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Apple wins temporary reprieve from monitor in e-books antitrust case - Page 4

post #121 of 190
Quote:
Originally Posted by leavingthebigG View Post


Did Judge Cote explain why she ultimately decided to remove the ex parte meetings motion?


She just mentioned that Apple filed a particularly strong objection. I can look for more info if you like but I'm not sure where you're going with this line of questioning.

post #122 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 

Right a resistive touchscreen. I never claimed it had a capacitive screen. It was just a touch screen with a virtual keyboard, a similar model to what Apple used. Nor did I claim it was good, because it wasn't.

 

No it wasn't, because it didn't have multitouch, the screen could only respond to one touch at a time.

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post #123 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 

 

Apple certainly should have the right to appeal any ruling, but in this case I find it extremely hard to believe they will prevail. The attitude seems to be that they have done no wrong therefore they should escape any repercussions.

 

 

The problem with that is that until the ruling is overturned, Apple did indeed do wrong and cannot expect to prevail with an attitude that they should not be held accountable.

 

 

This attitude is silly. Apple clearly thinks it did not do anything wrong. If that is the case, why would Apple act as if it thinks it did something wrong? If you are found guilty of a crime you did not commit (which happens all the time) are people wrongly convicted supposed to lie and feign contrition for something they did not do? Speaking out against a wrong be damned the consequences is a strong character trait. 

 

Further, the whole case stunk against Apple, and the Judge did in fact display bias before the case was heard. Here is a Reuters article where the paper reports on how the Judge claims in a pretrial hearing she believes the evidence viewed to date leads her to think Apple likely is guilty. 

 

The trial itself was a joke. The governments case relied heavily on Thomas Turvey's testimony, director of strategic relationships for Google. Turvey claimed publishers told him Apple forced them to adopt a pricing model that would result in higher book prices. On the stand, however, Turvey could not remember the  name of one publishers. Further, he provided a written declaration to the government outlying what he supposedly heard from the publishers. Under oath, however, he admitted his lawyer wrote what was supposed to be Turvey's statement of what he heard.  The Judge, herself, found the evidence to be reliable while allowing a whole bunch of other government evidence, such as alleged quotes from Jobs who was not there to testify. She also disallowed a whole bunch of Apple evidence. The Google executives testimony stunk of a competitor trying to lash out at Apple because he could not remember anything on the stand. 

 

Moreover, the Judge appointed a personal friend who by his own admission has no anti-trust experience. So, in effect Apple in essence has to pay double the amount to be monitored. Why wouldn't the judge actually hire an anti-trust law expert to be the monitor? Duh. Perhaps it is because the Judge and the Monitor have a long history. She was responsible for him being appointed to the Department of Justice despite him having a conflict of interest. It was her letter that got him the appointment. Further, the Judge and the Monitor had ex-parte communications regarding the case before she appointed him monitor and wanted to continue such communications after she appointed him despite the fact she is still involved in other aspects of this case. 

 

 

Finally, as I said this whole case against Apple was rotten. Apple had no monopoly power. Amazon does have monopoly power. Amazon used its power to force publishers to abandon their tiered pricing model. When a new book came out, publishers would first release it in hardcover, then months later softcover. This allowed it to charge more for the hardcover and recoup its costs before releasing a soft cover version. Movie distributors do the same thing. The publishers wanted to do the same thing with eBooks. Namely, release them months after hard cover books are released. Amazon, however,  essentially told publishers we will not carry your hardcover books if you do not give us access to eBook version at the same time as the hard cover books. That would have killed publishers so that had to bend to Amazon's will. Amazon then undercut the price of the hardcover books essentially burying the market for hardcover books. The result was Amazon quickly gained a 90 percent monopoly on eBooks. That is classic anti-trust abuse 101. Yet, Amazon escaped unscathed. Apple's deal with publishers benefited the whole industry (e.g. Barnes and Noble and Apple picked up share) and on a whole actually lowered the price of Ebooks (with the exception of New Releases). 

 

The trial also showed it was not Apple's idea to switch to the agency model. Barnes and Noble and the publishers were already discussing this. Apple essentially was the beneficiary of the publishers hatred of Amazon. Apple, however, was not a player in the market, so it had no monopoly power to force publishers to do anything. Moreover, normally when anti-trust matters are at issue it involves one of two scenarios. First, a company with monopoly power using its power in one market to force others to help it gain footing in another market to the detriment of competitors in the other market. For example, Microsoft forced hardware manufacturers to adopt Microsoft Explorer or lose discount pricing on WIndows. This allowed Microsoft to use Windows to steal Netscape's market share. Apple had zero market share when it came to books, and had no power to force publishers to do anything. Second, competitors in a certain market get together to fix prices so competitors do not have to compete on price. That is what LCD displays companies got caught doing (e.g. Samsung, LG, etc.). Apple does not compete with publishers, and any agreement with them was not collusion. Had Apple made the deal directly with Amazon, that would have been a different matter. 

 

Apple likely was a victim of strong Amazon lobbying ties with the government. I also do not understand why Apple went with a Judge trial. It should have known the Judge was known to make up here mind early and favor the government. 

post #124 of 190
Quote:
Originally Posted by hill60 View Post
 

 

No it wasn't, because it didn't have multitouch, the screen could only respond to one touch at a time.


Sure, but it's a very hard claim to make that going from a direct interaction touch screen to a direct interaction multitouch screen is complete invention from scratch. The whole point of what I have been saying is that the Windows Mobile smartphones and indeed the first iPhone are 'proto-smartphones' by todays standards. I agree that multitouch forms part of the key components for a modern smartphone but so does wireless sync and installing apps. I honestly don't understand why some posters find this such a contentious issue. Do people really believe that the iPhone was something nobody else had considered in the industry? In reality Apple were the only people who could make an iPhone due to their position and power.

post #125 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 

 

It seems like it was just a way of ensuring that the court was kept up to date but without adding a bunch of hassle to the schedule and lawyers. Apple seems to think that this is dangerous and insidious but I really don't understand what exactly they're afraid of. From my reading it sounds like he was going to appear, say "Yeah all going fine, they're working on the new policies now" and bugger off.

 

IANAL though, and I am not based in the US, so it's certainly possible I have misunderstood, don't take my word as gospel.

 

 

Ex-Parte communications are generally frowned on in legal matters. The fact is Judge Cote is still preceding over several legal matters related to this case. She is supposed to be an unbiased fact determiner. Yet, she is going to allow herself to have ex-parte communications with the monitor, her friend, who Apple clearly is not happy to have. Yes, those one sided communications that Apple would not be privy to surely wouldn't taint the Judge's position on matters. 

post #126 of 190

Well, this has been fun,

but enough has been said-

Time for the BLOCK

And off with his head.

That a chance has been given

Cannot be disputed.

The dude is driven

By rocks in his head.

When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

Reply

When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

Reply
post #127 of 190
Quote:
Originally Posted by TBell View Post
 

 

 

This attitude is silly. Apple clearly thinks it did not do anything wrong. If that is the case, why would Apple act as if it thinks it did something wrong? If you are found guilty of a crime you did not commit (which happens all the time) are people wrongly convicted supposed to lie and feign contrition for something they did not do? Speaking out against a wrong be damned the consequences is a strong character trait.

 

I'm confused as to why you'd think I'm saying Apple should act with contrition. I'm not, the first sentence states clearly that they absolutely should have every right of appeal, ie to maintain their pledge of innocence.

 

What I was discussing was repercussions, while you can still maintain you are innocent, you cannot decide that you get to stay out of jail until such time as your guilt is proved to your own standards. This is what I am saying, I hope that's more clear now. I didn't feel it was needed to respond to a couple of the paragraphs that follow. I am not about to give my opinion on who is a credible witness at a trial in a foreign country, but I certainly have reviewed as many filings as I can and regardless of testimony the emails and agreements originating from Apple seem fairly damning to me.

 

Quote:
Finally, as I said this whole case against Apple was rotten. Apple had no monopoly power

A quick aside here. As far as I am aware the laws here do not require any monopoly power in order to prohibit actions.

 

Quote:
 Amazon then undercut the price of the hardcover books essentially burying the market for hardcover books. The result was Amazon quickly gained a 90 percent monopoly on eBooks. That is classic anti-trust abuse 101. Yet, Amazon escaped unscathed.

The reason Amazon escaped unscathed here is that their eBooks department overall still made a profit. That is, they weren't engaging in predatory pricing, they were using a tactic known as a loss-leader. This is perfectly legitimate and not a violation of anti-trust law (as I understand it!)

 

Quote:
 The trial also showed it was not Apple's idea to switch to the agency model. Barnes and Noble and the publishers were already discussing this. Apple essentially was the beneficiary of the publishers hatred of Amazon

I agree this is the case, but remember that all of those publishers already came before the court and settled. Apple is simply the last of the bunch and the only one to continuously maintain its plea of innocence.

 

Quote:
 Second, competitors in a certain market get together to fix prices so competitors do not have to compete on price. That is what LCD displays companies got caught doing (e.g. Samsung, LG, etc.). Apple does not compete with publishers, and any agreement with them was not collusion. Had Apple made the deal directly with Amazon, that would have been a different matter. 

As I understand it, the requirement for illegal conduct is that there be a price fixing conspiracy, be that in competition or not. Apple can certainly be argued to have colluded with the publishers, and certain statements indicate that they were aware of the tenous legal ground.

 

Quote:
 Apple likely was a victim of strong Amazon lobbying ties with the government. I also do not understand why Apple went with a Judge trial. It should have known the Judge was known to make up here mind early and favor the government. 

This is a pretty cynical view, but it's Apple's mistake to make really. I am nowhere near the US courts system so I couldn't possibly comment on likelyhood or lobbying. I think it's pretty unlikely though, but that's just an opinion.

 

Thanks for the well thought out and coherent reply. I got so mobbed when I started posting that it's good to be able to have a calm discussion.

post #128 of 190
Quote:
Originally Posted by dstarsboy View Post
 

There is plenty of evidence that supports Apple's "price-fixing" scheme actually de-monopolized the Amazon "sell-at-a-loss" strategy, allowed new entries like the Nook to be somewhat profitable, etc, turning a 1 horse e-book race into a healthy competitive eco-system.

 

Now the nook is dead, authors are paid less for their content and anyone looking to enter this arena can't compete with Amazon.

 

The price of ebooks never rose, the level of discounts decreased.

 

Apple should pay the publishers a fixed price outside the US for exclusive access all their works then parallel import them and give them away for free.

 

F*ck the USA's communist policy of government mandated pricing on non essential items.

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post #129 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 

The burden of proof was on the Prosecution. They managed it. What Apple did wrong was to organise a horizontal price fixing conspiracy.

 

Because Apple objected to the other candidate much more strongly, and Bromwich has carried out extremely high level monitorships before.

 

I didn't do either of these things. Please don't make up lies about me.

 

I'm uh, British, so no to the last few. I don't have anything against Apple. On the contrary I find them to be one of the most advanced companies technologically. They pushed 64 bit ARM before anyone else. They push manufacturing technology right to the limit.

 

I'm here because I'm interested in the future of Apple. I didn't defend 'Google stealing'. I can't even stand most of Samsung's products. Maybe before you accuse me you should bother to actually read what I am posting.

 

One perspective should be cleared up: British Law does not translate as well to American Law, especially US Corporate Law.

 

If you don't have much exposure to US Corporate Law then start reading up. Perceiving this case from UK eyes won't help your cause.

post #130 of 190

two main facts.

 

1. Currently Apple is guilty. They were found by a court of law to have broken the law.

2. Apple are appealing and have a stay until the appeal has been heard, until that appeal has been dealt with (and possibly and further appeals?) Apple are still guilty.

 

I have read this thread with fascination and much mirth, please keep it going. :lol:

post #131 of 190
Quote:
Originally Posted by TBell View Post
 

 

 

Ex-Parte communications are generally frowned on in legal matters. The fact is Judge Cote is still preceding over several legal matters related to this case. She is supposed to be an unbiased fact determiner. Yet, she is going to allow herself to have ex-parte communications with the monitor, her friend, who Apple clearly is not happy to have. Yes, those one sided communications that Apple would not be privy to surely wouldn't taint the Judge's position on matters. 

 

I believe you meant to say, ``...presiding over several legal matters related to this case.''

post #132 of 190
That damn judge threw the business to a personal friend. That's all I need to know. Crooks!
post #133 of 190
Quote:
Originally Posted by singularity View Post
 

two main facts.

 

1. Currently Apple is guilty. They were found by a court of law to have broken the law.

2. Apple are appealing and have a stay until the appeal has been heard, until that appeal has been dealt with (and possibly and further appeals?) Apple are still guilty.

 

I have read this thread with fascination and much mirth, please keep it going. :lol:

 

I'm not certain Apple is appealing the ruling of price fixing, but rather the punishment that is interfering with its ability to compete in a fair and open market.

post #134 of 190
Quote:
Originally Posted by d54664 View Post
 

After all, some patent office also ordered the import ban on some iPhones (or some other Apple crap) only to have the order overturned after Apple managers whined to Obama about it...

 

Actually it was anybody who was interested in maintaining standards and the agreements patent holders make to ensure those standards are available to all, on a fair, reasonable and non discriminatory basis.

 

Without a reliable standards based system there would be anarchy where nothing works with anything else.

 

Samsung was threatening that, so the decision was overturned.

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post #135 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 


Oh crikey I am not getting into this discussion here! There are ways to prevent media publication of things in the UK but they are rarely used and at least accountable to some oversight. It's a really complex and difficult topic with people who feel incredibly strongly. I've already taken enough abuse for one afternoon.

 

If you do want to discuss this though, PM me and I'll compare and contrast, although what's the whole 'In Prague' part about eh? Finally your secret identity exposed! :-p

 

In the UK, the US and Australia you mainly get to see what Rupert wants you to see, the Internet breaks media baron's hold on what we get to see.

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post #136 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 


Sure, but it's a very hard claim to make that going from a direct interaction touch screen to a direct interaction multitouch screen is complete invention from scratch. The whole point of what I have been saying is that the Windows Mobile smartphones and indeed the first iPhone are 'proto-smartphones' by todays standards. I agree that multitouch forms part of the key components for a modern smartphone but so does wireless sync and installing apps. I honestly don't understand why some posters find this such a contentious issue. Do people really believe that the iPhone was something nobody else had considered in the industry? In reality Apple were the only people who could make an iPhone due to their position and power.

 

Multitouch was as much an important innovation as 64bit.

 

They define modern smartphones now and into the future.

 

Single touch resistive screens were what Apple was doing in the early nineties with the Newton which not only introduced the term "PDA" but also influenced Apple to work with Acorn and set up ARM.

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post #137 of 190
Quote:
Originally Posted by hill60 View Post
 

 

Multitouch was as much an important innovation as 64bit.

 

They define modern smartphones now and into the future.

 

Single touch resistive screens were what Apple was doing in the early nineties with the Newton which not only introduced the term "PDA" but also influenced Apple to work with Acorn and set up ARM.


Not sure I agree they were as important, but I don't really have an argument with what you're saying. The fact is that I carried out many of the same tasks on my horrible HTC Wizard as I do on my Nexus 5. Functionally they're not far apart, what has changed massively is the quality of the interaction. Apple is responsible in big part to that but I feel that their competitors have also driven them to improve. Is this really a contentious topic? It doesn't seem it to me.

post #138 of 190

you know guys - including you who is trying to set a record for posts on a single thread (not really good manners to always want the last word every single time) - the appeals court will decide this issue, one way or the other, not us. i'll wait for that definitive analysis.

 

the real world problem is Amazon's very real undeinable monopoly power in the book world. they have been engaged in a classic "dumping" strategy, forcing prices down with their market control to levels that they know will put their retail compeition out of business. in the process publishers and authors also get whacked by Amazon of course.

 

the fact they have gotten away with this certainly strongly suggests political manipulation. has there been any detailed reporting on Amazon's influence in D.C.?

post #139 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 

The problem with that is that until the ruling is overturned, Apple did indeed do wrong and cannot expect to prevail with an attitude that they should not be held accountable.

 

They did not do wrong.

Don't take my word for it, take the word of your beloved judge in her ruling, here's an excerpt of her ruling, also known as :

 

Judge Denise Cote's Opinion & Order on the DOJ Witch hunt on Apple to reestablish Amazon's Monopoly

 
Bottom of page 157   ( emphasis mine )
 
    If Apple is suggesting that an adverse ruling necessarily
implies that agency agreements, pricing tiers with caps, MFN
clauses, or simultaneous negotiations with suppliers are
improper, it is wrong.  As explained above, the Plaintiffs have
not argued and this Court has not found that any of these or
other such components of Apple’s entry into the market were
wrongful, either alone or in combination
.  What was wrongful was
the use of those components to facilitate a conspiracy with the
Publisher Defendants.

 

Let me translate this for you, since Cote managed to obfuscate a very simple fact into an obtuse opinion piece. She candidly admits that she can't find any legal grounds to find Apple guilty of anything, but in her opinion decided that it facilitated other parties to do something wrong, therefore she can rule them guilty of … of … um … some kind of conspiracy I guess. WTF ?
 
This is even more surprising coming from a land where not a single gun manufacturer or association has been found guilty of facilitating the slaughter of children with military grade assault weapons, yet a successful company entering a new market with new competitive tools can be found guilty of enabling competitors to compete. The answer of course is that it interfered with the continuation of an unchecked monopoly favored by the DOJ. It is truly mind boggling.
 
Speaking of monopoly, it gets better (or sadder actually) one paragraph further  ( emphasis mine ) :
 
    While a Court must take seriously a prediction that its
decision will harm our nation’s economy, particularly when made
by skilled counsel on behalf of an esteemed company, it is
difficult to see how competition will be stifled by the ruling
in this Opinion
.  This Opinion’s findings arise from the
specific events that unfolded in the trade e-book market as 2009
became 2010.  It does not seek to paint with a broader brush.

 

Really ? Is it that difficult to see ? Maybe if we close our eyes to the bigger picture and focus on a very brief period of time, like say "as 2009 became 2010", this Court will not be found accountable for its shortsightedness. Granted she's just a legal civil servant currently assigned as a judge (even sadder) and clueless in business, but any savvy consumer can see what will happen when Amazon is allowed to crush the final remnants of what used to be a free market in publishing. Prices will indeed go up, they already have because of this ruling.

 

Every year, the “Library & Book Trade Almanac,” an authority in the field, reports annual sales by book category. It 2008, when Amazon had a lock on the market, it reported that the average price of an adult fiction e-book in the U.S. in was $8.71. In 2009, as more people self-published books, the average dropped to $8.21. In 2010, when Apple introduced its agency model for e-books, the price dropped 14 percent to $7.06. And when publishers were up and running against Amazon in 2011, the average price of an e-book sank by an astonishing 32 percent — to $4.83. “That’s a steal,” said Al Greco, a professor of marketing at Fordham University.

The almanac has yet to publish final figures for 2012. But Digital Book World Daily, another expert, reports that e-book prices for fiction in 2012 ranged from $4 to $7.

“My feeling is that the DOJ didn’t see these numbers,” said Greco.

Amazon’s bogus anti-Apple crusade - Salon.com

Quote:
Originally Posted by ItsTheInternet View Post
 

I doubt this will happen. Cote's opinion reads very well and the basis of her judgements also seems sound. I doubt anyone so far in this thread actually read her 64 page opinion filing.

 

I did, Apple comes across very badly in it, so I would not be cheerleading this at all. There's no evidence whatsoever of Cote being prejudicial, if there is I invite you to cite it.

 

You might have read your darling's 64 page opinion filing defending her buddy's appointment, but you either haven't read her other 160 page opinion piece masquerading as a court order, or then you just picked and chose the same facts that she did to come to the same prejudgement that fits your common narrative of Apple's manufactured guilt. I did read it, not all 160 pages though, and Cote comes across very badly in it, so I would not be cheerleading her at all, with a lot of evidence of being prejudicial, and well before she wrote it, even before the trial.

post #140 of 190

Way too many disturbing facts about this case.

 

1) The judge actually taking the time to JUSTIFY her wrong is a preemptive measure against any oversight action taken against her. she knows what she is doing. Of course she comes up roses and Apple is "the bad guy" in her written OPINION. And that's all it is.

 

I can see her abuse of power serving her very poorly in the near future.

 

2) Let's not forget, she was publicly stating Apple was guilty way BEFORE THE TRIAL ever began. There was no impartial judging. This was a woman on a mission, hoping to gain political capital of her own by nailing Apple to the wall.

 

3) It's not a light matter to have her ruling interrupted. Likely other judges without the same agenda are not seeing things similarly and don't want to risk putting themselves on the wrong side of good judgement.

 

4) The fact that the judge knows and has given Bromwich an appointed source of income in the  past is unsettling. Her meeting with him behind closed doors, in secret, with no accountability does more than raise an eyebrow.

 

5) The fact that Bromwich was forced to reveal his incompetence and yet be able to still charge fees for not only himself, but his support staff (to fill him on on the areas he is completely clueless about), is unbelievable. He actually stated his mission was to accrue income for himself and those people. The problem with this? The court did not rule Apple had to give this guy a job. They ruled he was to keep them accountable. that's it. He can do that for the minimum. And if he isn't qualified, they need to get someone else. simple as that.

 

6) The whole "trial" in itself proved nothing other than e-book sellers now had options from which to build pricing models and that they were no longer beholden to sell cheaper on Amazon, yet higher everywhere else. they could set their own prices instead of a retailer doing it for them in a self-serving manner to where amazon would be cheapest place to buy. Always - regardless of the financial loss to the publishers. THAT actually seems to be the part that needs looking into.

 

The judge probably expected Apple to feel the heavy handed sting of her fast and furious "ruling," with no budging on any requests whatsoever, while paying out the ying-yang to support this external monitor/wannabe czar. With such heavy measures and stonewall tactics, it's not hard to imagine a company simply caving so as not to bring more hurt upon itself. Bravo to Apple for standing up for their rights, for truth, and for fighting illogical abuse. It was very smart of them to go public to various news outlets in details concerning what was going on. Now the judge herself is feeling the pressure - and that's where it belongs.

 

It may be the Apple still has to have  monitor or some type of set up. but I doubt it will be what Cote envisioned. she was flat out wrong on too many levels. If there is justice in the justice system, her way is out the door. But, in the interest of maintaining respect for the office, she will be allowed to save face and apple will likely still have to comply with a lesser punishment. 

 

Then... hopefully she is quietly dismissed. 

post #141 of 190

....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

Inside Google! 

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....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

Inside Google! 

Reply
post #142 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 

I couldn't find any evidence for that other than the monitor being recommended by the Judge 19 years ago. A Judge appointing someone she has previously recommended for good work is not evidence of corruption

 

I disagree. The facts of the case might support Apple but as there has been a court ruling then stating it outright is at odds with the law. If the case gets overturned then perhaps you'll have a point.

 

I see so you didn't even bother to read the opinion. I don't think we can really discuss it any further when you're admitting to being intentionally ignorant and being very rude towards me. Good day.

I have read the opinion and it is a bunch of crap.  Cote came out before this case even went to trial and said apple was guilty.  She is a bias judge and her and bromwich are indeed friends.  She wrote him a glowing recommendation letter to get browich a job with the DOJ. She refused to listen to Phil Schiller's testimony and stated so in her ruling and called him an unreliable witness.  This case against apple stinks.  Of course the judge is going to support bromwich.  She put him there.  If she didn't she would have to admit she was wrong in the first place.  Bromwich didn't even follow the original ruling from Cote.  All of these things are fact.  Read the original case ruling.  She also changed the ruling after the trial, and started ex parte meetings with bromwich about his interviews with apple execs which she has no legal right to do.  Also she changed the original ruling to allow bromwich to conduct interviews of apple execs with no legal counsel present and then report back to her ex parte again with no representation for apple present and no minutes taken.  That is at odds with her original ruling at the conclusion of the trial.  Then when apple complained about bromwich she changed back to the original trial ruling and withdrew her ex parte meetings with browich in a court filing in december.  The judicial branch has no right to conduct investigations and yet that is what she is doing with bromwich, it is the purview of the executive branch to conduct investigations and enforce law.

 

You really need to read the entire trial before you just read one  filing by this crooked and incompetent judge to get the over all picture.

post #143 of 190
Quote:
Originally Posted by Jony0 View Post
 

 

They did not do wrong.

Don't take my word for it, take the word of your beloved judge in her ruling, here's an excerpt of her ruling

"beloved"? Really? I quote her a few times and point out she's the Judge in the trial, not the Plaintiff and suddenly I'm in love with her? I think not.

 

Quote:
 Let me translate this for you, since Cote managed to obfuscate a very simple fact into an obtuse opinion piece. She candidly admits that she can't find any legal grounds to find Apple guilty of anything, but in her opinion decided that it facilitated other parties to do something wrong, therefore she can rule them guilty of … of … um … some kind of conspiracy I guess. WTF ?

You're reading the wrong section. This is the section about Apple's arguments. You'll see in literally the next sentence you quoted what Apple did that was illegal. The grounds and legal standard begins on page 104.

 

Quote:
 Speaking of monopoly, it gets better (or sadder actually) one paragraph further

You dismiss this section outright, despite its considerable justification elsewhere. You also ignore the fact that price rises were part of the main substantive discussion with Apple. In fact I'm not even sure what your argument is, if Apple's deal truly had resulted in a dropping of prices as you claim, why is there no evidence entered for this in the trial? Was it suppressed? Where is it?

 

Quote:
You might have read your darling's 64 page opinion filing defending her buddy's appointment, but you either haven't read her other 160 page opinion piece masquerading as a court order, or then you just picked and chose the same facts that she did to come to the same prejudgement that fits your common narrative of Apple's manufactured guilt. I did read it, not all 160 pages though, and Cote comes across very badly in it, so I would not be cheerleading her at all, with a lot of evidence of being prejudicial, and well before she wrote it, even before the trial.

 

Now it's 'darling' is it? I'd really appreciate it if you kept me out of weird fantasies like this. What prejudice have I displayed? Apple's guilt is currently being appealed. Just because you dislike a judicial decision doesn't mean you can pretend it doesn't exist.

 

I am not really here for debate, but it seems I've been shoved into a corner. Even if that is the case, I'm not about to continue replying to such brazen insults, so please bother to read these things completely and present evidence clearly. All the legal standard you need starts at page #104.

post #144 of 190
Quote:
Originally Posted by Mechanic View Post
 

Of course the judge is going to support bromwich.  She put him there.  If she didn't she would have to admit she was wrong in the first place.  Bromwich didn't even follow the original ruling from Cote.  All of these things are fact.  Read the original case ruling.  She also changed the ruling after the trial, and started ex parte meetings with bromwich about his interviews with apple execs which she has no legal right to do.  Also she changed the original ruling to allow bromwich to conduct interviews of apple execs with no legal counsel present and then report back to her ex parte again with no representation for apple present and no minutes taken.  That is at odds with her original ruling at the conclusion of the trial.  Then when apple complained about bromwich she changed back to the original trial ruling and withdrew her ex parte meetings with browich in a court filing in december.

 

You really need to read the entire trial before you just read one  filing by this crooked and incompetent judge to get the over all picture.

What's funny is that this isn't at all what happened. The order she proposed was objected to by Apple and then never passed. They got confused and abandoned this argument already. You could at least read her explanation because it does cover all of this.

 

I don't think that's asking too much, and I don't think I'm being unreasonable by asking.

post #145 of 190
Quote:
Originally Posted by mdriftmeyer View Post
 

 

I believe you meant to say, ``...presiding over several legal matters related to this case.''

Yes, that is auto correct in action. I was in a hurray, and did not proof read. 

post #146 of 190
Quote:
Originally Posted by TBell View Post
 
Quote:
Originally Posted by mdriftmeyer View Post
 

 

I believe you meant to say, ``...presiding over several legal matters related to this case.''

Yes, that is auto correct in action. I was in a hurray, and did not proof read. 

 

Quite understandable. Nearly everyone was in a hurray over this decision.

post #147 of 190
Quote:
Originally Posted by ItsTheInternet View Post

There's no evidence whatsoever of Cote being prejudicial, if there is I invite you to cite it.

She was pretty open about saying the DOJ would have no issue proving their case, before the trial even started. That might be enough to get the whole thing tossed to a new trial. Appellate courts don't generally like even a whiff of possible prejudice. Her comments, combined with possible cherry picking of testimony to back her opinion and then her refusal to make Bromwich back off his tactics and fees (not to mention naming someone with zero knowledge of antitrust law) may be enough for the panel to say that things seem off. Certainly there was enough to make them review it now that Apple has properly danced the required dances with Cote.
post #148 of 190
Quote:
Originally Posted by ItsTheInternet View Post

The burden of proof was on the Prosecution. They managed it. What Apple did wrong was to organise a horizontal price fixing conspiracy.

There was zero firm evidence of that.

Apple was accused of thinking up this game of getting all the publishers to ban together to fix Ebook pricing at a particular level, using particular terms and force all other retailers to use the same.

The DOJ never produced a smoking gun that this was the timeline. They had one email from Steve Jobs to one publisher. Not to all of them. One email in which he spelled out the options and mentioned the other big publishers had already signed on to Apple's terms. Terms which gave the publishers pricing control, with limits to keep them from going to high. Terms which never said anything about their dealings with other places like Amazon other than the MFN clause which even Amazon requires and Cote said was legal. But one email to one party does not a conspiracy make.
post #149 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 

 

I'm confused as to why you'd think I'm saying Apple should act with contrition. I'm not, the first sentence states clearly that they absolutely should have every right of appeal, ie to maintain their pledge of innocence.
What I was discussing was repercussions, while you can still maintain you are innocent, you cannot decide that you get to stay out of jail until such time as your guilt is proved to your own standards. This is what I am saying, I hope that's more clear now. I didn't feel it was needed to respond to a couple of the paragraphs that follow. I am not about to give my opinion on who is a credible witness at a trial in a foreign country, but I certainly have reviewed as many filings as I can and regardless of testimony the emails and agreements originating from Apple seem fairly damning to me.

Yes, except as a lawyer, I can assure you that you are wrong. It is fairly common in the United States in matters such as these for a Judge to Stay any legal punishment until appeal options are exercised. If the initial Judge does not grant a stay, it is fairly common on the appeal level. It is interesting that the paragraphs you elected to ignore are the ones that illustrate the Judge's bias. As far as the emails go, you don't provide examples. I find that the emails vindicate Apple. Especially the emails between Jobs and James Murdoch. That email exchange illustrates that Apple was negotiating the contracts individually, that Apple had no market power, that James Murdoch was holding out, and Apple was negotiating in good faith. 

 

 

Quote:
A quick aside here. As far as I am aware the laws here do not require any monopoly power in order to prohibit actions.The reason Amazon escaped unscathed here is that their eBooks department overall still made a profit. That is, they weren't engaging in predatory pricing, they were using a tactic known as a loss-leader. This is perfectly legitimate and not a violation of anti-trust law (as I understand it!)

 

I already explained that anti-trust has to either be based on collusion amongst  competitors or monopoly abuse. Assuming arguendo that Apple colluded with the publishers, which Jobs emails suggest was not the case, the publishers were not Apple's competitors. Amazon and Barnes and Noble were. If anything, the publishers would have been found guilty of collusion, not Apple. In the US, profit has nothing to do with whether a practice is a violation of anti-trust laws. Selling a product at a loss is fine as a loss leader only if the competitors are on relatively equal footing. Amazon, however, could not afford to sell eBooks at a loss if it were not for its monopoly power in online traditional book sales. It essentially used its dominance in one market to take over another market. This is the same thing Microsoft was found guilty of doing. It had a monopoly in computer operating systems. It wanted to become a player in the internet browser market where it's competitor Netscape controlled the market. Microsoft forced hardware manufacturers by wielding its market power to install Explorer for free at the expense of Netscape's paid software. Microsoft could not have accomplished that if it were not for its Window operating system and Office software monopolies. As the Court found, that behavior was illegal. Amazon is doing the same thing. Using its market power in one market to force publishers to help it gain market share in another market at the expense of its competitors. That is a textbook violation of anti-trust law. It is shameful the Justice Department went after Apple and the publishers when the switch to the agency model on a whole drove prices down and enhanced competition. 

 


 

Quote:

As I understand it, the requirement for illegal conduct is that there be a price fixing conspiracy, be that in competition or not. Apple can certainly be argued to have colluded with the publishers, and certain statements indicate that they were aware of the tenous legal ground.

 

Again, an example of collusion is when LG, Samsung, and some other LCD companies all got together in secret and agreed not to undercut each other on price. Those companies were competitors, and the actions drove prices of LCD panels up. Apple was not in competition with the publishers, the agency model on a whole drove prices down, and the emails show Apple negotiated the contracts individually. 


 

Quote:

This is a pretty cynical view, but it's Apple's mistake to make really. I am nowhere near the US courts system so I couldn't possibly comment on likelyhood or lobbying. I think it's pretty unlikely though, but that's just an opinion.

 

LOL. you clearly are not from this Country. I do not suggest the Judge was bribed in anyway. Instead, I suggest lobbying pursued the Department of Justice to charge Apple and not Amazon. From my own personal experience, I also suggest that most Judges have a built in bias that favors the government that pays their salary. Favoring the government often leads to promotions, and Judges tend to have regular interactions with government lawyers. I also think the Judge in this case got caught up in Jobs claiming Apple's deal will make the price of some EBooks go up. She, however, failed to consider that Amazon was causing the price of books to be artificially low which in the long term could not be sustainable, and the switch to the agency model lowered prices on a whole and increased competition. 

post #150 of 190
Quote:
Originally Posted by ItsTheInternet View Post


Apple has been found guilty by the courts.

And over the years a number of folks have been found guilty of murder, imprisoned and even executed, only to later have it proven they were not guilty.

A verdict doesn't always equal truth.
post #151 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 


Sure, but it's a very hard claim to make that going from a direct interaction touch screen to a direct interaction multitouch screen is complete invention from scratch. The whole point of what I have been saying is that the Windows Mobile smartphones and indeed the first iPhone are 'proto-smartphones' by todays standards. I agree that multitouch forms part of the key components for a modern smartphone but so does wireless sync and installing apps. I honestly don't understand why some posters find this such a contentious issue. Do people really believe that the iPhone was something nobody else had considered in the industry? In reality Apple were the only people who could make an iPhone due to their position and power.

 

Yes, I believe nobody else considered anything like the iPhone. Blackberry's CEO thought the iPhone demonstration was faked. Microsoft's Balmer laughed, and said the phone was doomed to fail.  The truth is that Microsoft, Nokia, Samsung, and Motorola had the resources to make an iPhone like phone. The companies, however, were too busy protecting their turfs, lacked the vision, and would have been unwilling to bet the company like Apple was willing to do. 

post #152 of 190

What a wasted thread. While it's good to see people trying to set facts right, this thread went downhill quickly and never came up again.

 

I'll admit I went through all 5 pages. It's  like an accident.... I try hard to look away but I can't. Does @ItsTheInternet ever sleep? He/ She's ruffled quite a few feathers and seems to respond to every post. It's like Bizzaro TS.

post #153 of 190
Quote:
Originally Posted by charlituna View Post

The DOJ never produced a smoking gun that this was the timeline. They had one email from Steve Jobs to one publisher. Not to all of them.

 

The "one email" you refer to was a draft which wasn't sent to anyone.

 

Unfortunately the writer was unavailable for questioning regarding the email's possible intent.

 

It didn't stop that stupid moll of a judge from accepting it as an infallible proof in her kangaroo court.

 

The appeal should be interesting, to say the least.

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post #154 of 190
Maybe, when this appeal is over, it will be time for the Judge & Bromwich to get their Cotes & leave permanently. 1biggrin.gif

Sorry, just couldn't resist that.
post #155 of 190
Quote:
Originally Posted by BestKeptSecret View Post
 

What a wasted thread. While it's good to see people trying to set facts right, this thread went downhill quickly and never came up again.

 

I'll admit I went through all 5 pages. It's  like an accident.... I try hard to look away but I can't. Does @ItsTheInternet ever sleep? He/ She's ruffled quite a few feathers and seems to respond to every post. It's like Bizzaro TS.

 

The irony is that most of what's been said here is wrong. In fact even resident lawyers have according to Judge Cote, completely misworded reality. I was asleep while you posted, and all I did was post a few times in a few hours.

 

This forum is incredibly hostile to anyone with dissenting opinions. Pretty weird.

post #156 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 
Quote:
Originally Posted by BestKeptSecret View Post
 

What a wasted thread. While it's good to see people trying to set facts right, this thread went downhill quickly and never came up again.

 

I'll admit I went through all 5 pages. It's  like an accident.... I try hard to look away but I can't. Does @ItsTheInternet ever sleep? He/ She's ruffled quite a few feathers and seems to respond to every post. It's like Bizzaro TS.

 

The irony is that most of what's been said here is wrong. In fact even resident lawyers have according to Judge Cote, completely misworded reality. I was asleep while you posted, and all I did was post a few times in a few hours.

 

This forum is incredibly hostile to anyone with dissenting opinions. Pretty weird.

 

It can be a little hostile, but it is also important to pay attention to whether you really are just expressing an opinion, rather than asserting that you are presenting fact. It appeared to me that you strayed the wrong side of that line.

post #157 of 190

Great points Tbell. 

 

What the judge also said at trial or in her decision was in a nutshell that even if Amazon was using its monopolistic power to keep others out of the market, it doesn't give Apple the right to break the law to right the wrong. I agree with that statement but it also goes to the point that Amazon was abusing its position. Judge Cote also states in this current Opinion, regarding the Monitor, that since its already past the 90 day window o when apple has to comply (ala Jan 14th) then its all moot. Thus, we should just discard what happened and skip it since in the past. Way to gloss over the facts to justify your means. 

 

I did read the opinion last night.  A legal opinion is written to justify your judgement. Thus, whatever it says is going to fit what she wants to have happened. It may contain legal precedent and arguments but that's not to say that there aren't the same that can be used by Apple for appeal of her ruling.  

 

When discussing the role of the monitor, she states that her goal was to not have to appoint a monitor at all. She states that this was discussed with Apple and DOJ in meeting that took place after She found Apple Guilty in the trial phase.  This was a conference held in late July. Next meeting was set for August 9th. 

 

At that Aug 9th meeting, Judge Cote states how upset she was that Apple was not taking seriously the price fixing conspiracy it orchestrated. Nor did Apple provide any written documentation showing it has reformed its anti-trust practices.... Apple stated it had made changes to its compliance program during the trial (i.e. before anything was mandated). She states that she wanted a presentation by Apple showing that a monitor wasn't necessary, even though Apple stated this point prior. She was mad that:

 

Quote:
 There is no admission of wrongdoing.There is no contrition. There is no showing of any awareness of illegality or
the danger of collusion by publisher defendants to raise eBook prices. There is no showing of institutional
reforms to ensure that its executives will never engage again in such willful and blatant violations of the law.
 

 

So lets see. She gave Apple a whopping 2 weeks between meetings and since Apple didn't come back with a whole anti-trust reform plan/package setup and ready to present, she used this as a reason why a monitor then had to be appointed. Then she is mad that Apple hasn't admitted wrongdoing she uses this for further justification of a monitor. REALLY??? Apple has stated from the start they did nothing wrong.  Lets not forget that, if they did something wrong, or wanted to pay the least amount of $$, they could have avoided the trial and settled like the publishers. Don't take a settlement strictly as a sign of guilt. Companies settle every day, even if they are innocent, since the cost of settlement far outweigh the costs to go to trial.  This happens with  numerous class action cases. 

 

Apple also stated the second they were found guilty they would appeal, since they did nothing wrong. As TBELL has stated above, there was nothing wrong with what Apple did being a vertical player. Apple, also states they never conspired and the evidence presented in court showed that for anyone who followed this day by day. If Apple were to admit guilt now and show contrition, they would then be saying they were guilty. Sort of puts a crimp in the appeal. This is the same as an innocent person being convicted of murder and then getting angry that they show no remorse.  

 

Further in the opinion, it states what she claims were meetings that discussed the role of the monitor. The purpose of the monitor was to be narrow in scope. The monitor will NOT be charged with assessing Apple's compliance generally with the terms of the judgement.  The monitor function will evaluate Apple's internal Antitrust compliance program and training program.  She then states that the monitor agreement stated that the monitor would have access to "any" employee and be able to copy "any" document.  In her opinion, she then basically states that "any" allows Bromwich to interview anyone at Apple and can copy any documents. I'd imagine Apple agreed to the terms of the monitor in that these conditions were tied to the scope of the Monitors mission, i.e. evaluate the Antitrust compliance program and training program.  Not giving card blanch to copy any internal documents, outside the scope.  Not that this has happened but in her opinion she makes justification for all of Bromwich's requests in that they all fall under the scope of "any" document or "any" person.  Reading this it seems the "any" was a trojan horse giving license to view anything or see anyone. 

 

The next joke in her opinion is the process for selecting of the Monitor. The DOJ would propose candidates. Apple would have the opportunity to object to the candidates. According to this opinion, Apple was given a whopping 2 names. One of those two was Bromwich. The DOJ also stated that he should be assisted by Bernard Nigro. Apple objected to both Bromwich and the other candidate. Apple stated that the objection for Bromwich was the dual monitorship. Nigro was already an anti-trust lawyer so way the need to also have Bromwich. She speeds right by that point and never gives an opinion as to why it was necessary.  

 

Bromwich stated that he wanted to get off to a fast start.. That, for all of his other monitorships, he was on the job within two weeks. However, my big question is what was his role in regard to those monitorships and did they differ then what was required here. For example, if he was to oversee compliance in those other monitorships that differs from this role here where he is just overseeing the "program" itself. Now Judge Cote states that when she/DOJ interviewed Bromwich, they told him that his responsibilities start right away (Closed session. Apple was not at this Interview). As she states in her opinion, the Monitor was hired in October so they should be off and running and not have to wait around 90 days. But... this is contradictory to what she stated at the onset of mandating a monitor. The following is part of a letter, from apple's council to Bromwich.

 

The monitor’s primary responsibility is to “conduct a review . . . [of] Apple’s internal antitrust 
compliance policies and procedures, as they exist 90 days after his or her appointment” and 
to “also conduct a review to assess whether Apple’s training program, required by Section 
V.C of this Final Judgment, as it exists 90 days after his or her appointment, is sufficiently 
comprehensive and effective.” Final Judgment at § VI.C (emphasis added). 
During the August 27 hearing Judge Cote explained, “I don’t think that the [Monitor] 
should conduct a review or assessment of the current policies. I would expect that Apple 
would revise its current policy substantially and procedures and create an effective training 
program. That will require some time. So I think this should be revised to have the 
[Monitor] doing an assessment in three months from appointment and beginning to engage 
Apple in a discussion at that point.” Aug. 27, 2013 Hearing Tr. at 20-21(emphasis added).

 

Then in a further twist to justify Bromwich's actions, her opinion says that while Apple was stating that the process shouldn't begin until after the 90 day period, they (Apple) choose to allow interviews and schedule others. Thus, Apple should have no claim or issue with Mr. Bromwich's actions. What!!! 

 

Now I read the letters back and forth, which are posted on the DOJ site and for the most part they are all cordial. I see nothing wrong with Apples responses or actions. Mr Bromwich actually sends off the 1st scathing letter and then tempers die down.

http://www.justice.gov/atr/cases/f302600/302674.pdf  

 

Then, to justify things, Judge Cote says its now 90 days later and thus, the prior arguments are all moot. Thus, nothing further to discuss here. 

 

I would also like to know why Bromwich's fee's were not determined prior to the start. Basically he went off and running and from what I gather in the letter exchange, he never ascertained from the DOJ if this was acceptable. To his credit, he did state in the latest of letters that he was willing to work out an amicable fee structure. 

 

"Ex Parte"

The court issued an order on Nov 20th, which was an amendment to the order of Oct 16, which created the monitorship, and proposed that the Monitor could brief the court "ex parte" and orally at least once a month. Order was submitted on Nov 20th. Apple objected Nov 27th. On Dec 2, the court enacted another rule withdrawing the "ex parte" provision, in regard to Apples objection.  The Judge claims, in her darling court opinion,  that the "ex Parte" was not as apple claims, the ability to meet without council present but was the traditional meaning of the term in that the plaintifs (DOJ) can meet with the judge once a month without Apple or its council present. However, the problem with that assertion is that the Nov 20th proposal clearly states that the "ex parte" is in reference to the "Monitors" communication with the court, not the plaintiff.   Nice trying to double-speak Cote. I believe this part right here is the primary reason why the appellate court took the case.  

 

Here is a copy of that "Ex Parte" Order

http://docs.justia.com/cases/federal/district-courts/new-york/nysdce/1:2012cv02826/394628/410

 

Most of her opinion is discussing issues that Apple had dropped and thus were no longer relevant to why they wanted the Monitor removed. To me she is fluffing up the piece to make Apple seem unreasonable and thus have no grounds. However, if you read the email/correspondence exchange between Apple and Bromwich, etc. you can see why, at the time, Apple had issues. Yes some of these issues resolved themselves by the time the Judge finally decided to take up the issue and thus were withdrawn or were irrelevant. 

 

To me, knowing Apple was appealing this case and would be heard within a matter of months, the monitorship should have been stayed until that ruling. The judge could have asked Apple to provide her with copies of the new compliance measures and training materials by Jan 14th. She then could have reviewed and decided if further action needed to be taken prior to appeal.  If Apple wasn't complying then send in the monitor. 

 

Another interesting article, although this was last month 

http://verdict.justia.com/2013/12/13/dont-want-michael-bromwich-messing-next-iphone

post #158 of 190

This conflict is really part of a greater ideological battle going on in antitrust law, and it's helpful to see it in that context as it explains why the DoJ went after Apple instead of Amazon. First some background. The Sherman Act says all restraints of trade are illegal, a rather extreme position which the Supreme Court soon interpreted to mean all unreasonable restraints of trade are illegal. So shortly after Sherman was enacted in the 1890s SCOTUS came up with the rule of reason, a test to determine whether any given restraint of trade is reasonable or unreasonable. Reasonable is legal, unreasonable is illegal. The rule of reason acknowledges that market practices are extremely diverse and varied and what is illegal in one context may be perfectly legal in another. Consequently, by default, antitrust judgments are supposed to take all the peculiarities of any particular market into account, to judge any accused violation in its special context. By measuring the market both before and after the accused restraint (in this case price-fixing) and determining what harm came from it and what (if any) good came of it, and weighing the pro-competitive effects on the market against the anticompetitive effects, the rule of reason thus determines whether or not a given restraint is illegal.

 

So the rule of reason is the default standard to judge antitrust violations, except in certain cases the judge can forego the rigorous analysis to measure the market before and after, or weigh the pro against the anti to determine legality, and use a lesser standard. Some antitrust situations will always be illegal, such as where a group of competitors (like ebook publishers) collude to fix prices. This is called per se illegality. Theoretically, according to economic theory, in such a horizontal conspiracy ("horizontal" because the competitors are all conspirators on the same market level) there can be no pro-competitive effects on the market, only anticompetitive, so when weighing the positive against the negative, there is only negative so you can assume it's illegal without having to actually look at the market before and after. 

 

That was what Judge Cote did. She ruled Apple participated in and facilitated a horizontal conspiracy. The trouble with this reasoning, which you will see Apple vigorously attack once the Appeal of Judge Cote's verdict gets underway, is that Apple is a vertical player and not a horizontal one. IOW, Apple was not another ebook publisher, it is a retailer and in no way competes with the other ebook publishers. It's relationship and agreements with the ebook publishers is vertical not horizontal. This is a very important distinction and will be a major focal point of Apple's upcoming appeal. 

 

For 100 years, until 2009 that is, vertical price restraints (eg: price fixing between two levels of the market like between manufacturer and retailer) were considered as illegal per se as horizontal price restraints. This basically said that manufacturers could not dictate to retailers the price of their products, they could only suggest the retail price (where the term MSRP comes from). If they tried to punish or dump retailers who didn't follow their prices, that would be found to be illegal per se of violating antitrust law. This meant that discounters could get hold of excess inventory for luxury goods and sell them cheaply, which is good for consumers, but bad for any company trying to build a brand for high quality, and discourages the development of services that go along with high quality where a high price is often a signal for quality. To understand how "good" branding is for consumers, consider we have a whole branch of IP law devoted to building brands because it has been long recognized that consumers knowing where goods come from and trusting brands is a very good thing for competition--I'm talking about trademark law which prevents competitors from ripping each other off or deceiving consumers as to where the goods or services came from. So for 100 years you have antitrust law working against trademark law and vice versa. Eventually the economists and businesses complaining about this problem convince the Supreme Court that antitrust law was ignoring that price-fixing between vertical players in a market could have positive effects , in many cases, was doing more harm to competition than good.

 

So in 2009, in a case you'll hear referred to as Leegin (for Leegin Creative Leather vs PSKS), the Supreme Court reversed the 100 year precedent so that vertical price restraints would no longer judged as per se illegal, but now had to be judged under the more rigorous standard of the rule of reason, taking all the circumstances of the businesses and markets involved into account. They recognized that some price fixing may have some negative effects for competition on one level it's possible those anticompetitive effects can be outweighed by even greater positive (procompetitive) effects on another level.

 

In the ebooks context, Apple argued that they were not an ebooks competitor but a retailer and that their aggreements with the publisher defendants is vertical. IOW, while there are some negative effects to the tiered pricing and MN clauses on the horizontal level (between publishers) these are outweighed by pro-competitive effects on the retailer level, as moving to the agency model produced more competition among ebooks retailers and increased the availability and output of ebooks.  

 

But the DoJ convinced Cote to call Apple a vertical player, disallowing and ignoring all the evidence Apple presented of these pro-competitive effects, and ignoring that all of Apple's agreements with the publishers are vertical. If you read Leegin you'll see that the Supreme Court is insistent that pro-competitive effects, wherever they're found in vertical situations, should never again be ignored. In Leegin the Supreme Court said vertical price restraints are to be judged by the rule of reason, no exceptions. It does not say they are legal, just that the more rigorous standard must be used. Now If Apple is able to convince the Appeals court that Judge Cote used the wrong (per se) standard to reach her verdict, they will throw out her entire decision, including all findings of fact and law, and the case will have to be reviewed de novo under the rule of reason.

post #159 of 190
Quote:
Originally Posted by ruddy View Post
In the ebooks context, Apple argued that they were not an ebooks competitor but a retailer and that their aggreements with the publisher defendants is vertical. IOW, while there are some negative effects to the tiered pricing and MN clauses on the horizontal level (between publishers) these are outweighed by pro-competitive effects on the retailer level, as moving to the agency model produced more competition among ebooks retailers and increased the availability and output of ebooks. 

Pretty impressive first post even if I don't entirely agree with everything in it. I am wondering if you can illustrate the pro-competitive results of Apple's agreement. I understood the crux of Cote's argument to be that there was no positive competition effect as the entire market was pegged to either the agreed prices or the lowest selling price, vs giving retailers free choice to pick their prices in the wholesale model.

 

I did read her discussion over Apple's vertical position but now I've read some of the history I may go back and re-read that, see if it appears differently in this light. Thanks again for the post.

post #160 of 190
Quote:
Originally Posted by ItsTheInternet View Post
 

Pretty impressive first post even if I don't entirely agree with everything in it. I am wondering if you can illustrate the pro-competitive results of Apple's agreement. I understood the crux of Cote's argument to be that there was no positive competition effect as the entire market was pegged to either the agreed prices or the lowest selling price, vs giving retailers free choice to pick their prices in the wholesale model.

 

I did read her discussion over Apple's vertical position but now I've read some of the history I may go back and re-read that, see if it appears differently in this light. Thanks again for the post.

 

Cote's argument that there was no positive competition effect  as the market was pegged to either the agreed prices or the lowest selling price, vs giving retailers the free choice to pick their prices in the wholesale model is misleading. 

 

First, the only way the wholesale model works in Cote's world, would be if you couldn't sell all of the most popular and profitable titles at a loss (ala Amazon). If you could price books at whatever price you wanted but never below the price paid or a min profit of a few percentage points maybe. She glosses over the fact that by a vendor (Amazon) created a barrier to entry (I would call restraint of trade), to any other potential retailer, by selling at a loss where a retailer in this market would make a profit.  In addition, it also precludes a competitor for getting into the e-reader product market for the same reasons.  

 

 Second,  MFN Clause only dealt with new releases. Releases past this window, like 6 months, were dropped in price and were no longer subject to the MFN. Thus, a publisher could then offer a lower price on Amazons site then Apple, for these titles. How is this any different then a company being granted an exclusive on content for 6 months? In reality that would be worse since only 1 vendor has access and sales and would drive prices higher. Nothing in the agency model precluded another retailer from negotiating prices downward. The MFN just meant that Apple then had to be offered the same price, if lower then apple was offered currently. 

 

Third, Amazon or any other e-book retailer didn't have to move to the agency model. Nothing in Apples agreement with the publishers required that and neither did the MFN Clause. MFN Clause only affected others that adopted the agency model. 

 

 

Fourth, if you look at the Library and Book Trade Almanac, it shows the average price of e-books falling, since iBooks came into existence.  Per the article in Salon quoted earlier in the posting and available here: http://www.salon.com/2014/01/12/amazons_bogus_anti_apple_crusade/ 

 

Salon Quote:

Every year, the “Library & Book Trade Almanac,” an authority in the field, reports annual sales by book category. It 2008, when Amazon had a lock on the market, it reported that the average price of an adult fiction e-book in the U.S. in was $8.71. In 2009, as more people self-published books, the average dropped to $8.21. In 2010, when Apple introduced its agency model for e-books, the price dropped 14 percent to $7.06. And when publishers were up and running against Amazon in 2011, the average price of an e-book sank by an astonishing 32 percent — to $4.83. “That’s a steal,” said Al Greco, a professor of marketing at Fordham University.

The almanac has yet to publish final figures for 2012. But Digital Book World Daily, another expert, reports that e-book prices for fiction in 2012 ranged from $4 to $7.

“My feeling is that the DOJ didn’t see these numbers,” said Greco.

 

That is the most pro-competitive result. In addition, you now have more players in the e-book market. More choices of devices, to consume that content for consumers. Publishers restored profit and would then publish more titles. More people chose to self publish and have more options to self publish then there was prior.

 

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