Apple asks US Supreme Court to toss ruling upholding e-book antitrust verdict

Posted:
in General Discussion edited October 2015
Apple has formally asked the U.S. Supreme Court to overturn a lower appeals court ruling from June, which upheld a judgment that Apple violated antitrust laws in its 2010 e-book dealings with publishers.




Backing the 2nd U.S. Circuit Court of Appeals would "chill innovation and risktaking," and even "harm competition and the national economy," Apple claimed in its petition, seen by Reuters. The company further suggested that the 2nd Circuit broke with precedent set by the Supreme Court.

Word that Apple was aiming to take the case to the highest levels emerged in mid-September, when the company filed for a 30-day extension on the deadline to submit a Supreme Court challenge.

In July 2013, U.S. District Judge Denise Cote sided with Justice Department and found that Apple conspired with publishers to artificially inflate e-book prices, based on evidence like emails from former CEO Steve Jobs. Although Amazon's then-standard $10 pricetag was allegedly the main target, Apple's tactics -- legal or illegal -- forced standard prices up several dollars across the industry.

Should the Supreme Court support the 2nd Circuit, Apple will owe $450 million to states and consumers as part of a 2014 settlement agreement. At the least, however, the company has already managed to free itself from a court-appointed antitrust monitor.

Comments

  • Reply 1 of 13

    Sue Judge Cote and Bromwich to get that money back also.

  • Reply 2 of 13
    I believe the correct technical term for the Amazon price control for ebooks is monopsony.

    If that is the case, I don't think there are any laws against it.
  • Reply 3 of 13
    freerangefreerange Posts: 1,597member
    Amazing that Apple's efforts actually increased competition and temporarily thwarted a near monopoly / monopoly in ebooks by a company using predatory pricing behaviors to lock out competition. This was one of the most wrongheaded judgements in recent memory.
  • Reply 4 of 13
    ronboronbo Posts: 669member

    Either way, Amazon won.

  • Reply 5 of 13
    buzdotsbuzdots Posts: 452member

    Wonder what Michael Bromwich's total bill was?

    $450,000,000.00 is pocket change to get rid of that prick.

     

    If they prevail at SCOTUS, then they should be awarded damages from Cote and her Brombitch to the tune of his fees and her Judgeship.

  • Reply 6 of 13
    ruddyruddy Posts: 94member
    Quote:

    Originally Posted by Suddenly Newton View Post



    I believe the correct technical term for the Amazon price control for ebooks is monopsony.



    If that is the case, I don't think there are any laws against it.



    Well that isn't the case. The legal issue and proper antitrust term is "market power." Market Power has to do with a company's ability to set prices in the market. Abusing it, like Amazon was doing in the ebooks market, using its market power (aka monopoly or monopsony power) to keep prices at or below cost and thereby excluding retail competition from the market. It's textbook anticompetitive, but the DoJ totally dropped the ball because their head economists' pet peeve was trying to prove that MFN clauses in contracts are evil, even after the Supreme Court said they weren't in 2007.  

  • Reply 7 of 13
    ecatsecats Posts: 272member
    Quote:
    Originally Posted by Suddenly Newton View Post



    I believe the correct technical term for the Amazon price control for ebooks is monopsony.



    If that is the case, I don't think there are any laws against it.



    It's surprisingly easy to set up too, you just need to loss lead in a consumable category while making up the loss in another. Apple could, but doesn't, do this with Apple Music. Their large profits could allow them to grant long periods of free music, and (like Amazon) just build the cost into smaller titles/other products. It evaporates any competing business because no one wants to compete with "free", and it's not good for consumers because the controlling business can then set the prices paid to the 3rd party industry, since there will be few, if any, other buyers.

     

    According to Cote et al this should be good for consumers because it's no cost, the reality is that it stymies all new creative to an ever tightening price boundary, and significantly reduces choice as a result. Instead what the consumer gets is lots of homogenous, low quality content trying to maximise profits in the framework available. (Exactly what is happening on Amazon now.) The lesson is that you can't treat creative content in the same way you'd sell commodity items.

     

    The other downside to this tactic is that it barely turns a profit for the controlling company, again just like Amazon who now is trapped in the tactic since they have no other tools to compete on such a level. We've seen their attempts at competing in phones and tablet devices - they stink and sunk.

     

    Now compare Amazon's approach to books to Apple's approach to music. The music industry has instead recovered and continues to put out a significant array of new and experimental artists. Prior to this they were stuck in a death-spin and focusing almost exclusively on Britney Spears/Boy-bands style pop. Meanwhile Amazon's book offerings have been accused of using bait-chapters/titles and very short, very familiar, stories in order to rack up high numbers of downloads for minimal creative effort.

  • Reply 8 of 13
    dasanman69dasanman69 Posts: 13,002member
    I believe the correct technical term for the Amazon price control for ebooks is monopsony.

    If that is the case, I don't think there are any laws against it.

    There would only be one buyer in a monopsony. If you make Stingray missiles, or fighter jets there will be only one buyer and that would be the US government.
  • Reply 9 of 13
    Quote:
    Originally Posted by dasanman69 View Post





    There would only be one buyer in a monopsony. If you make Stingray missiles, or fighter jets there will be only one buyer and that would be the US government.



    Except that to make those "Stingray", you go through a long process of due competition, which makes the workforce highly sought after in the competing businesses.  That would eliminate said companies from the definition of a monopsony. Even on very specialised markets like the refuelling tanker, competition involves both pure US players and foreign providers https://en.wikipedia.org/wiki/KC-X

     

    Also, I thought Stingray missiles were BattleTech technology, maybe you were referring to Sting Ray torpedos, the UK weapon, or I'm just unaware of a weapon system's existence ;)

  • Reply 10 of 13
    Quote:

    Originally Posted by ECats View Post

     Meanwhile Amazon's book offerings have been accused of using bait-chapters/titles and very short, very familiar, stories in order to rack up high numbers of downloads for minimal creative effort.



    And they are so desperate of having new content that they have gone to "publish your own content" ads towards everyone.

  • Reply 11 of 13
    dasanman69dasanman69 Posts: 13,002member
    dasanman69 wrote: »
    There would only be one buyer in a monopsony. If you make Stingray missiles, or fighter jets there will be only one buyer and that would be the US government.


    Except that to make those "Stingray", you go through a long process of due competition, which makes the workforce highly sought after in the competing businesses.  That would eliminate said companies from the definition of a monopsony. Even on very specialised markets like the refuelling tanker, competition involves both pure US players and foreign providers https://en.wikipedia.org/wiki/KC-X

    Also, I thought Stingray missiles were BattleTech technology, maybe you were referring to Sting Ray torpedos, the UK weapon, or I'm just unaware of a weapon system's existence ;)

    There can be many companies making the missiles but they all sell to one buyer.
  • Reply 12 of 13
    Quote:

    Originally Posted by dasanman69 View Post





    There can be many companies making the missiles but they all sell to one buyer.

    Ah I see what you mean: seeing the companies as the "worker" and the government as the "employer", there would be a monopsony.

     

    It is however not really true, because those companies are free to sell similar planes to other countries (and they do), and because it's comparing an individual looking for a job and a corporation trying to obtain a contract, two very different concepts.

  • Reply 13 of 13
    dasanman69 wrote: »
    There can be many companies making the missiles but they all sell to one buyer.
    Unless your talking about the French. They'll sell to anyone ????
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