Judge says evidence will likely show Apple culpable in e-book price fixing case

Posted:
in General Discussion edited January 2014
In rare pre-trial "tentative view," Judge Denise Cote said the U.S Department of Justice will likely be able to prove that Apple colluded with major book publishers to falsely inflate the prices of e-books sold through the iBookstore.

iBooks


According to in-court reports from Reuters, Judge Cote offered her view at a hearing for the court trial set for June 3, saying she came to the tentative conclusion after looking over a portion of the evidence.

"I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that," Judge Cote said.

She was quick to note, however, that the opinion was not final as all of the evidence had yet to be accounted for.

Though unusual, the jurist's statements did not come unsolicited, as DOJ lawyer Mark Ryan requested she share any thoughts on the case given the evidence at hand. The "tentative view," which came down negatively for Apple, was based largely on correspondence from a six-week period between December 2009 and January 2010.

The emails Judge Cote alluded to could include a conversation between late Apple cofounder Steve Jobs and then CEO of News Corp. James Murdoch, a page of which was published last week."We strongly disagree with the court's preliminary statements about the case today." - Apple lawyer Orin Snyder

"We strongly disagree with the court's preliminary statements about the case today," Apple counsel Orin Snyder said in a prepared statement. "We look forward to presenting our evidence in open court and proving that Apple did not conspire to fix prices."

Thursday's pretrial hearing was largely procedural, with counsel for both parties dealing with matters of testimony and trial length. Judge Cote did mention, however, that she was already drafting a written decision which would be fleshed out and published once proceedings wrap up.

At the trial, Apple will argue that it did not collude to raise e-book prices under a so-called "agency model" pricing agreement with five major book publishers. Under the deal, publishers were allowed to set prices of owned content under a most favored nations agreement, which precluded them from selling the books elsewhere for less.

Apple's model was a change from the wholesale model used by market leader Amazon, under which publishers sold content in bulk, while resellers were able to establish pricing and discounts as they saw fit.

In related news, book publisher Penguin, which was one of the five houses alleged to have conspired to raise e-book prices with Apple, settled a class-action suit on Wednesday. The publishing house paid out $75 million to 33 U.S. State Attorneys General and numerous private class plaintiffs.
«134567

Comments

  • Reply 1 of 136
    slurpyslurpy Posts: 5,154member


    What a crock of shit. 

  • Reply 2 of 136
    You know, reading the emails between Steve Jobs and the book people, I think Steve had good intentions but, if there's laws against conspiring to increase prices across an industry, I'm afraid he may have indeed played a pivotal roll in breaking them.
  • Reply 3 of 136


    Based on what? The fact that you are a Tim Cook pants dweller and that Apple can do no wrong? Apple is not your friend or the friend of anyone. They are as evil and greedy as Google, Microsoft, Yahoo, Nokia, etc... The moment you wake up to understand this, the better for you and your ill-informed comments.

  • Reply 4 of 136
    gtrgtr Posts: 3,231member

    Quote:

    Originally Posted by sapporobabyrtrns View Post


    Based on what? The fact that you are a Tim Cook pants dweller and that Apple can do no wrong? Apple is not your friend or the friend of anyone. They are as evil and greedy as Google, Microsoft, Yahoo, Nokia, etc... The moment you wake up to understand this, the better for you and your ill-informed comments.



     


    Reverse everything you just said, Mr Uninformed.


     


    NOW you're getting it!


     


    image


     


    (Sheesh I hate people who make comments without doing the tiniest bit of research)

  • Reply 5 of 136
    hill60hill60 Posts: 6,991member


    Sounds like grounds to have the case thrown out and moved to another court.


     


    Since when do judges make guilty pronouncements before being presented with all the evidence?


     


    I found this film of the judge getting ready for the "court":-


     


    image

  • Reply 6 of 136


  • Reply 7 of 136
    irelandireland Posts: 17,614member
    Look over there, there's a pot of money. I don't get the price fixing aspect of this when there are alternate stores. Doesn't that automatically make it not price fixing?
  • Reply 8 of 136
    solipsismxsolipsismx Posts: 19,566member
    Based on what? The fact that you are a Tim Cook pants dweller and that Apple can do no wrong? Apple is not your friend or the friend of anyone. They are as evil and greedy as Google, Microsoft, Yahoo, Nokia, etc... The moment you wake up to understand this, the better for you and your ill-informed comments.

    I agree with Slurpy. Based on the known emails there is nothing from Apple or Jobs that shows any colluding. Jobs covered a huge range of scenarios in his email about what he thinks the future will hold for ebooks if Amazon were to be allowed to continue dumping and how he thinks this will be bad for the market in the long run. There is zero evidence in those emails of any underhanded dealings. In fact, we can deduce from the emails that Jobs was directing his comment to a single person, not a group of people represented by each publisher, which means they clearly show no conspiracy as it's been painted. In fact, the emails so far show this to be correspondence with the last, single hold out of the major publisher days before the iPad announcement. Everything shows Apple working with each publisher independently. Whether the publishers got together in some back room meeting to put the screws to Amazon is another story but so far nothing shows Apple was involved in any of that. Personally I don't think the publishers did that either. There was simply no reason to. They all independently disliked Amazon weakening their brand and product by selling it at a reduced price. They knew this would hurt the publishers in the long run and probably realized that Amazon's dumping would not be sustainable in the long run.
  • Reply 9 of 136
    gatorguygatorguy Posts: 20,698member

    Quote:

    Originally Posted by Ireland View Post



    Look over there, there's a pot of money. I don't get the price fixing aspect of this when there are alternate stores. Doesn't that automatically make it not price fixing?


    The seven major publishers (somehow) all agreed at once that the minimum price for a "Bestseller" e-book could not be less than $12.99. No book seller, Amazon included, could sell from that specific category at a lower price. The minimum price was fixed.

  • Reply 10 of 136
    gatorguygatorguy Posts: 20,698member

    Quote:

    Originally Posted by SolipsismX View Post





    I agree with Slurpy. Based on the known emails there is nothing from Apple or Jobs that shows any colluding. Jobs covered a huge range of scenarios in his email about what he thinks the future will hold for ebooks if Amazon were to be allowed to continue dumping and how he thinks this will be bad for the market in the long run. There is zero evidence in those emails of any underhanded dealings. In fact, we can deduce from the emails that Jobs was directing his comment to a single person, not a group of people represented by each publisher, which means they clearly show no conspiracy as it's been painted. In fact, the emails so far show this to be correspondence with the last, single hold out of the major publisher days before the iPad announcement. Everything shows Apple working with each publisher independently. Whether the publishers got together in some back room meeting to put the screws to Amazon is another story but so far nothing shows Apple was involved in any of that. Personally I don't think the publishers did that either. There was simply no reason to. They all independently disliked Amazon weakening their brand and product by selling it at a reduced price. They knew this would hurt the publishers in the long run and probably realized that Amazon's dumping would not be sustainable in the long run.


    Hasn't only a portion of a single email been released to public view so far? I agree that there's been no smoking gun produced but then the trial hasn't even started yet.

  • Reply 11 of 136
    richlrichl Posts: 2,213member

    Quote:

    Originally Posted by Ireland View Post



    Look over there, there's a pot of money. I don't get the price fixing aspect of this when there are alternate stores. Doesn't that automatically make it not price fixing?


     


    The deal specified that the books couldn't be sold cheaper anywhere else. If my understanding is correct, that's the crucial part.

  • Reply 12 of 136
    solipsismxsolipsismx Posts: 19,566member
    gatorguy wrote: »
    Hasn't only a portion of a single email been released to public view so far? I agree that there's been no smoking gun produced but then the trial hasn't even started yet.

    There have been at least several full emails going back and forth between Jobs and one person of one publisher.

  • Reply 13 of 136
    solipsismxsolipsismx Posts: 19,566member
    richl wrote: »
    The deal specified that the books couldn't be sold cheaper anywhere else. If my understanding is correct, that's the crucial part.

    That looks to be the reason Amazon complained. Apple hurt Amazon simply by entering that market but they killed Amazon's monopoly when they dictated rules of the agency model. Without that none of this would have ever happened. Amazon's dumping seems more elicit than Apple's agency model.
  • Reply 14 of 136
    gatorguygatorguy Posts: 20,698member

    Quote:

    Originally Posted by SolipsismX View Post





    There have been at least several full emails going back and forth between Jobs and one person of one publisher.



    Thanks Soli! That was an interesting set I hadn't yet seen.


     


    So Jobs told Murdock he already had 4 or the major publishers in agreement with him on prices and publisher terms, contract in hand? That might explain how the price coordination was done. I imagine those agreements will end up public if this goes to trial and give a clearer picture of how much in agreement the publisher's were. You're right tho, no proof of collusion in that specific exchange.

  • Reply 15 of 136
    irelandireland Posts: 17,614member
    richl wrote: »
    The deal specified that the books couldn't be sold cheaper anywhere else. If my understanding is correct, that's the crucial part.

    Ah, I see. Yup, that's price fixing. Interesting. Besides, $12.99 is too much for a digital book.
  • Reply 16 of 136
    solipsismxsolipsismx Posts: 19,566member
    ireland wrote: »
    Ah, I see. Yup, that's price fixing. Interesting. Besides, $12.99 is too much for a digital book.

    That is not the definition of price fixing. The agency pricing model makes no statement of what the price will be. An ebook could be set from free to infinity. Apple's requirement was that they would not be be undersold, which meant that Amazon would not be allowed to dump their books at, say, $4.99 to kill iBookstore if the publishers chose to sell them at $9.99. Again, in no way has been shown that Apple has fixed any price.
  • Reply 17 of 136
    mrrodriguezmrrodriguez Posts: 215member

    Quote:

    Originally Posted by SolipsismX View Post





    That is not the definition of price fixing. The agency pricing model makes no statement of what the price will be. An ebook could be set from free to infinity. Apple's requirement was that they would not be be undersold, which meant that Amazon would not be allowed to dump their books at, say, $4.99 to kill iBookstore if the publishers chose to sell them at $9.99. Again, in no way has been shown that Apple has fixed any price.




    But isn't that ultimately price fixing? What if Amazon tries to run a sale on a specific book? That would mean that the specific book would have to be sold at the same price in the iBook store. So that's essentially setting the lowest price for a book across all retailers.

  • Reply 18 of 136
    ericthehalfbeeericthehalfbee Posts: 4,076member
    ""I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that,"

    "circumstanstial"

    So the judge has an opinion based on some of the evidence which is circumstantial? Why does the DOJ insist on releasing snippets of e-mails that look bad on their own, but in context of the entire e-mail aren't that bad at all? And why is the DOJ allowing a judge to "render a verdict" before the trial? I'm beginning to wonder why this information is even being released. Is it to pressure Apple? To get them to settle because they have a weak case?
  • Reply 19 of 136
    gatorguygatorguy Posts: 20,698member

    Quote:

    Originally Posted by mrrodriguez View Post




    But isn't that ultimately price fixing? What if Amazon tries to run a sale on a specific book? That would mean that the specific book would have to be sold at the same price in the iBook store. So that's essentially setting the lowest price for a book across all retailers.



    Had the agreement stood Amazon could not have "run a sale" on any of that group of books. The minimum price was fixed per contract. By pure happenstance each one of those publishers arrived at the same minimum price in those contracts tho they hadn't talked to one another to compare terms. Believe it or not.

  • Reply 20 of 136
    solipsismxsolipsismx Posts: 19,566member

    But isn't that ultimately price fixing? What if Amazon tries to run a sale on a specific book? That would mean that the specific book would have to be sold at the same price in the iBook store. So that's essentially setting the lowest price for a book across all retailers.

    So you're saying that if Amazon varies the price of an item that it's price fixing? Where is the fixed price in any of this? No, it doesn't mean that the same book on the iBookstore would have to be sold at the same price.
Sign In or Register to comment.