sorry. Just agreeing with you with a bit of detail.

I was wondering about that.

[Sydney's Mom]

Originally Posted by pwalker8

I certainly find the doctrine that a judge should increase someone's punishment for daring to exercise their constitutional rights to be both arrogant and repugnant.

This is done all the time, and is part of the advice a good lawyer gives. This is a civil case; plea bargaining is how it is done on the criminal side.

[SteveEisenberg]

Originally Posted by Sydney's Mom

This is done all the time . . .

Lots of wrong is done all the time.

[Greg Anos]

Originally Posted by pwalker8

I certainly find the doctrine that a judge should increase someone's punishment for daring to exercise their constitutional rights to be both arrogant and repugnant.

The judge did not punish Apple to the full extent of the law. It's rather like a plea bargain, or a parole, in exchange for not having the full extent of the law invoked, a lesser punishment was made, contingent on the plaintiff following the term of the punishment agreement. If the plaintiff does not follow the terms, the deal fails, and a re-sentencing (sic) occurs. (And it's never easier that the plea...)

Would Apple have preferred no oversight, and a Judicial order requiring the opening of the iStore to any bookseller for free, and the threat that if they were found guilty of another anti trust violation, the company would have to be broken up into multiple companies?

That would have been within the legal purvey if an anti-trust settlement, as well...

[fjtorres]

The DOJ made it clear in their filings they were not looking for the broadest, harshest punishment, nor even a true restoration of the status quo ante, which is what antitrust usually prescribes (hence the precedents where companies get broken up). All they asked for is for Apple to stop conspiring. Since Apple refuses to even pretend they won't do it again, the least of the available penalties was monitoring.

The next step up, as suggested, would be mandatory carry of competing ebook reading *and* selling apps.
The next step from there would be forced divestiture of iBooks or even the entirety of iTunes, breaking Apple into two: a hardware vendor and a content vendor.

Apple is getting leniency and they don't realize they are getting off lightly. They are instead whining for a free pass that effectively renders the guilty verdict meaningless. They were given a suspended sentence with parole and they are asking to be released free and clear.
That is not going to happen.

[Prestidigitweeze]

Originally Posted by fjtorres

1- Most price fixing conspiracies are settled because of the Prisoner's Dilema. The first to settle gets off lightly and the last gets hammered.

2- If Apple's legal counsel told them a hub-and-spoke conspiracy was not a violation of antitrust they should have been fired on the spot. Possibly disbarred for incompetence. It is a textbook example of the kind of behavior antitrust was created to prevent. My suspicion is Jobs decided he was not going to settle a second antitrust lawsuit and everybody else has been stuck trying to follow through to protect their image. Hence the legally-weak, PR-focused filings. It's all about telling the faithful they are being victimized. It's their way of overturning the table, because neither the facts nor the law are on their side.

3- Companies have refused to settle antitrust cases before. None has done well. AT&T was destroyed until all that remains is the name. Microsoft was saddled with a monitor for years, billions of dollars of ambulance-chaser lawsuits and shakedowns. Conversely, when Apple quickly settled their first antitrust conspiracy case, it got buried so quickly most people don't even know it happened and think it's a bit of meaningless trivia instead of a context-setter for the current penalties trial.

They should have not launched the conspiracy simultaneously, that was arrogant and stupid. Having done that, and having been caught, they should have settled. Even now, they have the chance to minimize the damages by accepting they crossed the line. Or at least pretend they do.
That way they get to live and conspire another day.

Antitrust is not a rap you can beat.

1. Thanks for putting a name to the prisoners' dilemma.

2. While I understand your arguments for what Apple should have done and why they were stupid not to have settled (and I appreciate the clarity with which you've made them), I need more background on past decisions to know whether the issue is entirely that Apple's (and/or Jobs') choices were unwise or that the judge was unconscionably severe for career-making reasons. (I'm thinking of the publicity hound judge whose televised vow to inflict the severest sentence in the history of rape trials compelled Roman Polanski to flee the country -- not because he was unwilling to go to prison, but because the judge promised to send him there for longer than anyone who had ever committed the same sort of crime had served.) Of course, if Cote is truly that unreasonable, then that would have been even more reason to settle.

3. Thanks for the recap of precedents. Again, vividly and succinctly put.

I'd still like to compare the severity of those verdicts (and others) and the implementation of the judgments with Cote's.