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States want Apple to pay at least $280M in e-books antitrust case, push for $840M - Page 4

post #121 of 132
Quote:
Originally Posted by THT View Post
 

 

My argument would be that the DOJ has no business bringing up this case. The interpretation of the laws by which they prosecuted this case doesn't apply and shouldn't apply. Ie, a retailer selling a physical good is not the same thing as a retailer selling a digital good, a paper book is not the same thing as an ebook.

The court is not the DOJ. The court's interpretation of the law seems to be different to yours.

 

Quote:

In other words, yes, prices did rise. But it's all part of the markets going through transition and the gov't should not mess around with it. The iPad was instrumental for this transition. It's had pro-competitive effect. It would have turned out fine. Now, it's just fubar-ed.

 

Let me get this right. The iPad (which is completely unrelated to the ebooks trial) had pro competitive effects, so the court should ignore any anticompetitive effects from any of Apple's other activities? What rot.

 

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If the gov't wanted to do something, it would be to mandate a common DRM system so that it levels the field for the players. But the gov't has already answered this and are fine with closed formats, so they are not going to do it.

This would be a neat thing to do. It's still totally unrelated though.

post #122 of 132
Quote:
Originally Posted by ruddy View Post
 

You understand wrong. In fact it appears that now you are simply making up your own information to suit your preconceived conclusion, something that doesn't win you any credibility points.

What preconceived conclusion? You're arguing a bias with only 11 posts, I think it unlikely you know me well enough to claim any bias. I have no dog in this fight and am only repeating the facts I find elsewhere.

 

Quote:
Apple never abandoned its defense, but presented the pro-competitive effects of the shift to agency to the court with exhibits, witnesses, expert testimony, and they closed their arguments with no change or backpedaling.

The court explicitly disagrees with you:

Quote:
Apple vigorously contested its liability at trial. This Opinion turns now to Apple’s principal arguments in its defense. Apple’s defense has somewhat shifted over time. Apple in its opening statement identified five essential links in the chain of evidence that the Plaintiffs had to establish at trial. They were:
  • First is that the publishers sign Apple’s agency agreements with an MFN and price caps.
  • The second is that that MFN sharpened the publishers’ incentives to demand agency from Amazon.
  • The next is that that demand for agency convinces a company, Amazon, of the futility of continued resistance to agency.
  • Amazon adopts agency in circumstances where absent the Apple MFN it would not have adopted agency.
  • And the final chain in the alleged conspiracy is that the publishers raise prices to the price caps by agreement.
  • All of these links in the chain are required for the government to meet its burden of proving that Apple participated in a price fixing scheme.
 
Apple also highlighted in its opening how much Apple likes low prices and that it did not know how the Publishers would price
their e-books under the agency model. Over the course of the trial, Apple abandoned each of these arguments. All of the “links” that Apple identified in its opening statement were established at trial, and Apple did not argue otherwise in its summation. Apple similarly abandoned by summation its theory that Apple was unaware that the Publisher Defendants would use their new pricing authority to raise e-book prices; over the course of the trial, Apple’s witnesses admitted that they expected the Publisher Defendants to raise their

e-book prices to Apple’s price caps.

I've tried to preserve formatting as best possible.


 

Quote:

Judge Cote did not rule on the per se vs rule of reason standard until after the trial was over. The first anyone knew of it was when her decision was published.

 

Per se illegality is by far the weakest link in her ruling, and since she used the wrong standard, an Appellate or the Supreme Court can easily toss _all_ her findings of fact and _all_ her findings of law right out the window, to review the trial de novo. She's ignored all the Supreme Court's many cautions not to use the per se standard in situations like this (for one thing they prohibit it outright in cases involving new markets the courts have no experience with) and she deliberately ignores the language in Leegin that explictly directs her to use the rule of reason standard in any case with any verticality. 

 

Please show where she ignores it. Another direct quote from the judgement:

Quote:
Per se price-fixing agreements may also include those where a vertical player participates in and facilitates a horizontal conspiracy. See
Toys “R” Us, 221 F.3d at 934, 936. Where a vertical actor is alleged to have participated in an unlawful horizontal agreement, plaintiffs must demonstrate both that a horizontal conspiracy existed, and that the vertical player was a knowing participant in that agreement and facilitated the scheme. See, e.g. id. at 936; Interstate Circuit, 306 U.S. at 225-29 (1939).
 
B. Analysis of the Evidence
The Plaintiffs have shown through compelling evidence that Apple violated Section 1 of the Sherman Act by conspiring with the Publisher Defendants to eliminate retail price competition and to raise e-book prices. There is overwhelming evidence that the Publisher Defendants joined with each other in a horizontal price-fixing conspiracy.

Quote:

I'm confident per se illegality will be tossed on appeal, and someone is going to have to review the trial de novo. That sounds like a big deal, and it is, but it's not at all unusual for antitrust law. Either the Appeals Court will reverse the trial court's decision and review it themselves under the rule of reason, or they will remand it back to Cote for her to review under the rule of reason. 

 

Getting judged by the right standard doesn't guarantee Apple can win, but it gives them a chance.

You're going to have to show how the clear evidence of conspiracy is not sufficient for a per-se case. I hope it isn't too much to ask for you to cite the laws and portions of the laws responsible. I have quoted the areas of the result of the trial that appear to disagree with you.

post #123 of 132
Quote:
Originally Posted by ItsTheInternet View Post
 

 

Lets assume for the moment that Amazon's pricing is illegal. Can you show me how participating / falicitating an illegal price fixing conspiracy is a lawful remedy? Of course you can't, because even if Amazon's conduct is illegal, Apple's response should have been to file a complaint, not to break the law themselves. Do you deny that?

Simple. Leegin (landmark price fixing precedent from the Supreme Court just 5 year's ago) overturned 100 years of precedent and makes price-fixing legal when the pro-competitive effects on the market of a vertical price fixing scheme outweigh the anti-competitive effects on the market. There are now many examples of legal price-fixing schemes since Leegin.

 

To be clear, Apple need not prove Amazon did anything illegal, nor even accuse them of predatory pricing or monopoly abuse in it's appeal. I doubt very much they would do that. Apple only needs to prove that the ebook market was more productive and more competitive after the shift to Agency, than before, for which there is indisputable evidence. The rule of reason is the standard that actually measures the pro- against the anti- to determine whether the benefits outweighed the harm or vice versa. To determine that Apple has to be judged under the rule of reason. When the pro- outweighs the anti- (like in Leegin) the agreements are no longer illegal, they are no longer collusive, and they are no longer a conspiracy. They are simply . . . business agreements.

post #124 of 132

You completely failed to respond to my question. If we were to believe your response, Apple could conduct any illegal conduct whatsoever, so long as they provide even a flimsy argument that the results were pro-competitive.

 

You've already accused me of bias, but then you start calling evidence "indisputable". Really? There's solid evidence of volume drops and price rises, as well as evidence that the leading parties in all respects knew what was happening. That is hardly "indisputable" and you still haven't cited anything in response to the detailed citations from the trial I gave you.

post #125 of 132
Quote:
 What preconceived conclusion? You're arguing a bias with only 11 posts, I think it unlikely you know me well enough to claim any bias. I have no dog in this fight and am only repeating the facts I find elsewhere.

You made up facts that aren't true. You claimed:

Quote:
They abandoned this line of argument because horizontal conspiracies are not judged by the "rule of reason" as I understand it, but are per-se illegal.

They most certainly did not. Had Apple known Cote was planning to throw antitrust precedent and Supreme Court cautions out the window and make up an excuse and twist the law to apply per se illegality, I'm sure they would have presented an entirely different case at trial. The Rule of Reason is the default standard for vertical price agreements. No one could expect Cote would create her own precedent on the spot by calling vertical agreements horizontal. There's no precedent for it. And Leegin even forecloses the possibility of it. That you made this claim shows you either just made up these facts, or are biased in believing them since they are not true. 

post #126 of 132
Quote:
 but then you start calling evidence "indisputable". Really?

Please, who has disputed that BAM, Google, and Apple all entered the ebook market in the year after the publishers shifted ebooks to Agency? Who is disputing that in the year after Agency ebook output rose 615%?

post #127 of 132
Quote:
Originally Posted by ruddy View Post
 

You made up facts that aren't true. You claimed:

Perhaps you missed the "as I understand it". That typically doesn't indicate that I'm claiming something as fact, but as my understanding of the situation

 

Quote:
They most certainly did not.

So prove it.

 

Quote:
Had Apple known Cote was planning to throw antitrust precedent and Supreme Court cautions out the window and make up an excuse and twist the law to apply per se illegality, I'm sure they would have presented an entirely different case at trial. The Rule of Reason is the default standard for vertical price agreements. No one could expect Cote would create her own precedent on the spot by calling vertical agreements horizontal. There's no precedent for it.

Cote appears to cite precedent:

Quote:
Per se price-fixing agreements may also include those where a vertical player participates in and facilitates a horizontal conspiracy. See Toys “R” Us , 221 F.3d at 934, 936. Where a vertical actor is alleged to have participated in an unlawful horizontal agreement, plaintiffs must demonstrate both that a horizontal conspiracy existed, and that the vertical player was a knowing participant in that agreement and facilitated the scheme. See, e.g. , id. at 936; Interstate Circuit, 306 U.S. at 225-29 (1939).

 

Quote:
And Leegin even forecloses the possibility of it. That you made this claim shows you either just made up these facts, or are biased in believing them since they are not true. 

So cite the relevant portion of Leegin. You can't call me biased because on one hand I have a senior judge who appears to cite precedent and lays out a fairly clear cut judgement and on the other side I have you who repeatedly refuses to do anything but say I'm wrong.

post #128 of 132
Quote:
Originally Posted by ruddy View Post
 

Please, who has disputed that BAM, Google, and Apple all entered the ebook market in the year after the publishers shifted ebooks to Agency? Who is disputing that in the year after Agency ebook output rose 615%?

Yeah I have enough statistical knowledge to know that the graph here: http://fortunebrainstormtech.files.wordpress.com/2013/06/screen-shot-2013-06-04-at-7-31-03-am.png does not show a pro-competitive effect. You'll notice that the trend was actually flatter upon Apple's entry and that the subsequent jump significantly later and is driven by Amazon and B&N, not by Apple.

post #129 of 132
Quote:
 So prove it.

You made the claim Apple abandoned its defense of claiming the pro-competitive effects of the agency model. It's up to you to prove that isn't a falsehood.

 

Quote: 

Cote appears to cite precedent:

She cites 2 cases, Toys R Us 1993 which is about a group boycott and not price-fixing, and Interstate Circuit which was a price fixing case from 1939. Both of these cases depended on Dr. Miles, the 100 year precedent that Leegin overturned in 2008. Leegin is the ruling precedent now. 

 

Quote:
 So cite the relevant portion of Leegin.

Here you go:

Quote:
 To the extent a vertical agreement setting minimum resale prices is entered upon to facilitate either type of cartel, it, too, would need to be held unlawful under the rule of reason.

So Leegin anticipates a vertical agreement being used to facilitate a horizontal conspiracy, exactly how Cote characterizes Apple, and says that to be held unlawful, the proper standard to judge by is the rule of reason. Not per se. It's a straightforward dictum from the Supreme Court. 


Edited by ruddy - 2/5/14 at 8:35pm
post #130 of 132
Quote:
Originally Posted by ruddy View Post
 

You made the claim Apple abandoned its defense of claiming the pro-competitive effects of the agency model. It's up to you to prove that isn't a falsehood.

It is a falsehood, you made up the specifics of what I said, what I actually said was that I believed they had abandoned most arguments from their opening statement. You

  1. Couldn't provide their opening statement
  2. Couldn't provide anything to challenge the Judge's characterisation of Apple's defence
  3. Now expect me to prove myself correct vs you, who refuses to make any effort.

 


 

Quote:

She cites 2 cases, Toys R Us 1993 which is about a group boycott and not price-fixing, and Interstate Circuit which was a price fixing case from 1939. Both of these cases depended on Dr. Miles, the 100 year precedent that Leegin overturned in 2008. Leegin is the ruling precedent now. 

 

All the evidence I found is that Dr Miles was augmented by decisions taken immediately after it, with Leegin permitting only a limited type of vertical price restraint not relevant to Appple. Cote also cites Leegin.

 
Quote:
While vertical restraints are subject to review under the rule of reason, Leegin, 551 U.S. at 907, Apple directly participated in a horizontal price-fixing conspiracy. As a result, its conduct is per se unlawful. The agreement between Apple and the Publisher Defendants is, “at root, a horizontal price restraint” subject to per se analysis. In re: Elec. Books Antitrust Litig. 859 F. Supp. 2d 671, 685 (S.D.N.Y. 2012). As such, it is not properly viewed as either a vertical price restraint or solely through the lens of traditional “hub and spoke” conspiracies.

Not only this, but she discusses how under the "rule of reason" that Apple would also fail to win their case.


 

Quote:

Here you go:

So Leegin anticipates a vertical agreement being used to facilitate a horizontal conspiracy, exactly how Cote characterizes Apple, and says that to be held unlawful, the proper standard to judge by is the rule of reason. Not per se. It's a straightforward dictum from the Supreme Court. 

 

Even just quoting excerpts from Leegin shows how carefully you have cherry picked your one sentence 'cite'.

 

Quote:
A horizontal cartel among competing manufacturers or competing retailers that decreases output or reduces competition in order to increase price is, and ought to be, per se unlawful.
...
To the extent a vertical agreement setting minimum resale prices is entered upon to facilitate either type of cartel, it, too, would need to be held unlawful under the rule of reason

As you can see, Leegin is covered under my cite from Cote above. She decides that as Apple participated in a horizontal conspiracy, rather than facilitating a cartel via minimum resale price agreements that the conduct is per-se illegal.

 

She also discusses the rule of reason and shows that Apple would fail then too.

post #131 of 132
Quote:
Originally Posted by ItsTheInternet View Post
 

The court is not the DOJ. The court's interpretation of the law seems to be different to yours.

 

 

Obviously. The DOJ should have never brought the case. Cote made the wrong decision. I talked about the emusic stores for a reason. Amazon's MP3 store and Apple's iTunes stores are the dominant emusic stores. Probably 90%. They both have song prices at 1.29, 0.99, 0.69. I haven't seen a different price for about what, 6 years? Prior to that, songs were generally 0.99, now all the new releases and popular songs are 1.29, consumers are shafted just as much as ebook buyers were in 2010/2011, no? Hmm, sounds like a more stringent case of the music publishers setting the price at retailers more so than the ebooks one. Yet the DOJ ignores it.

 

Quote:
Originally Posted by ItsTheInternet View Post
 

Let me get this right. The iPad (which is completely unrelated to the ebooks trial) had pro competitive effects, so the court should ignore any anticompetitive effects from any of Apple's other activities? What rot.

 

This would be a neat thing to do. It's still totally unrelated though.

 

 

Rot? No, that's recognizing the benefits outweigh the negatives. That's what courts do. That's what the DOJ does. Except that can backwards obviously. If you want rot, go figure out why the DOJ isn't prosecuting anyone in the subprime mortgage crisis.

post #132 of 132
Quote:

It is a falsehood, you made up the specifics of what I said, what I actually said was that I believed they had abandoned most arguments from their opening statement. You

  1. Couldn't provide their opening statement
  2. Couldn't provide anything to challenge the Judge's characterisation of Apple's defence
  3. Now expect me to prove myself correct vs you, who refuses to make any effort.

Classic example of the biased poster who can never admit to making a mistake. 

 

Quote:
 Not only this, but she discusses how under the "rule of reason" that Apple would also fail to win their case

That's a pro forma statement every time a judge invokes the per se exception. If you read some antitrust case law, you'll see that per se illegality is often reversed, and every judge says it would have failed the rule of reason. The fact remains, she did not judge the case under the rule of reason, for which there is a particularly rigorous methodology and analysis. Cote took the shortcut the Supreme Court tells her to avoid except in very specific circumstanmces, circumstances which don't apply to the nascent ebook market.

 

Quote:
 All the evidence I found is that Dr Miles was augmented by decisions taken immediately after it, with Leegin permitting only a limited type of vertical price restraint not relevant to Appple. 

Obviously you have not bothered to read Leegin.

 

Quote:
 Cote also cites Leegin.

It's called lip service.

 

Quote:

Even just quoting excerpts from Leegin shows how carefully you have cherry picked your one sentence 'cite'

The cherry I picked speaks directly to this case—where vertical price restraints allegedly facilitate a horizontal conspiracy, and which Leegin goes out of its way to anticipate, and say that situation is to be judged by the rule of reason. Leegin is a 30 page treatise on price-fixing, giving all the reasons and background for overturning the theoretical formalism of Dr. Miles (automatic illegality) embodied in per se judgments of illegality, and replacing it with the standard that requires actually measuring the benefits and harms of price-fixing before deciding whether it was illegal. Leegin is full of cherries, cherries establishing the principles and guidelines for judging price-fixing schemes, Cote ignores or dismisses the cherries the Supreme Court offers, she is ideologically opposed to them, as is the DoJ. It's not all that unusual for a district judge to go off on a tangent and get it all wrong, but it's a lot less likely that 3 appellate judges will arrive at the same conclusions she did. It is possible that an Appellate Court could also oppose the Supreme Court's new precedent, that only ensures the SC will grant cert when it comes to them.

 

I doubt the Supreme Court cares whether or not Apple is guilty, but they sure as hell will care that the right standard was used when judging them.


Edited by ruddy - 2/6/14 at 1:17pm
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