Apple gripes about antitrust monitoring

[fjtorres]

Originally Posted by avantman42

I thought anti-trust laws concerned themselves with harm (or otherwise) to consumers, rather than competition. Is that not right?

In the US consumer harm is the yardstick, yes.

That is exactly why Apple was doomed the moment Jobs opened his trap to yap about how Amazon prices would "be the same". Add in the email where he told the BPHs "throw in with us and we'll help you raise prices," and it was open and shut.

And the appeals court pointed out quite correctly that screwing consumers (and authors) is not acceptable, regardless of what it does to competition. Which went down, anyway. Apple apologists conveniently forget the loss of indue ebookstores, the neutering of Kobo and Sony, the loss of hardware-only ereader vendors. Competition *was* harmed.

But it was consumer harm that sealed the case.

[SteveEisenberg]

Originally Posted by fjtorres

That is exactly why Apple was doomed the moment Jobs opened his trap to yap about how Amazon prices would "be the same". Add in the email where he told the BPHs "throw in with us and we'll help you raise prices," and it was open and shut.

I buy your first sentence as having an accurate quotation ("be the same") fairly contextualized.

However, I can't find the next quotation ("throw in with us and we'll help you raise prices,") anywhere except in this thread.

[PatNY]

Originally Posted by SteveEisenberg

I buy your first sentence as having an accurate quotation ("be the same") fairly contextualized.

However, I can't find the next quotation ("throw in with us and we'll help you raise prices,") anywhere except in this thread.

fjtorres was sort off paraphrasing, but essentially that is what Jobs said. Here is the exact quote as reported here:

"throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99."

There are other instances too where Apple's attempt to organize the publishers and fix prices was pretty blatant.

I don't think the Supremes are going to buy Apple's arguments. I think they will even refuse to hear the case.

--Pat

[avantman42]

Originally Posted by fjtorres

In the US consumer harm is the yardstick, yes.

That's what I thought, thanks. Just to clarify, usually "harm" is considered to be all about prices (higher prices equal harm, lower prices equal no harm). Does the law allow for other harms to be considered? For example, if prices stayed the same, but quality suffered, would that be grounds for anti-trust action?

[pwalker8]

Originally Posted by PatNY

fjtorres was sort off paraphrasing, but essentially that is what Jobs said. Here is the exact quote as reported here:

"throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99."

There are other instances too where Apple's attempt to organize the publishers and fix prices was pretty blatant.

I don't think the Supremes are going to buy Apple's arguments. I think they will even refuse to hear the case.

--Pat

I'm not sure why that was considered important since that's not remotely the contract that Apple negotiated with the various publishers.

I would rather imagine that the Supreme Court would hear it since the ruling on what Per Se means with regards to Anti-Trust is contrary to what they ruled in the last major anti-trust ruling. At the minimum, the Supreme Court might hear it simply because if they don't, the the ruling isn't the law of the land, but rather only holds sway in the area the 2nd Court covers. That's the way the US legal system works. Just because a couple of judges in the 2nd Court say something doesn't mean that anyone outside their jurisdiction is bound by it.

[Apache]

And now the US Government is investigating the top 4 US airlines to see if they colluded to keep prices high. It is claimed that the airlines colluded to keep the number of available seats low in order to keep prices up.
Apache

[murg]

Originally Posted by avantman42

Does the law allow for other harms to be considered? For example, if prices stayed the same, but quality suffered, would that be grounds for anti-trust action?

Quality is not an anti-trust issue.

[fjtorres]

Originally Posted by avantman42

That's what I thought, thanks. Just to clarify, usually "harm" is considered to be all about prices (higher prices equal harm, lower prices equal no harm). Does the law allow for other harms to be considered? For example, if prices stayed the same, but quality suffered, would that be grounds for anti-trust action?

Quality is not an objectively measurable issue so it would be hard to argue antitrust on those grounds.
But quantity of supply is measurable and actionable.

In fact, the current news cycle features exactly that kind of case: US airlines are under investigation for suspicion of coordinating to restrict seating capacity to maintain high margins. Pricing isn't the direct harm, but rather inconvenience is. And availability.

Airlines are currently operating at historically high occupancy rates, well above previous boom eras, when they would typically move to larger craft or add flights to try to capture traffic, moves that would trade lower margins for higher revenues. Instead, they are boosting margins by (essentially) refusing to meet demand.

Nothing wrong there by itself, but if they are coordinating to do it...
And since they are all doing it and nobody is actively trying to grow their share...
And they all speak of "capacity discipline"...
...it is suspicious.
Hence the investigation.

But since the airline execs aren't idiots it is going to be hard to prove.
It is unlikely the feds will find company-to-company emails showing clear coordination (as they did in the Apple ebook case) but it is somewhat possible they find internal memos discussing an ongoing "gentlemen's agreement" among the companies (as they did in the other Apple antitrust case, the conspiracy to depress employee salaries by limiting mobility).

The likeliest outcome is that the airlines will each grow capacity by ten percent or less and then claim they are growing capacity but only as the market demands it.

Going to be a tricky case.
The airlines have a long history of coordinating indirectly via otherwise innocuous public statements and actions so proving coordination is almost impossible.

Unlike other industries that help out by bragging about it.

[avantman42]

Originally Posted by fjtorres

Quality is not an objectively measurable issue so it would be hard to argue antitrust on those grounds.
But quantity of supply is measurable and actionable.

Thank you, that explained it clearly.

[PatNY]

Originally Posted by pwalker8

I'm not sure why that was considered important since that's not remotely the contract that Apple negotiated with the various publishers.

It's direct evidence of Apple’s role as recruiter and organizer of the conspiracy. The quote is not meant to show any specifics of a final contract.

I would rather imagine that the Supreme Court would hear it since the ruling on what Per Se means with regards to Anti-Trust is contrary to what they ruled in the last major anti-trust ruling. At the minimum, the Supreme Court might hear it simply because if they don't, the the ruling isn't the law of the land, but rather only holds sway in the area the 2nd Court covers. That's the way the US legal system works. Just because a couple of judges in the 2nd Court say something doesn't mean that anyone outside their jurisdiction is bound by it.

I think the Supremes are likely to see this case as having sufficient differences in the actions of the major players as compared to their last major anti-trust case as to warrant the judgment from Cote, and so they'll view it as not really contrary. Hence they will likely deny to hear it.

Agreed, though, that they may take the case simply to clarify points of law, but then I think they will rule on the side of the DOJ.

--Pat

[SteveEisenberg]

Originally Posted by avantman42

Just to clarify, usually "harm" is considered to be all about prices (higher prices equal harm, lower prices equal no harm). Does the law allow for other harms to be considered?

The law is vague enough that prosecutors and courts can change the focus. It's a common observation that the original focus was on the harm to competition, while the more recent focus is harm to consumers.

Support for my last paragraph is in footnotes found here:

http://ir.lawnet.fordham.edu/cgi/vie...83&context=flr

And in this readable book:

https://store.kobobooks.com/en-US/eb...nkkRetH_koN_.g

[pwalker8]

Originally Posted by PatNY

It's direct evidence of Apple’s role as recruiter and organizer of the conspiracy. The quote is not meant to show any specifics of a final contract.

...

--Pat

It hardly shows that. The context that is missing is that price points was the price structure that the music industry had negotiated with Apple in iTunes. Apple wanted all music to be 99 cents, the music industry wanted multiple price points so they could charge more for the more popular music. Jobs was simply offering a similar price structure to the book industry.

In business, companies negotiate with other companies. Saying that you want to start selling ebooks and starting the negotiation isn't proof that you recruited and organized a conspiracy. The fact that the contract ended up going in a totally different direction is pretty solid evidence that Apple wasn't the recruiter and organizer of a conspiracy, otherwise Apple would be selling ebooks like they do music, at various price points.

[shalym]

Originally Posted by pwalker8

It hardly shows that. The context that is missing is that price points was the price structure that the music industry had negotiated with Apple in iTunes. Apple wanted all music to be 99 cents, the music industry wanted multiple price points so they could charge more for the more popular music. Jobs was simply offering a similar price structure to the book industry.

In business, companies negotiate with other companies. Saying that you want to start selling ebooks and starting the negotiation isn't proof that you recruited and organized a conspiracy. The fact that the contract ended up going in a totally different direction is pretty solid evidence that Apple wasn't the recruiter and organizer of a conspiracy, otherwise Apple would be selling ebooks like they do music, at various price points.

Wait--are you saying that every book in the iBookstore is the same price??

Shari

[fjtorres]

Originally Posted by shalym

Wait--are you saying that every book in the iBookstore is the same price??

Shari

Dunno 'bout now, but originally Jobs' plan was for $14.99 across the board pricing and $12.99 sales on bestsellers.

Except for Penguin, who wanted $16.99, the BPHs balked at $14.99.

[eschwartz]

Originally Posted by pwalker8

In business, companies negotiate with other companies. Saying that you want to start selling ebooks and starting the negotiation isn't proof that you recruited and organized a conspiracy.

And negotiating with all the industry leaders in unison is what anti-trust calls a "conspiracy". Do you have a point?

The fact that the contract ended up going in a totally different direction is

irrelevant.

pretty solid evidence that Apple wasn't the recruiter and organizer of a conspiracy, otherwise Apple would be selling ebooks like they do music, at various price points.