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Apple officially appeals e-books antitrust ruling, asks for dismissal or retrial - Page 3

post #81 of 99
Quote:
Originally Posted by elroth View Post

You're right. Apple is not one of the publishers. It's a totally different case than the publishers colluding (a horizontal relationship, which Apple was not a part of). Apple is asserting its innocence and its rights. It's unbelievable the people that so strongly declare Apple guilty, when their appeal hasn't been heard. Lots of interesting arguments of law in today's filing.

What is interesting is that Apple did settled with the EU courts for the very same thing. While a settlement isn't a admission of guilt it probably would've been a much better idea to settle in the US than fight it. A settlement agreement would have been far more favorable than what they going through now.
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post #82 of 99
Quote:
Originally Posted by Frood View Post
 

 

The above statements attempt to add some AI pro-Apple spin.

 

The first sentence is just blatantly and flat out wrong.  The court did not rule that launching the iPad, nor iBooks, were in violation of the Sherman anti-trust act.  Stating that is actually quite laughable- even for AI.

Never mind you misattributed the quote, it _is a radical departure_ for antitrust regulators to go after a new market entrant with no monopoly power, and make a case that attempts to restore the monopoly. It's never happened before, and the world is watching because of it.

 

Here's the fundamental difference between the "per se" and "rule of reason" standards. Either can be used to determine illegality for antitrust violations, but according to the Supreme Court the rule of reason is the default one to use when the price-fixing takes place between two levels of the market. The rule of reason decides whether the price-fixing restraints (agreements) are illegal by measuring both the pro- and anti-competitive effects on the relevant market. If the anti-competitive outweighs the pro-, then the price-fixing was illegal and only then do the agreements become a conspiracy. If the pro- outweighs the anti- (like was the case in Leegin) then the price-fixing wasn't unreasonable, wasn't illegal, and so the agreements are not a conspiracy, they are simply . . . agreements.  The point is, the rule of reason makes a thorough examination of the entire market particular to this case both before and after the price-fixing, and judges illegality by taking the whole market, its history, practices, and peculiarities into consideration. 

 

Per se, on the other hand says, we've seen this thing judged many times before under the rule of reason, and it is always illegal, so it's okay for us to _assume_ the same is the case this time. Basically Cote's decision says "Hey, these statements by Jobs and emails of Eddy Cue have a whiff of conspiracy about them, so we'll just dismiss all these supposed pro-competitive effects on the market, and find them guilty using per se, and we'll justify per se by relabeling the vertical relationship between Apple and the publishers as a horizontal conspiracy, as if they were all competitors on one market level. They do this relabeling because the Supreme Court says you ALWAYS judge vertical price fixing agreements using the rule of reason, and you only use per se in horizontal price-fixing agreements where there's no possibility of pro-competitive effects. Cote and the DoJ, are hoping that the higher courts won't notice their sleight of hand. 

post #83 of 99
Quote:
Originally Posted by dasanman69 View Post


What is interesting is that Apple did settled with the EU courts for the very same thing. While a settlement isn't a admission of guilt it probably would've been a much better idea to settle in the US than fight it. A settlement agreement would have been far more favorable than what they going through now.


This look pretty inaccurate. Here in France a global MFN clause for book pricing is hard-coded in our laws.

Editors are required by law to fix an unique price which can latter-on be discounted by no more than 5% by any resellers.

 

And its actually Amazon which is under investigators scope because by offering free shipment they might have broke the 5% max discount rule... Didn't follow closely, but think a law is currently discussed to clarify this point about shipment.

 

So no, Apple didn't settle for the very same thing.

post #84 of 99
Quote:
Originally Posted by Twisell View Post


This look pretty inaccurate. Here in France a global MFN clause for book pricing is hard-coded in our laws.
Editors are required by law to fix an unique price which can latter-on be discounted by no more than 5% by any resellers.

And its actually Amazon which is under investigators scope because by offering free shipment they might have broke the 5% max discount rule... Didn't follow closely, but think a law is currently discussed to clarify this point about shipment.

So no, Apple didn't settle for the very same thing.
It appears to be pretty much the same thing:
http://europa.eu/rapid/press-release_IP-12-1367_en.htm
"To address these concerns, the companies offered in particular to terminate on-going agency agreements and to exclude certain clauses in their agency agreements during the next five years. The publishers have also offered to give retailers freedom to discount e-books, subject to certain conditions, during a two-year period. After a market test (see IP/12/986), the Commission is satisfied that the final commitments remedy the identified competition concerns it had identified (see also MEMO/12/983).

Joaquín Almunia, Commission Vice-President in charge of competition policy, said: "While each separate publisher and each retailer of e-books are free to choose the type of business relationship they prefer, any form of collusion to restrict or eliminate competition is simply unacceptable. The commitments proposed by Apple and the four publishers will restore normal competitive conditions in this new and fast-moving market, to the benefit of the buyers and readers of e-books".

The Commission opened proceedings in December 2011 against these companies as well as a fifth international publisher, Penguin (Pearson group, United Kingdom). The Commission had doubts concerning the joint switch by these companies from a wholesale model, where the retail price of e-books is determined by the retailer, to agency contracts that contained the same key terms for retail prices - including an unusual retail price Most Favoured Nation (MFN) clause, maximum retail price grids and the same 30% commission payable to Apple."
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post #85 of 99
Quote:
Originally Posted by Gatorguy View Post


It appears to be pretty much the same thing:
http://europa.eu/rapid/press-release_IP-12-1367_en.htm
"To address these concerns, the companies offered in particular to terminate on-going agency agreements and to exclude certain clauses in their agency agreements during the next five years. The publishers have also offered to give retailers freedom to discount e-books, subject to certain conditions, during a two-year period. After a market test (see IP/12/986), the Commission is satisfied that the final commitments remedy the identified competition concerns it had identified (see also MEMO/12/983).

Joaquín Almunia, Commission Vice-President in charge of competition policy, said: "While each separate publisher and each retailer of e-books are free to choose the type of business relationship they prefer, any form of collusion to restrict or eliminate competition is simply unacceptable. The commitments proposed by Apple and the four publishers will restore normal competitive conditions in this new and fast-moving market, to the benefit of the buyers and readers of e-books".

The Commission opened proceedings in December 2011 against these companies as well as a fifth international publisher, Penguin (Pearson group, United Kingdom). The Commission had doubts concerning the joint switch by these companies from a wholesale model, where the retail price of e-books is determined by the retailer, to agency contracts that contained the same key terms for retail prices - including an unusual retail price Most Favoured Nation (MFN) clause, maximum retail price grids and the same 30% commission payable to Apple."


Ok my bad, French system is not applicable to he whole UE and it's not really a MFN (actually it's worst depending on your point of view ! )

 

So UE politely asked Apple and editors to remove the MFN clause... and they did so with a settlement.

DOJ on the other side used thermonuclear weapon against Apple for not being repentant.

 

From what i understand in the UE case the concern is that MFN would disadvantage a reseller that might want to implement a less than 30% commission price for an agency model. That sound pretty logical so yes at the end of the day I think Apple should remove MFN from USA contract. (But didn't they already removed it?)

 

So Judge Cote is still wrong IMHO concerning the conspiracy and the inherent unlawfulness of the agency model.

But I concede I was wrong about MFN clause.

post #86 of 99
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Originally Posted by SpamSandwich View Post

How's it working out now?
Nu-uh. You said "it never works". Emphasis on "never". Keynesian stimulus is a short term solution to stimulate demand, and in the case of the Marshall Plan (and in other cases too) it definitely worked.
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Originally Posted by SpamSandwich View Post

It has exacerbated and extended this modern depression we have been mired in (yes, depression, not recession) lo, these many years.
Don't really see how, the policy in Europe has predominantly been austerity, austerity, austerity. The reverse of Keynesianism has been the cause of the extended depression.
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Originally Posted by SpamSandwich View Post

The bailouts were a massive scam.
To a degree, I agree, but the bailout weren't about Keynesian stimulus, they were about financial stabilisation different thing.
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Originally Posted by SpamSandwich View Post

"Quantitative easing" has only benefitted Wall Street.
Again agree (to a degree), but same point again. Not Keynesian. Keynes is about demand. The rationale behind Quantitative Easing has been about supply of credit.
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Originally Posted by SpamSandwich View Post

Central planning DOES NOT WORK.
Keynes would be right behind you. He was staunchly in favour of free markets. Keynesian stimulus is not about central planning, but generating temporary demand to get a flagging economy moving again.
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Originally Posted by SpamSandwich View Post

It fosters corruption, political meddling and inefficiencies only a madman could dream up.
Depends. It can do. But in any case, not Keynesian.

You seem to be conflating Keynesian principle with socialists ideals. They are very far from the same thing. Keynes was a pragmatic economist who favoured free markets, with government only getting involved to right short term wobbles.
Edited by Crowley - 2/27/14 at 6:00am

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post #87 of 99
Quote:
Originally Posted by Twisell View Post


This look pretty inaccurate. Here in France a global MFN clause for book pricing is hard-coded in our laws.
Editors are required by law to fix an unique price which can latter-on be discounted by no more than 5% by any resellers.

And its actually Amazon which is under investigators scope because by offering free shipment they might have broke the 5% max discount rule... Didn't follow closely, but think a law is currently discussed to clarify this point about shipment.

So no, Apple didn't settle for the very same thing.


This is indeed something to point out, and this shows that competition can exist on other criteria than price alone (proximity, service, "friendliness" ...).

however, to the best of my knowledge, this law has been passed long before the eBook market exist, so I would be surprised it says something about it.

i think that the eBook price issue should be viewed as part of a larger picture, in a context where the eBook is killing the physical book, and everything which goes together with it : printing facilities, retail stores, etc ...

I understand that the editors are concerned about this, because it breaks their business model.

On the other hand, i think the authors will normally benefit a lot from the new model...
Edited by Hydrogen - 2/27/14 at 6:30am

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post #88 of 99
Quote:
Originally Posted by Hydrogen View Post


This is indeed something to point out, and this shows that competition can exist on other criteria than price alone (proximity, service, "friendliness" ...).

however, to the best of my knowledge, this law has been passed long before the eBook market exist, so I would be surprised it says something about it.

i think that the eBook price issue should be viewed as part of a larger picture, in a context where the eBook is killing the physical book, and everything which goes together with it : printing facilities, retail stores, etc ...

I understand that the editors are concerned about this, because it breaks their business model.

On the other hand, i think the authors will normally benefit a lot from the new model...


I think you hit the central point of this case. We are dealing with brand news ways of acquiring digital goods.

 

Editors are wrong if they try to fight against.

Apple is doing mistake because it's new (and MFN was probably one).

Judge can act stupidly if they don't acknowledge the changes and try to rule using an outdated logic.

Consumers might fall into traps until they become fully aware of how theses new ecosystems works.

 

I think we really need to rethink old laws about copyrights and financial transactions, in order to catch-up with today's reality.

post #89 of 99
My bad this time, the Jack Lang law has been supplemented on November 11th, 2011, to be extended to eBooks, further to the so called Zielnik study group recommendations. This law only applies in France, and there is a wide consensus across all political groups in France that it is a good one, since it stood the test of time , in a country where any new government starts with cancelling the laws passed by the previous one ...


So, I would add, for the US readers of this site : you see, sometimes French legislation can be good, because under this legislation, there is no way Apple could have been sentenced as it has been in the US, according to some questionable interpretation of US law ... (Not to mention the ridiculous idea of the inquisitor ...)
Edited by Hydrogen - 2/27/14 at 7:11am

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post #90 of 99

In France Apple would have been just as guilty as in the US. The Lang Law is simply an enforced agency model, which is entirely legal. What Apple did wrong was being a part of a horizontal price fixing conspiracy. In France (as far as I am aware) publishers can and do compete with each other on price. Competition still remains.

 

This is what was to be eliminated in the US. Publishers nor retailers would compete on price, therefore raising prices and hurting consumers.

post #91 of 99
Quote:
Originally Posted by ItsTheInternet View Post

In France Apple would have been just as guilty as in the US. The Lang Law is simply an enforced agency model, which is entirely legal. What Apple did wrong was being a part of a horizontal price fixing conspiracy. In France (as far as I am aware) publishers can and do compete with each other on price. Competition still remains.

This is what was to be eliminated in the US. Publishers nor retailers would compete on price, therefore raising prices and hurting consumers.


I have to admit I am not a lawyer, but the Jack Lang law (also called "prix unique" = one single price) does enforce a unique price (with minor +- 5% deviation admited).

There is more stupidity than hydrogen in the universe, and it has a longer shelf life.

Frank Zappa

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There is more stupidity than hydrogen in the universe, and it has a longer shelf life.

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post #92 of 99
Quote:
Originally Posted by Hydrogen View Post


I have to admit I am not a lawyer, but the Jack Lang law (also called "prix unique" = one single price) does enforce a unique price (with minor +- 5% deviation admited).

 

Neither am I, so don't take my claims as authority. From what I understand though this is an agreement to ensure book sellers do not have to compete on bestsellers, rather than book publishers.

 

If I'm wrong though I'll be happy to admit it.

post #93 of 99
Quote:
Originally Posted by ItsTheInternet View Post
 

 

Neither am I, so don't take my claims as authority. From what I understand though this is an agreement to ensure book sellers do not have to compete on bestsellers, rather than book publishers.

 

If I'm wrong though I'll be happy to admit it.

 

 

Sorry, I was away for a while ... it happens sometimes, yes ..

 

From basic Web search (you can cross check ...)  the initial Jack Lang said that the selling price (price paid by the customer) of a "brand new" book (don't ask me what is "brand new" in the eBook market ...) should be fixed by the publisher, and stay within the +-5% variation margin.

 

There are  no special provisions applying to bestsellers, and the law is not applicable to second hand market (which, by the way, is also a tricky issue in the ebook market, not really addressed (can your offspring inherit from your ebooks after your death, and pass the "property" (usage, in fact) rights onto another person ???......).

 

 

It does not say anything on how the various actors in the added value chain (author, etc ...) come to an agreement on their intermediate pricing scheme.

 

 

As usual with any law, there can be exceptions (otherwise it would be too simple ...), but those are limited to books stored for more than six months , etc etc ....

 

On this basis, as long as the law is satisfied, I see little ground for a possible prosecution on the grounds of a "conspiracy", resulting in increased prices, harming the customer .... just because the price to the customer is fixed !

 

 

The law has been passed in 1981, I do not even know if Amazon was existing at that time, even if yes they did not anyway have any presence in France. The idea was to protect the network of local book sellers against possible predatory actions from large companies (FNAC , a large French retail stores chain, was targeted at that time).

 

Currently, in France, Amazon is now trying to circumvent this law by offering free delivery, and I believe the question has been raised on how to address this (I have to make a complementary search to know what the status is on this secondary issue).

 

 

If we talk about eBooks only, the three major options available for a French customer (who mostly prefers to read books in French ...) are the Apple iBook Store, or Amazon, or the FNAC eBook store. (feeling the danger, FNAC tried to market their own Kindle equivalent, until they recently opt for a Kobo tablet (now Japanese group Rakuten property)

 

Just by curiosity, I tried to buy an eBook on the FNAC Store, and it has been a mess to get rid of the DRM in my Apple-centric environment (I believe I could say the same for Amazon).

 

So to me, Apple will win this battle for the same reasons it won the battle on music. Not because of price but because people do not want to be bothered by DRM restrictions on things they have legally acquired.


Edited by Hydrogen - 2/27/14 at 9:12am

There is more stupidity than hydrogen in the universe, and it has a longer shelf life.

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There is more stupidity than hydrogen in the universe, and it has a longer shelf life.

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post #94 of 99

I think its still in debate at our assembly...

 

But Wikipedia is already of great help on this topic https://en.wikipedia.org/wiki/Fixed_book_price_agreement

 

So it's by no way limited to France and it mustn't be seen as a mandatory agency model but more like a common MFN rule (with a 5% tolerance).

 

Finally if the EU was concerned about Apple MFN contract clause i think it's more because it might have interfere with these already set rules. And also because as Wikipedia mention it, not every country in the EU have this Fixed Book Price law implemented.

 

Here, Book is often viewed as a non-competitive product by its nature.

 

Theses questions are by far not trivial, thus I think Apple appellate was really needed to clarify things as Judge Cote looked way to confident and excessive in the first judgment on such complex matters.

post #95 of 99

Economists file Amici Curiae brief for Apple:

Quote:
The District Court also erred in equating price increases for some e-books with harm to competition. Apple's entry into the e-book retail market dramatically increased competition by diminishing Amazon's power as a retail monopolist (and its ability to pursue a "loss-leader" strategy that inefficiently priced e-books below their acquisition cost).  That increased competition gave publishers more bargaining power, thereby bringing ebook pricing closer to competitive levels. These [Judge Cote's] errors threaten to chill competition by discouraging the use of common vertical contracting techniques that are often essential to facilitating the expensive and risky investments needed for entry into highly concentrated markets.  Our antitrust laws should encourage, not penalize, vertical contracting arrangements that facilitate entry and enhance competition.
post #96 of 99
Quote:
Originally Posted by ruddy View Post

Economists file Amici Curiae brief for Apple:

A fascinating development.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #97 of 99
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Originally Posted by SpamSandwich View Post

A fascinating development.

Ruddy missed out on linking the brief itself. It's 33-pages and IMO it is a worthwhile read if you're really interested in the case.
http://fortunebrainstormtech.files.wordpress.com/2014/03/economist-amicus-brief1.pdf
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post #98 of 99
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Originally Posted by Gatorguy View Post

Ruddy missed out on linking the brief itself. It's 33-pages and IMO it is a worthwhile read if you're really interested in the case.
http://fortunebrainstormtech.files.wordpress.com/2014/03/economist-amicus-brief1.pdf

In some respects the Amici brief is more succinct and to the point than Apple's brief.

post #99 of 99
Quote:
Originally Posted by ruddy View Post

In some respects the Amici brief is more succinct and to the point than Apple's brief.

Yes it is. Good points made.
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