Apple calls antitrust suit 'bizarre,' says DOJ 'reverse-engineered a conspiracy'

Posted:
in General Discussion edited January 2014
During Apple's opening statements at the Department of Justice's e-book price fixing trial on Monday, lawyer Orin Snyder called the government's suit "bizarre," the same terminology CEO Tim Cook used to describe the case during an interview last week.

Following the DOJ's case presentation earlier in the day, Snyder offered Apple's arguments, concluding the company should be commended, not condemned, for its e-book efforts, reports AllThingsD.

DOJ


Snyder, like Cook at the D11 conference, used the buzzword "bizarre" to describe the Justice Department's suit. According to in-court reports from CNET, the lawyer said the DOJ's antitrust case is "the first time in the history of antitrust laws that a new entrant coming into a concentrated market ... is condemned."

?When the U.S. government brings a case, many assume it must have merit,? he said. ?But even our government is fallible, and sometimes the government just gets it wrong. Apple did not conspire with any publisher individually, collectively or otherwise to raise industry prices."

Snyder rehashed an argument saying Apple did not collude with five major book publishers to falsely inflate e-book pricing in the iBookstore. He went on to say the publishers themselves had side dealings Apple was not aware of, a point central to the DOJ's case. The Justice Department has no evidence to assert otherwise, he said.

?What the government is trying to do is reverse engineer a conspiracy from a market effect," Snyder said.

As part of Monday's proceedings, Apple attorney Kevin Saul, who handles the issues with iTunes, apps and iBooks, was the lone witness to give testimony. During questioning, Saul said he aided in the drafting of Apple's agreements with the five publishing houses, and noted the company told the content owners it "had no interest in helping them fix the problems they had with Amazon pricing."

All five publishers settled out of court, leaving Apple to stand alone in its fight against the DOJ's allegations.

Apple's e-book trial is scheduled to run for the next three weeks, and will continue tomorrow with more testimony from Saul. Upcoming witnesses include Apple's senior vice president of Internet Software and Services Eddy Cue, the executive most involved with the negotiations.
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Comments

  • Reply 1 of 110


    DOJ will lose. Funny how they never investigated Amazon's monopoly on books prior to iBooks being released.

  • Reply 2 of 110
    solipsismxsolipsismx Posts: 19,566member
    He went on to say the publishers themselves had side dealings Apple was not aware of...

    That would explain why they all settled and Apple didn't.
    "What the government is trying to do is reverse engineer a conspiracy from a market effect," Snyder said.

    I agree with this assessment thus far.
  • Reply 3 of 110
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by GadgetCanadaV2 View Post

    DOJ will lose. Funny how they never investigated Amazon's monopoly on books prior to iBooks being released.


     


    Apple should sue for both damages and a forced trial of Amazon for the same thing.

  • Reply 4 of 110
    SpamSandwichSpamSandwich Posts: 30,736member


    They'll stop at nothing to waste taxpayer's money.

  • Reply 5 of 110
    bizzarebizzare Posts: 61member
    I think they will unfortunately lose and Apple will appeal to scotus.
  • Reply 6 of 110
    nasseraenasserae Posts: 3,153member

    Quote:

    Originally Posted by SpamSandwich View Post


    They'll stop at nothing to waste taxpayer's money.



     


    The funny thing is that the DOJ got what it wanted when the publishers settled. Even if Apple lose, there is nothing to gain except make Apple looks bad.

  • Reply 7 of 110
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by NasserAE View Post

    The stupid thing is that the DOJ got what it wanted when the publishers settled. Even if Apple lose, there is nothing to gain except make Apple looks bad.


     


    Been front page news in the papers for quite some time.


     


    When it's over, there won't be a SINGLE WORD said about how not only was Apple not guilty of doing anything in the first place, but Amazon's subsequent trial won't even be IN the paper.

  • Reply 8 of 110
    apple ][apple ][ Posts: 8,360member


    Screw the DOJ.


     


    The only conspiracy that I see, is the one that's taking place within the DOJ, by their corrupt employees and serial liars. If Apple believes that they are being unfairly targeted, then can't they sue the DOJ?

  • Reply 9 of 110
    sac2dudesac2dude Posts: 5member
    Apple was price fixing, its an open and shut case. They helped organize an effort among top publishers to raise e-book prices. The government has a bunch of e-mail, phone calls, and key witnesses that seem to make this a done deal.

    How about when Jobs did his iPad introduction, where he bought a copy of the Edward Kennedy autobiography on stage for $14.99 ($9.99 on Amazon). When Walt Mossberg questioned Jobs on why people would pay more for an e-book from Apple, Jobs not so wisely replied, That wont be the case. The prices wontt remain the same.

    Carolyn Reidy, the CEO of Simon & Schuster, ended up calling that remark incredibly stupid in an e-mail to a colleague.

    It doesn't matter how many people own iProducts - Apple is going to end up paying a bunch of that money they have banked.
  • Reply 10 of 110
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by sac2dude View Post

    Apple was price fixing, its an open and shut case.


     


    Then prove it, one post troll.






    It doesn't matter how many people own iProducts - Apple is going to end up paying a bunch of that money they have banked.



     


    lol.

  • Reply 11 of 110
    jragostajragosta Posts: 10,473member
    sac2dude wrote: »
    Apple was price fixing, its an open and shut case. .

    Cool. Our first Amazon shill.

    Does it pay well?
  • Reply 12 of 110
    mstonemstone Posts: 11,510member


    Apple is clueless. You can't even get a lunch reservation anywhere near K Street unless you know someone. 

  • Reply 13 of 110
    swaylonswaylon Posts: 24member
    ?What the government is trying to do is reverse engineer a conspiracy from a market effect," Snyder said.

    Agree!! The government is good at coming up with an "end" in order to fabricate "the means."
  • Reply 14 of 110

    Quote:

    Originally Posted by GadgetCanadaV2 View Post


    DOJ will lose. Funny how they never investigated Amazon's monopoly on books prior to iBooks being released.



     






    Well, paper publishing has a number of issues and challenges.  I worked for a publisher at one point in time that had more trouble with Ingram Publishing Services.  But they preferred working with Amazon.  Under an Ingram contract, the printer/publisher has/had to pay for everything, including return shipping if the book is returned or in a worse situation, completely outside the publisher's control, someone at Barnes & Noble spills a starbucks coffee on a book.  This happened frequently.  One time, Ingram UPS-mailed a crate of books, around 1000-lbs, requesting refund, and the publisher even had to pay for the shipping costs.   We took the books, and placed them in the trash, and the unexpected 1,000-lb return cost the publisher over $10,000.   It was a real expensive dumpster pickup, and the publisher learned from that. 


     


    The publisher I worked for was really looking forward to the iPad as a savior.  But, the first few versions of iBooks didn't support color pictures for children's books, but I believe this was updated and changed.  Color books, especially for Children's books, is a differentiator, and needed for anything that has illustrations, and a customer at the time, would have paid additional for something in color, over Kindle's Black-and-white display.


     


    For paper distribution, amazon uses Just-In-Time supply chain concepts, and only keep a few week's stock on-hand, which work better.  Using centralized logistics, it just worked better than Ingram Publishing. 


     


    As for the DoJ action, they're doing their job and researching how to arrive at specific pricing.  I'm surprised that no one pointed out the fact that iPad was in color, and color can, by definition, command a premium.   Heck, 4-color printing costs more anyway! 


     


    That said, perhaps the DoJ is correct.  With electronic distribution, prices should go down over time, and they likely will as new authors sign contracts, that take into consideration potential new royalty amounts for electronic distribution.  


     


    From a publisher perspective, it's difficult to pin down a price that respects publisher's need to create profitable products, pay wages without cannibalizing the print market sales through companies like Amazon, Barnes & Noble (Ingram Publishers... Whom only paid after a book was sold at a store), and others.  My guess (and it's just a guess), is that Apple's suggestions for pricing were a good balance for the transition into electronic publishing formats.  Creating an eBook is easy, but some customers still prefer paper versions, including myself.  If your looking to publish, consider a Lulu account.  As a publisher or self-publishing author, you can set the price to whatever you want.  Lulu works similar to a regular publisher- manages the contracts, and distributes on multiple platforms including Kindle and iBooks, all electronically.


     


    I doubt any, or very few, of the authors in publisher's catalogs have an issue of being paid an amount similar to a print copy.   Indeed, publishers can set the pricing to individual titles to whatever they negotiate with the author, but when it comes to back catalog manuscripts, likely the logic applied was sales.  And Publishers, standing up on behalf of the Authors, wanted royalties to be paid an amount similar to physical distribution.  Likely, if an author wanted to charge more or less, I'm sure all they have to do is call their literary agent or publisher up, and request a price change.


     


    From the legal department's perspective, you have to understand royalties and contracts.  People in creative industries, often loose contact after the creative work is done.  Apple's suggestions for pricing were likely used to provide general direction in situations where the Author couldn't be contacted in time for the Kindle or iPad/iBooks launch.  Unfortunately, this occurs often!  In 2004, Eliot Spitzer, as Attorney General for the State of New York, found $50,000,000.00 in royalties owed to musicians whose record labels had failed to keep in contact with them.  All they needed was an accurate list but sometimes authors, artists, and musicians move, so the catalog of books, whom the Publisher owns the copyright to, has to be managed.


     


    With matured industries like music or print publishing, authors to books may not have been available to re-draw-up new contracts on an individual basis.   So the price likely had similar goals including payment to authors a royalty amount the same as physical publishing.  Most publishers own the copyright anyway.

  • Reply 15 of 110
    charlitunacharlituna Posts: 7,205member
    sac2dude wrote: »
    Apple was price fixing, its an open and shut case. They helped organize an effort among top publishers to raise e-book prices.

    Prove it, open and shut. Not circumstantial BS. And not stuff taken out of context to read to your desired effect

    If Jons etc of guilty of anything it was setting limits on the publishers control so they wouldn't get too crazy. Nd not wanting anyone to undercut them (something Amazon had in contracts themselves )
  • Reply 16 of 110
    Hmm..
  • Reply 17 of 110
    hmmhmm Posts: 3,405member

    Quote:

    Originally Posted by Tallest Skil View Post


     


    Apple should sue for both damages and a forced trial of Amazon for the same thing.



     


    Care to elaborate? I'm not sure you can seek the investigation of another company in a suit like that. I don't think there's a way to force indirect litigation. Perhaps someone else can contribute on this one.

  • Reply 18 of 110
    anantksundaramanantksundaram Posts: 18,958member
    Regardless of the merits, with stuff like this (and the tax testimony), Apple is not winning any PR badges. That is the sad fact.
  • Reply 19 of 110
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by hmm View Post

    Care to elaborate? I'm not sure you can seek the investigation of another company in a suit like that. I don't think there's a way to force indirect litigation. Perhaps someone else can contribute on this one.


     


    Oh, I know. I'm just saying. image

  • Reply 20 of 110
    Apple needs to pay more taxes -- but so do MOST of the Fortune 500. The focus on Apple for price fixing, when Amazon is killing profits for authors. the focus on Apple at FoxConn when they were the ones pushing for better treatment, and the focus on Apple about taxes when there are many that pay less than 3% -- is not a factor of Apple being the biggest culprit -- but a factor of Apple having fewer lobbyists, of leaving the US Chamber of Commerce which is just a lobbyist group now for outsourcers.

    The Justice Department seems to be merely an enforcer of the protection racket that Congress has become. You pay for politicians and they go to bat for you and they steer the committees onto someone else until they get a huge donation.

    Mitch McConnell or Harry Reed get a bunch of Apple stock -- this goes away.

    I think E-Books should be a lot cheaper. The distribution is nothing compared to a paper book -- but publishers charge as much as they can -- nothing new.


    Our justice system is pathetic. It cannot find corrupt bankers, it cannot break up monopolies, but it can beat shop keepers up until they pay the Vig.
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