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

Posted:
in General Discussion edited March 2014
Apple on Tuesday filed an appeal over a U.S. district court ruling that found the company responsible for e-book price-fixing, requesting a reversal of the decision or, barring that, a new trial in front of a new judge.

Summation
Apple's closing slide in its e-book antitrust case. | Source: U.S. District Court


As seen in the appellate opening brief filed with the U.S. Court of Appeals for the Second Circuit, Apple is looking to overturn District Court Judge Denise Cote's July 2013 ruling, which found the company culpable for colluding with five major book publishers to falsely inflate the cost of e-books sold through the iBookstore. The antitrust case was leveled by the Department of Justice in an amended complaint over two years ago.

A brief introductory statement inserts a few fresh arguments into Apple's case against, while rehashing older claims that the iBookstore and iPad created, not stifled, competition in the e-book space.
The district court's ruling that Apple, in the very act of launching the iPad, inventing the iBooks Store, and entering the e-books market, violated the Sherman Act is a radical departure from modern antitrust law and policy. If allowed to stand, the ruling will stifle innovation, chill competition, and harm consumers.
Apple goes on to point out Amazon's dominant position in the market, which at the time of the iBookstore's launch accounted for nine out of every ten e-book sales. Counsel previously argued these statistics in front of Judge Cote last year.

The brief clarified that the district court's decision "did not find that 'Apple itself desired higher e-book prices than those offered at Amazon.'" (emphasis in original) Instead, the court found the iPad to have "encouraged innovation and competition."

Apple argues that Judge Cote "repeatedly" applied incorrect legal standards when considering her decision, which consequently led to a "false conclusion of a price-fixing conspiracy."

The document gives a rundown of the U.S. v. Apple antitrust proceedings, including a section on the hotly contested pricing models used by Apple and, as a comparison provided by the DOJ, Amazon.

Amazon employed a so-called "wholesale model" in its e-book sales. Under the scheme, retailers buy content from publishers in bulk and set resale prices at or below cost to move units. According to in-court testimony, the strategy sometimes brought massive discounts to new e-book titles that would otherwise have sold for much more.

Amazon allegedly used the wholesale model to sell its Kindle e-reader, which controlled as much as 90 percent of the market by 2009.

When Apple entered the market, it used an "agency model." The agency model is based on a "most favored nations" clause that disallows content owners to sell their wares to another retailer for a lower price.

Apple's agency model contracts were central to the DOJ's case. The government argued that Amazon's wholesale model was negatively impacted as a result of Apple's deals, which ultimately trickled down to consumers as the Internet retail giant was no longer able to compete on price.

As part of Judge Cote's ruling, Apple was saddled with an injunction barring the company from entering into any unsavory deals with publishers. Antitrust watchdog Michael Bromwich was also assigned to keep an eye on Apple. Bromwich and Apple have butted heads since he was installed last October.

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Comments

  • Reply 1 of 98
    One message for you Mr. Bromwich:

    {goto fail}
  • Reply 2 of 98
    good, they should appeal this.
  • Reply 3 of 98
    "The brief clarified that the district court's decision "did not find that 'Apple itself desired higher e-book prices than those offered at Amazon." (emphasis in original) Instead, the court found the iPad to have "encouraged innovation and competition."

    Oh really? Trying to rewrite history are we?


    "...records of Apple saying it "cannot tolerate a market where the product is sold significantly more cheaply elsewhere." And some of the most damning statements, Cote said, came all the way from the top of Apple.

    "Compelling evidence of Apple's participation in the conspiracy came from the words uttered by Steve Jobs, Apple's founder, CEO, and visionary. Apple has struggled mightily to reinterpret Jobs's statements in a way that will eliminate their bite. Its efforts have proven fruitless." In one statement, Jobs told James Murdoch that Amazon's $9.99 sales were "eroding the value perception" of its products, and that Apple would be trying higher price points. This was confirmed at launch. "Jobs's purchase of an e-book for $14.99 at the Launch, and his explanation to a reporter that day that Amazon's $9.99 price for the same book would be irrelevant because soon all prices will "be the same" is further evidence that Apple understood and intended that Amazon's ability to set retail prices would soon be eliminated."

    Jobs' statements, Cote said, "remain powerful evidence of conspiratorial knowledge and intent."

    http://www.theverge.com/2013/7/10/4510338/apple-found-guilty-of-ebook-price-fixing
  • Reply 4 of 98
    fracfrac Posts: 480member
    With a handle like yours, I would expect no less, but you are still wrong. With selective quotes of evidence you can make up any point of view...and you did. Predictable.
    I could have predicted a different response if my morning Kenyan AA had already brewed.
  • Reply 5 of 98
    Oh. My god. Enough. You lost. Get over it. You can't control everything, Tim.
  • Reply 6 of 98
    gtrgtr Posts: 3,231member
    cash907 wrote: »
    Oh. My god. Enough. You lost. Get over it. You can't control everything, Tim.

    I can sense your expertise in all matters legal.

    It happened around about the time when you declared a case that still contained the legal option of appealing 'lost'.
  • Reply 7 of 98
    gtrgtr Posts: 3,231member
    I don't think it's too much to ask for:

    1). A judge that doesn't declare their intention to find an entity guilty before anything has even been heard.
    2). A judge that doesn't just happen to place well known friends into well-paying positions created by such rulings.
  • Reply 8 of 98
    gtr wrote: »
    I don't think it's too much to ask for:

    1). A judge that doesn't declare their intention to find an entity guilty before anything has even been heard.
    2). A judge that doesn't just happen to place well known friends into well-paying positions created by such rulings.

    Adding to your list...
    3) Not allowing a competitor witness to sit on the witness stand for the prosecution to state his company lawyers wrote the response for him then using the response as credible evidence.
    4) Reading multiple emails containing a man's working thought processes concerning possible paths to take then choosing to condemn him for having the thoughts even he chose not to take those paths.
  • Reply 9 of 98
    Quote:

    Originally Posted by GTR View Post



    I don't think it's too much to ask for:



    1). A judge that doesn't declare their intention to find an entity guilty before anything has even been heard.

    2). A judge that doesn't just happen to place well known friends into well-paying positions created by such rulings.

     

    1. The pre-trial opinion was solicited, not spontaneous. If a Judge is not allowed to have an opinion before a case then you will find no judge suitable

    2. Please provide evidence that Bromwich was a 'well known friend' and why this would be a bad thing for the Judge to appoint someone she knows is talented.

  • Reply 10 of 98
    Quote:

    Originally Posted by leavingthebigG View Post





    Adding to your list...

    3) Not allowing a competitor witness to sit on the witness stand for the prosecution to state his company lawyers wrote the response for him then using the response as credible evidence.

    4) Reading multiple emails containing a man's working thought processes concerning possible paths to take then choosing to condemn him for having the thoughts even he chose not to take those paths.

     

    Why should either of these happen? Emails that were written are evidence. Witnesses are allowed to take legal advice too you know.

  • Reply 11 of 98
    gtrgtr Posts: 3,231member
    1. The pre-trial opinion was solicited, not spontaneous. If a Judge is not allowed to have an opinion before a case then you will find no judge suitable
    2. Please provide evidence BLAH BLAH BLAH

    Sorry, but I refuse to engage in a battle of wits with an unarmed person.
  • Reply 12 of 98
    Why should either of these happen? Emails that were written are evidence. Witnesses are allowed to take legal advice too you know.
    Why should either of these happen? Emails that were written are evidence. Witnesses are allowed to take legal advice too you know.

    Aren't you the guy from the UK who defended Cote so vociferously last year?

    First, having a lawyer is fine. No problem there. When a written testimony is provided to the prosecution with your signature, I would expect the written testimony to have at least been read just for a bit of self-ass covering. The DOJ placed the written testimony as evidence against Apple. When Apple's lawyers questioned the witness about the written testimony, the witness said written testimony had been written by company lawyers. The witness could not testify to the content of the written document containing the witness' signature! So, why was the Google employee there for the DOJ against Apple? To represent Google's interests through lawyers.
  • Reply 13 of 98
    russell wrote: »
    "The brief clarified that the district court's decision "did not find that 'Apple itself desired higher e-book prices than those offered at Amazon." (emphasis in original) Instead, the court found the iPad to have "encouraged innovation and competition."

    Oh really? Trying to rewrite history are we?


    "...records of Apple saying it "cannot tolerate a market where the product is sold significantly more cheaply elsewhere." And some of the most damning statements, Cote said, came all the way from the top of Apple.

    "Compelling evidence of Apple's participation in the conspiracy came from the words uttered by Steve Jobs, Apple's founder, CEO, and visionary. Apple has struggled mightily to reinterpret Jobs's statements in a way that will eliminate their bite. Its efforts have proven fruitless." In one statement, Jobs told James Murdoch that Amazon's $9.99 sales were "eroding the value perception" of its products, and that Apple would be trying higher price points. This was confirmed at launch. "Jobs's purchase of an e-book for $14.99 at the Launch, and his explanation to a reporter that day that Amazon's $9.99 price for the same book would be irrelevant because soon all prices will "be the same" is further evidence that Apple understood and intended that Amazon's ability to set retail prices would soon be eliminated."

    Jobs' statements, Cote said, "remain powerful evidence of conspiratorial knowledge and intent."

    http://www.theverge.com/2013/7/10/4510338/apple-found-guilty-of-ebook-price-fixing

    I love Steve Jobs but I don't have to be thrilled that he told content holders to use an agency model, which means don't sell your stuff for less anywhere. I remember searching online, why are ebook prices so high, and seeing many other people asked the same thing in forums and question answer sites. Unfortunately, this probably has a lot to do with it.
  • Reply 14 of 98
    Quote:

    Originally Posted by leavingthebigG View Post







    Aren't you the guy from the UK who defended Cote so vociferously last year?

    No, I joined the site this year.

     

    Quote:


    First, having a lawyer is fine. No problem there. When a written testimony is provided to the prosecution with your signature, I would expect the written testimony to have at least been read just for a bit of self-ass covering. The DOJ placed the written testimony as evidence against Apple. When Apple's lawyers questioned the witness about the written testimony, the witness said written testimony had been written by company lawyers. The witness could not testify to the content of the written document containing the witness' signature! So, why was the Google employee there for the DOJ against Apple? To represent Google's interests through lawyers


    Thank you for clarifying. Having said that, I'm sure we could dismiss Apple witnesses in the same manner, as they acted in a similar fashion to this.

  • Reply 15 of 98
    1. The pre-trial opinion was solicited, not spontaneous. If a Judge is not allowed to have an opinion before a case then you will find no judge suitable
    2. Please provide evidence that Bromwich was a 'well known friend' and why this would be a bad thing for the Judge to appoint someone she knows is talented.

    You are already aware of the friendship. Playing this game is a favorite tactic of yours.

    Are you serious here... "someone she knows is talented"? The man admitted he does not have the necessary skills and requires help from others with experience to do his job. Still, he was chosen!
  • Reply 16 of 98
    Quote:

    Originally Posted by leavingthebigG View Post





    You are already aware of the friendship. Playing this game is a favorite tactic of yours.

    Yes it's called 'asking for evidence'. The only evidence anyone has presented to me is that she endorsed him 19 years ago.

     

    Now, I'm sorry if I am a distant friend, but I can't think of anyone I would consider a good friend that I endorsed nearly 2 decades ago and did nothing else since.

     

    Quote:


    Are you serious here... "someone she knows is talented"? The man admitted he does not have the necessary skills and requires help from others with experience to do his job. Still, he was chosen!


    He has the skills and experience as a monitor, that doesn't mean he's an antitrust lawyer. Should Apple only have a single legal representative as they should be able to deal with the whole trial themselves? I fail to see how a team is somehow this incredibly objectionable thing.

  • Reply 17 of 98

    Apple could have settled with the DOJ before the trial like the editors.

    They probably wouldn't have Bromwich on their neck right now.

     

    Apple could have accepted the first ruling, thus not risking further annoyances.

     

    But no, Apple filed an appeal.

     

    Do you really think that one of the world biggest company is ruled by a horde of headless childish monkeys?

    It's pretty funny to watch self-appointed experts claiming that everything in this case is crystal clear while people at the head of Apple are precisely betting otherwise.

  • Reply 18 of 98
    tbelltbell Posts: 3,146member
    Quote:
    Originally Posted by ItsTheInternet View Post

     

     

    1. The pre-trial opinion was solicited, not spontaneous. If a Judge is not allowed to have an opinion before a case then you will find no judge suitable

    2. Please provide evidence that Bromwich was a 'well known friend' and why this would be a bad thing for the Judge to appoint someone she knows is talented.


    The problem with your view is a Judge is supposed to have the appearance of impartiality. She should not give a view on a case until she makes a ruling. Doing so improperly influenced the parties. It let the Department of Justice know which way she would likely rule. Moreover, Thomas Penfield, the Judge in the Microsoft anti-trust case was removed for giving his opinion to a reporter concerning Microsoft's guilt AFTER the case was over and he made a ruling that Microsoft was guilty of violating the Sherman Trust Act. So, the Judge should not have given an opinion. 

     

    As to your second question. Why would the Judge appoint somebody who charges over a thousand dollars an hour, and has no anti-trust experience? You'd think perhaps the judge would hire somebody who actually knows a little bit about anti-trust law. Instead, the so called anti-trust monitor has to go hire another lawyer who actually knows something about anti-trust law to do his job, and both bill out at over a thousand dollars an hour. Why have somebody else do your work for you? Do an internet search. Judge Cotes and Bromwhich worked together back in the 70s at the Justice Department. Bromwhich also was appointed as the US Inspector General despite him having a conflict of interest. Judge Cotes advocated for him to get the job. They are friends without question. The Wallstreet Journal throughly covers the problems with appointing Bromwhich, the Judges friend. 

  • Reply 19 of 98
    tbelltbell Posts: 3,146member
    Quote:
    Originally Posted by Twisell View Post

     

    Apple could have settled with the DOJ before the trial like the editors.

    They probably wouldn't have Bromwich on their neck right now.

     

    Apple could have accepted the first ruling, thus not risking further annoyances.

     

    But no, Apple filed an appeal.

     

    Do you really think that one of the world biggest company is ruled by a horde of headless childish monkeys?

    It's pretty funny to watch self-appointed experts claiming that everything in this case is crystal clear while people at the head of Apple are precisely betting otherwise.


     

     

    Hey, here is an idea. Perhaps, Apple, like myself, actually thinks it didn't do anything wrong? Perhaps, it wants to exercise its rights under the Constitution to have an Appeal Court hear its case. 

  • Reply 20 of 98
    Quote:

    Originally Posted by AppleInsider View Post



    Amazon employed a so-called "wholesale model" in its e-book sales. Under the scheme, retailers buy content from publishers in bulk and set resale prices at or below cost to move units. According to in-court testimony, the strategy sometimes brought massive discounts to new e-book titles that would otherwise have sold for much more.



    Amazon allegedly used the wholesale model to sell its Kindle e-reader, which controlled as much as 90 percent of the market by 2009.



    When Apple entered the market, it used an "agency model." The agency model is based on a "most favored nations" clause that disallows content owners to sell their wares to another retailer for a lower price.



    Apple's agency model contracts were central to the DOJ's case. The government argued that Amazon's wholesale model was negatively impacted as a result of Apple's deals, which ultimately trickled down to consumers as the Internet retail giant was no longer able to compete on price.

     

     

    It's always surprising that justice stands with a monopoly. 

     

    I do understand that, from a strict (and narrow) point of view, a model that lower the price for consumers may be seen positive. However, is it the role of justice to decide what is better: a model that "protects" consumers or a model that "protects" the companies (editors) that produce the goods (books)?

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