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Judge hits Apple with e-book injunction, requires external compliance monitor

post #1 of 45
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On Friday, a federal judge barred Apple from entering into further price-fixing agreements with other parties, and also ordered the that the iPad maker bring on an external compliance monitor in order to ensure the company's iBookstore does not again violate antitrust laws.



U.S. District Judge Denise Cote ? the same judge that presided over Apple's e-book price fixing trial ? handed down an injunction against the Cupertino company. Under the order,, Apple cannot enter into agreements with major U.S. publishing houses that would hinder its ability to lower e-book prices or offer discounts, according to Reuters.

Cote's order comes in the wake of the Department of Justice's court victory over Apple, a case in Cote found that Apple was liable for "facilitating and encouraging the [publishers]' collective, illegal restraint of trade."

Under Cote's injunction, Apple will be required to stagger new contract negotiations with HarperCollins, Hachette, Simon & Schuster, Penguin, and Macmillan. Negotiations with Hachette would begin two years after the effective date of the final judgment, with Harper Collins negotiations commencing six months after that. Apple would be able to enter negotiations with Simon & Schuster, Penguin, and Macmillan successively every six months following.

Apple would also be barred from enforcing "most-favored-nation" clauses in ebook publishing contracts for five years, as well as from entering into any contract containing such a clause for five years. This aspect of the injunction applies to all publishers, not just the five majors that settled with the DOJ.

The injunction, set to go into place in 30 days, has a duration of five years. The court can choose to extend the injunction, though, in "one or more one-year periods" at its own discretion or at the behest of the DOJ.

In addition to barring Apple from entering into antitrust agreements with the publishers, Cote also required that Apple bring in an external monitor to ensure compliance, saying that the monitor is necessary due to Apple's "blatant" antitrust violations. Apple has previously resisted such action, arguing that it would cause undue cost and burden.

Cote promised to levy the injunction last week, and she delivered on Friday. The judge's order in the case is narrower than the punishment the Justice Department had earlier argued for.

"I want this injunction to rest as lightly as possible on how Apple runs its business," Judge Cote was quoted as saying.
post #2 of 45
You stinking judge. Apple should not have gotten any charges. They didn't do anything. But that's our government, instead of focusing on actual crime, they pick on people that makes life easier on the world. I love apple, and I'll support them through anything. And I can't stand this corrupt government... Anyway, apple should stop that judges iPhone from working, no iMessages, Siri, etc. that'd teach Judge Denise Cote.
post #3 of 45
IMO this demonstrates a lack of clarity and is a career limiting move.
post #4 of 45
Proving once again how most of us believe that our government is no different than others when it comes to corruption. Does this woman really KNOW anything about Apple? It doesn't look like it. Holder is the ultimate jerk in all this.
post #5 of 45
Nothing in there is a big deal. It says Apple can't enter into new agreements that violate the law. Well, they already have agreements in place, so the relevant MFN clause will be stricken and the rest of the agreement will remain in force. And the external monitor won't do much, at least in the short term.

None of this will affect Apple's business in the short run - and it's likely to be overturned before this ruling has any significant impact.

Not to mention that some of the new rules are blatantly anti-competitive. For example, staggered negotiations? So if publisher #1 gets some concession from Apple tomorrow, the other publishers can't negotiate for that concession for several years? Could it be any more anticompetitive than that?

Everything Judge Cole does makes it even more likely that this will be overturned.
Edited by jragosta - 9/6/13 at 8:02am
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post #6 of 45
1. If this means that consumers will loss access to those publishers books for two or more years expect class action suits etc.

2. Apple is already working on an appeal.

What consumers really need is industry wide rules, not ones that target only one company. Things that limit top pricing, exclusive deals etc. For alll forms of media. It would also be nice tosge some rules about reasonable parity between physical and digital versions in terms of quality, extra features, subtitles etc.

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

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post #7 of 45
Quote:
 None of this will affect Apple's business in the short run - and it's likely to be overturned before this ruling has any significant impact.

 jragosta: have you read that Apple has actually filed such an appeal?  I would have expected they would have, but have not heard any definitive information that says they actually have.  Aren't they past the deadline for filing an appear if they haven't already?

post #8 of 45

Besides a backwards justice system, Apple's eBook "problem" is that they just don't have enough lobbyists in DC.

post #9 of 45
Quote:
Originally Posted by deb2319 View Post

 jragosta: have you read that Apple has actually filed such an appeal?  I would have expected they would have, but have not heard any definitive information that says they actually have.  Aren't they past the deadline for filing an appear if they haven't already?

They said that they were planning to file an appeal and it would be truly bizarre if they didn't. However, I haven't seen any notice that the appeal has actually been filed.
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post #10 of 45

So, if this actually goes in effect, it would be nice if Samsung had to actually pay the money due also.

post #11 of 45
So bogus. Apple wanted publishers to be free to set their own prices and just charge a percentage. Sounds American to me.
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post #12 of 45
Quote:
Originally Posted by Robin Huber View Post

So bogus. Apple wanted publishers to be free to set their own prices and just charge a percentage. Sounds American to me.
I agree. It's crazy what this government does.
post #13 of 45

That's the reason the government is so screwed up in the first place... too many lobbyist. We don't have anyone decent in government anymore b/c in order to get in you have to get through the wall of special interests and their money. No one in government is interested in the well being of their constituents anymore. If anything I admire Apple for generally steering clear of that mess, unlike Google. What needs to happen is for us to bar private money from government and then clean house of all the rats that are there now. Combine that strategy with term limits for everyone and you'll have a government that functions again. Oh, and can we agree to never elect someone to office who things government is the problem to everything.... if you don't believe that a democratic government can function properly then why they heck should you be hired to run that government?... just pure insanity. 

post #14 of 45
Quote:
Originally Posted by jragosta View Post

Not to mention that some of the new rules are blatantly anti-competitive. For example, staggered negotiations? So if publisher #1 gets some concession from Apple tomorrow, the other publishers can't negotiate for that concession for several years? Could it be any more anticompetitive than that?

I understand what you mean and agree, but Apple giving concessions was a bad example.
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
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post #15 of 45
I'd like to imagine Tim Cook sending a short message to the DOJ and Judge Cote along the lines of an infamous pre-war telegram (I forget... could have been from Louis Meyer of MGM as a blunt reply to a rival film producer's proposal?) which simply read... "**** you... stiff letter follows!"

Edit: I see the word spelled "eff you see kay" is now censored... welcome to free speech!
post #16 of 45
Quote:
Originally Posted by ceek74 View Post

Besides a backwards justice system, Apple's eBook "problem" is that they just don't have enough lobbyists in DC.

I knew it wasn't going to go good for Apple when the publishers settled, all of these publishers at one time or another published books for presidents, ex-presidents, senators, representives, supreme court judges, etc. Do you not think that they called upon their political connections for some help?
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #17 of 45

Anti dumping laws are made to protect consumers in the long term, but in USA they seem to be valid only to block international trades. Now US government is protecting the main dumping actor: Amazon. This will have serious cultural implications; although Apple, one way or another, will end up selling more books that anybody else. Unless US judges  keep helping Citizen Bezos to build his monopoly, and then charge whatever he wants for books, sell whatever he feels is profitable for him. or distribute just what fits his own taste. Dark ages.

post #18 of 45
Quote:
Originally Posted by dasanman69 View Post

I understand what you mean and agree, but Apple giving concessions was a bad example.

Why is it a bad example? Her decision makes it impossible for any publisher to get a better deal for several years.

Here's a summary of the appeals issues:
http://tech.fortune.cnn.com/2013/07/10/apple-ebook-verdict-appeal/
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post #19 of 45
Quote:
Originally Posted by iNosey View Post

I love apple, and I'll support them through anything.

At least you admit your inability to be objective.
post #20 of 45
This is one of the DUMBEST decisions from a judge that i have ever heard of. If this applies to Apple, it should apply to Amazon too. Tax dollars at work. I wonder how much she got from Amazon for this outcome.
post #21 of 45
Quote:
Originally Posted by jragosta View Post

Why is it a bad example? Her decision makes it impossible for any publisher to get a better deal for several years.

Here's a summary of the appeals issues:
http://tech.fortune.cnn.com/2013/07/10/apple-ebook-verdict-appeal/

Because how often does Apple give concessions?
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #22 of 45

I'm not a lawyer but after reading this all seem pretty legit and acceptable for Apple.

Only the MFN is now forbidden for E-Book and Agency model is in no way endangered.

 

Also monitoring seems to be there only to ensure Apple won't be the middle-man between all publishers.

 

Apple now have two options : live with it or appeal.

 

But what is really fun now is that they might accept theses terms and then in a totally "business-safe" way launch an antitrust complaint against Amazon...

post #23 of 45

These comments are quite shameful. Apple should not enforce MFN as well as take 30%, it's just a joke and one of the reasons you get stupid situations like magazine subscriptions being so expensive on the iPad for digital, but cheaper to get the hard copy PLUS digital.

 

It's also hurting the Mac app store.

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post #24 of 45

Our law schools unfortunately produce business illiterates that rule on business matters. Cote is Exhibit A.

 

What a travesty.

post #25 of 45
Quote:
Originally Posted by dasanman69 View Post

Because how often does Apple give concessions?

1) We don't know.

 

2) That is not the legal point.

post #26 of 45
Quote:
Originally Posted by dasanman69 View Post



Because how often does Apple give concessions?

They obviously have. Sometimes it's because the technology has changed. Sometimes it's just a response to market changes.

How often they give concessions is irrelevant. Legally, Judge Cole just ruled that if Apple gives one publisher a deal, that they have to wait years before other publishers can have the same thing. That's extremely anticompetitive.
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post #27 of 45
Quote:
Originally Posted by jragosta View Post

They obviously have. Sometimes it's because the technology has changed. Sometimes it's just a response to market changes.

How often they give concessions is irrelevant. Legally, Judge Cole just ruled that if Apple gives one publisher a deal, that they have to wait years before other publishers can have the same thing. That's extremely anticompetitive.

I said I agreed with your point, but Apple doesn't make it a habit of giving concessions which is why I said it was a bad example.
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #28 of 45
Quote:
Originally Posted by jragosta View Post


They obviously have. Sometimes it's because the technology has changed. Sometimes it's just a response to market changes.

How often they give concessions is irrelevant. Legally, Judge Cole just ruled that if Apple gives one publisher a deal, that they have to wait years before other publishers can have the same thing. That's extremely anticompetitive.

 

 

I don't see anything like that in the actual injunction. Please provide quote and explain how you came to that conclusion.

 

Also it's specifically stated in provision III.E that Apple can use a Standard contract and inform the retailer that it a  standard contract.

This sound totally incompatible with your assertion, so please explain your point.

post #29 of 45

When Apple gets justice, this judge should be disbarred. Along with the DoJ being dismantled.

Originally posted by Relic

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Originally posted by Relic

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post #30 of 45
Quote:
Originally Posted by Twisell View Post


I don't see anything like that in the actual injunction. Please provide quote and explain how you came to that conclusion.

Also it's specifically stated in provision III.E that Apple can use a Standard contract and inform the retailer that it a  standard contract.
This sound totally incompatible with your assertion, so please explain your point.

I didn't read the actual injunction. I was replying to the AI article above:
Quote:
Under Cote's injunction, Apple will be required to stagger new contract negotiations with HarperCollins, Hachette, Simon & Schuster, Penguin, and Macmillan. Negotiations with Hachette would begin two years after the effective date of the final judgment, with Harper Collins negotiations commencing six months after that. Apple would be able to enter negotiations with Simon & Schuster, Penguin, and Macmillan successively every six months following.

So either it's a stupid order or stupid reporting.

ETA - it's bad wording. Read section IIIC. It basically sets different renewal dates for the different publishers. Of course, the wording of section IIIC is ridiculous, anyway. It says that Apple can't have an agreement that restricts Apple's ability to set or discount prices. So? That was never the issue.


BTW, another major flaw with the order just occurred to me. The order bars Apple from using a Most-Favored Nation clause for 5 years. Why for 5 years? Either it's legal or it's not. If it's legal, it shouldn't be barred. If it's not legal, it shouldn't be allowed after 5 years.

The only argument for it would be if Apple were the monopolist and were keeping other companies out. In that case, it might make sense to bar MFN clauses for some period to allow the competition to get established. But since Amazon had the near monopoly and Apple was the outsider, it makes absolutely no sense at all.
Edited by jragosta - 9/6/13 at 9:50am
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post #31 of 45
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Originally Posted by TexDeafy View Post

Wtf? Why are you mods/adm remove my post?! Don't "freedom to speech" ringing a bell??? Stop remove my damn post!

Freedom of speed applies only in a public forum. This isn't a public forum.

Read the terms of service.
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post #32 of 45
Quote:
Originally Posted by TexDeafy View Post

Wtf? Why are you mods/adm remove my post?! Don't "freedom to speech" ringing a bell??? Stop remove my damn post!

While profanity is allowed you used it excessively. Nothing wrong with voicing your displeasure just keep the curse words down.
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #33 of 45
The whole suit is wrong but it is based on long settled bad economic policy which has substantially contributed to the economic failure generally, IMNSHO.

Long ago, in the late '60s, we as a population decided that the primary task of the economy was cheap and plentiful goods -- that is a pure consumer economy. This policy virtually eliminated the vision of ourselves as people who produce things, instead we became a people who consumed things.

As a result, elimination of production was supported by the vast majority of people including those in government (the agencies, the courts, the legislatures, and the executives), as long as the result was cheaper and more.

The govt attack on Apple was the simple result of allowing the publishers to set the price of goods, which here resulted in increased cost to the consumer. An increase in consumer price is pretty much all it takes. Most comments on this site at the time was in agreement with the govt suit.

However, the narrow focus on consumer price means destruction of productivity and the creation of low price monopolies and elimination of jobs and minimization of value of work, and of course, the shipping of jobs overseas.
post #34 of 45
Quote:
Originally Posted by TexDeafy View Post

Wtf? Why are you mods/adm remove my post?! Don't "freedom to speech" ringing a bell??? Stop remove my damn post!

Quote:
Originally Posted by jragosta View Post

Freedom of speed applies only in a public forum. This isn't a public forum.

Read the terms of service.

Adding to JR's spot-on comment, before you lean on "freedom of speech" as permission to say whatever you wish you might familiarize yourself with some of the legal exceptions.
http://en.wikipedia.org/wiki/United_States_free_speech_exceptions
melior diabolus quem scies
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post #35 of 45
Quote:
Originally Posted by Tallest Skil View Post

When Apple gets justice, this judge should be disbarred. Along with the DoJ being dismantled.


HAHAHAHAHAHAHAHHAHAHA HAHAHAHAHHAHHAHHAH
BAHAHAHAHHAHAHH HAHAHA
post #36 of 45
Originally Posted by Potsie Webber View Post
HAHAHAHAHAHAHAHHAHAHA HAHAHAHAHHAHHAHHAH
BAHAHAHAHHAHAHH HAHAHA

 

Apple has done nothing illegal. Your problem is what, exactly?

Originally posted by Relic

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Originally posted by Relic

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post #37 of 45
Quote:
Originally Posted by Tallest Skil View Post

Apple has done nothing illegal. Your problem is what, exactly?

Regardless of whether they did anything illegal or not they were found guilty.
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #38 of 45
Originally Posted by dasanman69 View Post
Regardless of whether they did anything illegal or not they were found guilty.

 

So far.

Originally posted by Relic

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Originally posted by Relic

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post #39 of 45
Quote:
Originally Posted by jragosta View Post

Freedom of speed applies only in a public forum. This isn't a public forum.

Read the terms of service.

Quote:
Originally Posted by dasanman69 View Post

While profanity is allowed you used it excessively. Nothing wrong with voicing your displeasure just keep the curse words down.

Quote:
Originally Posted by Gatorguy View Post


Adding to JR's spot-on comment, before you lean on "freedom of speech" as permission to say whatever you wish you might familiarize yourself with some of the legal exceptions.
http://en.wikipedia.org/wiki/United_States_free_speech_exceptions

Due to this thingy above.. I had to censor my swears.

WT(Bleep) (Bleep) you, Judge Cote! Keep your (bleep) (bleep) nose out of Apple's (bleep) business! Oh and (bleep) you, AG Holder! I'm getting sick of DOJ and our lawmaker corruption crap! LOL

Please excuse my lame English grammar. American Sign Language is my first language and English's the second.
Tallest Skill, you can edit my English grammar for me. My English grammar sucks! lol

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Please excuse my lame English grammar. American Sign Language is my first language and English's the second.
Tallest Skill, you can edit my English grammar for me. My English grammar sucks! lol

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post #40 of 45
Any chance you could make a point without swearing. You are more concerned about how your swearing is censored, than you are about making a point.
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