DOJ reiterates need for Apple punishments; gets support from Kobo

[SteveEisenberg]

Originally Posted by pwalker8

If people can't make money on publishing books, there won't be many books published. The reality of the publishing world is that only the top 10% or so of books actually make money and basically support the ability to publish the other 90% of books. Telling publishers that they need to become non-profit or be satisfied with a modest profit just means less books for the consumers to buy.

I'm on your side more often than not. My little point wasn't so much that publishers shouldn't make money, as that no one corporate constituency, whether stockholders or eBook fiction customers, deserves absolute priority.

If profits are plowed into advances for the 90% you mention, that's great. If used to buy back stock, or purchase author services companies, that would be another.

[fjtorres]

Originally Posted by Graham

Straw man. The case was about illegal collusion, not publishers individually setting higher prices for their books.

Books will be published, following more efficient routes to the market. Just like any other business, the big publishing houses have to react to changes in the marketplace and compete.

Graham

People pretend the 5 BPHs are the only trad publishers out there. They're not.
People pretend the only ebook retailers are Amazon and Apple. They're not.

The trial was about illegal *behavior*.
The remedies are about *stopping* that behavior and making sure it doesn't return and about restoring price competition as required by law.

The BPHs were reasonably smart and settled before going to trial.
Apple did not settle and are now on the hook as *convicted* antitrust violators and as the *ringleaders* of the hub and spoke conspiracy.

The judge is now required to find a set of remedies that (at a minimum) prevents the Gang of 5 from ever using Apple as a hub for collusion and (with luck) discourages some *other* player (Google?) from acting as a hub. To achieve those goals, everything is in play. Everything.

No amount of spin, no amount of PR, no amount of negotiation is going to change those two facts: Apple was found guilty and they *will* be punished. Severely.

The chips will fall where they will after that.

That, people, is the "new normal", as they say on TV.
Deal with it.

[ottdmk]

I do find it interesting that Kobo is not quoted as being in favour of the end of Agency... more that it's in favour of eliminating the Apple tax on in-app purchases. While Agency has its problems, I have no doubt that it helped establish Kobo and a few others in the ebook marketplace.

[Canuck_in_Japan]

Kobo was doing just fine, thank you very much!

[bgalbrecht]

Originally Posted by pwalker8

Well, it is true, no matter how many times you deny it. She wrote the first 122 pages of her 160 page decision before the trial started.

http://tech.fortune.cnn.com/2013/07/...erdict-appeal/

So? The judge had spent weeks going over the pretrial motions and Apple's pretrial memorandum of law and the DOJ response and a lot of the evidence provided in discovery. If Apple's arguments were not compelling, and the additional evidence they provided during the trial didn't affect the outcome of the decision, would you really expect her to ignore all the work she had done leading up to the trial? This is not the same as a jury trial where the jury has no clue about the facts of the case until it's presented by the plaintiff and defendant.

[pwalker8]

So, it's a strong indication that the judge went into the trial with her mind made up and rejected any evidence or testimony that didn't support that opinion. Note, that she simply dismissed the testimony of the Apple exec who was actually doing the negotiation with a wave of her hand and with no evidence supporting that wave of the hand. If it's grounds for appeal is something for the 2nd circuit to decide. If I were to guess, I would say that if the 2nd Circuit overturns her decision, then it won't be specifically because of judicial misconduct, but rather the appearance of a lack of objectivity will cause them to scrutinize the legal justification more closely. If it is overturned, I would expect that it will be on grounds that she misapplied the rules involving vertical verse horizontal markets and that she made an assumption (that the publisher were fixing prices) that was not based on the evidence presented in the case, but rather was based on her take on a series of cases that were completed without that particular point being established.

[SteveEisenberg]

Originally Posted by fjtorres

The trial was about illegal *behavior*.

That's consistent with the judge's statements. But if you look at what is actually prosecutable, I think it is about illegal commercial speech.

The remedies are about *stopping* that behavior and making sure it doesn't return and about restoring price competition as required by law.

Price competition between retailers of the same product is not required by US law as enforced. A good example is the way Apple forces retailers of its hardware products to charge no less than the minimum advertised price.

Now, if Apple and Microsoft got together and agreed that the Surface and Macbook would both have fixed retail prices (or fixed within a narrow range), that would be illegal. They would have to do it without clearcut communications. Airlines who often charge identical-to-the-penny prices on competing routes -- and also often don't let retailers like Orbitz undercut the prices at the airline's own web site -- have this down pat. They went through antitrust thirty years ago, got spanked, and now fix prices legally.

The judge is now required to find a set of remedies that (at a minimum) prevents the Gang of 5 from ever using Apple as a hub for collusion . . .

Ever? Then why is the proposed punishment for five years?

Originally Posted by fjtorres

The BPHs were reasonably smart and settled before going to trial.

Right. Because they gave up their right to trial, they only are required to give up to their right to fix retail prices for two years.

One of the most disgraceful aspects of the US legal system, in many jurisdictions, is that if you exercise your supposed right to a trial, your punishment can easily be doubled. The way I read Judge Cote's apparently prejudicial statements is that she was incentivizing Apple to settle. I'm not saying we should feel sorry for Apple, but I do feel sorry for ordinary people caught up in our system.