Posted on 03/07/2016 8:00:43 AM PST by Swordmaker
You keep repeating that like a broken record. . . but it is irrelevant.
Have you forgotten that Apple is NOT a publisher?
The LAW differentiates such participants, and THAT is what matters. It is what determines who is a horizontal participant and who is a horizontal participant. It does not matter what form the conspiracy takes. What matters is what rule you use on the PARTICIPANTS in that conspiracy. Each are to be judge separately. The per se rule can be used on the horizontal participants, those who are normally competitors but who have joined anti-competitively together in conspiracy to pursue joint goals.
That per se standard, according to the US Supreme Court, is the wrong rule to use on vertical participants who are not normally in competition with the other members of the group, and are not normally adversaries, but would normally considered cooperative partners in selling products.
Apple like Areeda & Hovenkamp , 2004, and Leegin, 2007, falls into that category, where the normal business would naturally lead the businesses to cooperate, not compete to further their mutual goals of selling their products. For those, the Rule of Reason must be used to see if competition is increased or if the participation of the vertical participant was designed to seize control of the market and limit or lock out others' participation. If the Court finds the later is the case, then the vertical participant is found guilty, but if it is the former, not guilty.
Why is this so hard for you to comprehend, Tex?
I have no problem grasping the differences. . . but then my background is business and economics. I inherently see the huge differences in outlook, philosophy, economic drivers, motives, and legal ramifications between a horizontal conspiracy of competitors joining together to pursue joint goals and those of an independent actor, working for its own enlightened self-interest.. YOU obviously do not grasp them, nor did the DOJ lawyers driving this case, Judge Cote, or the two justices of the 2nd Appellate Court District.
A horizontal conspiracy is defined in LAW and economics to be among organizations at the same level of competition who set aside their natural enmity to cooperate.
Apple is not a publisher, they don't compete with publishers, they don't sell eBooks to other retailers. They are a customer of the publishers, they essentially buy eBooks from publishers to resell them to consumers. . . just as Amazon is a customer of the publishers who in turn resells to consumers. . . as is Barnes & Noble. . . as is the book seller in the strip mall.
Apple could only be part of a horizontal conspiracy with like competitors, businesses with which they would have a natural enmity because of that competition and would be unlikely to have a cooperative relationship, forming a horizontal conspiracy with competitors such as Amazon, Barnes & Noble, and the book seller to raise eBook prices for their mutual benefit and profit, because, by definition, they are in the same tier of economic activity as Apple. That obviously did not happen.
No, Apple is competing AGAINST Amazon's Kindle books, Barnes & Noble's Nook books, and, in a way, the book seller in the strip mall's hard cover books and did not conspire with any of them to raise prices. Instead, Apple's supposedly anti-competitive but entirely legal contracts were, in every instance, clause, and paragraph, about competing against other companies in the same level as Apple, assuring that Apple would not be placed at a competitive disadvantage because of any potential anti-competitive actions of the publishers.
I have an attorney on my payroll. He is co-author with me on a series of books we are writing. In discussions, I've run what I've told you past him. He agrees in every major thing I've written to you (with a few quibbles, but every lawyer will quibble because I haven't used quite exactly the right legal word here and there, and it is the nature of lawyers to quibble.). He especially agrees you are a babe in the woods as far as legal theory and practice goes. You'd get chewed up and spit out in any legal argument because you don't even have a clue of the hierarchy of legal decisions and what trumps what.
Tex, he said to tell you the Law is not just what is written in the codes, it is what is in the legislated codes, plus over two centuries of case law and decisions made by the courts and the Supreme Court trying to interpret what amateurs in the legislatures have written and passed, plus thousands of regulations that have just as much force as legislated law. . . all of it making a mess of things because the legislators write 2700 page laws that are internally inconsistent and also inconsistent with the laws that are already on the books. They leave it to the courts to make those laws agree by interpreting them and excising the disagreements the older laws may have with the newer laws.
Again, Tex, WORDS MEAN THINGS in law, economics, as well as the English Language. You cannot willy-nilly redefine them merely because it is convenient or politically expedient to do so. If that happens, we no longer have a system of laws. Whatever the law is, is subject to change on the whims of Liberal Judges, as Apple has learned to the cost of $450 million.
I find it very telling that the DOJ chose to completely ignore the second section of the Sherman Antitrust Act:
"Section 2:
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony [. . . ]
You like to ignore that section also, where Amazon was concerned too. . . as you said above:
Me: "Was not turning off the “Buy” buttons of any publishers who raised their wholesale prices a “restraint of trade of trade or commerce” when the monopolist had 90% power in the market and could starve a supplier of sales?"
You: "Those actions would be outside the scope of the Sherman act as described in 15 U.S. Code § 1."
Obviously, you are totally wrong, as 15 U.S. Code § 2 quite explicitly states such actions by a monopolist would be felony. The Sherman act is more than just 15 U.S. Code § 1, but you ignored the existence 15 U.S. Code § 2. I'm still looking for your providing a citation of anti-competitive price fixing in the law. I told you it was established not by an enacted law but by a judge determining through CASE LAW that such price fixing was an anti-competitive action constituting an antitrust violation and survived a Supreme Court review, just like the Leegin, 2007, setting a precedent about Vertical participants being judged only by the Rule of Reason.
When an iOS device is turned on, its application processor immediately executes code from read-only memory known as the Boot ROM. This immutable code, known as the hardware root of trust, is laid down during chip fabrication, and is implicitly trusted.The Boot ROM code contains the Apple Root CA public key, which is used to verify that the Low-Level Bootloader (LLB) is signed by Apple before allowing it to load. This is the first step in the chain of trust where each step ensures that the next is signed by Apple. When the LLB finishes its tasks, it verifies and runs the next-stage bootloader, iBoot, which in turn verifies and runs the iOS kernel.
This secure boot chain helps ensure that the lowest levels of software are not tampered with and allows iOS to run only on validated Apple devices.
When interpreting a law, one must look at why it was passed in the first place. Laws are not introduced and passed in a vacuum.
"The purpose of the Sherman Act is not to protect competitors from harm from legitimately successful businesses , nor to prevent businesses from gaining honest profits from consumers, but rather to preserve a competitive marketplace to protect consumers from abuses ."
You have to look at the INTENT of the lawmakers and see if it is accomplishing what was intended. What did they say in their speeches when they introduced the bill. Look at the clause I've highlighted in green above. ". . . preserve a competitive marketplace to protect consumers from abuses."
In this instance, the complaint came from a competitor, Amazon, who complained that it had been harmed by Apple's entry into the market place. Do you see the clause I've highlighted in red above? ". . . not to protect competitors from harm from legitimately successful businesses. . ."? The Sherman Act is not to protect any one competitor from another entering the market, yet this whole, entire case was precipitated on that premise: to protect Amazon's monopoly. Do you think that the intent of the Sherman Antitrust Act was to protect an abusing monopoly? Yet that was the result of all of this.
You say it was not in the law. It doesn't have to be for the law to be about that specific purpose.
As explained by the U.S. Supreme Court in Spectrum Sports, Inc. v. McQuillan 506 U.S. 447 (1993):
The purpose of the [Sherman] Act is not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself.According to to the Sherman Act authors, it was not intended to impact market gains obtained by honest means, by benefiting the consumers more than the competitors. Senator George Hoar of Massachusetts, another author of the Sherman Act, said the following:
"... [a person] who merely by superior skill and intelligence...got the whole business because nobody could do it as well as he could was not a monopolist..(but was a monopolist if) it involved something like the use of means which made it impossible for other persons to engage in fair competition."
Senator Hoar's comments exactly fit Amazon's predatory pricing and blocking of the sales of rebellious publishers who raised their wholesale prices. Those are classic monopolistic anti-competitive practices. . . yet the politicized Department of Justice decided that because, in its ignorant judgement "low prices were popular" it would not enforce 15 U.S. Code § 2 of the Sherman Act. . . but it would, again politically, go after Apple who BROKE that monopoly using 15 U.S. Code § 1, even though it met every one of the Supreme Court's instructions in Leegin and was therefore completely legal.
It is on such statements of intent such as Senator Hoar's that case law is built, determining what is appropriate interpretation of the very simplistic two line law meant in determining what was restraint of trade and commerce and what was not.
There is no such thing as a vertical conspiracy anti-competitive case, Tex. That's like saying I am in a conspiracy with myself. Anti-competitive conspiracies can only occur across competitors . . . while there can be participants who are vertical, there are no vertical conspiracies, because by definition, the vertical participants are singular unless there are a host of them. In which case, you move to a horizontal conspiracy by definition.
Leegin was about a RETAIL company that was accused of participating with horizontal conspiracy of producers. The justices of the US Supreme Court ruled they could not be included.
Representation of dicta taken out of context, Tex. The Justices are merely explaining what the definition of per se is. I've already told you that, multiple times. What part of "competitors" do you fail to grasp? Apple is NOT a competitor with the Publishers. Apple did not publish books. Therefore if follows that it cannot be a competitor of companies that publish books. The publishers do not sell tablets, phones, or computers, therefore it follows that the publishers are not in competition with Apple.
How can Apple be included in the "horizontal agreement among competitors" you are talking about??? Apple cannot be in that class of competitors. It is simple logic. One of these things is not like the others. They teach that concept on Romper Room and Sesame Street. Are you telling me you can't grasp what three year olds are capable of grasping?
Which is exactly what I said. . . and posted to you, including the same quotation from the same link. My point has always been that a lot of this is in the Silicon. Not just in the Boot ROM. The Secure Enclave (iPhone 5s and above) or the Encryption Engine (iPhone 4S, 5C) has a lot etched in the silicon which you keep disputing. . . but Apple has described how it is done, what's in there, when it is put there, which I have also quoted to you. It is NOT all controlled merely by the Boot ROM.
Your assertion has been that it should be simple to get around it by writing code. . . to bypass all of this. Mine is that it is NOT so simple as you claim.
“Representation of dicta taken out of context, Tex. The Justices are merely explaining what the definition of per se is.”
I see you are NOT an English major! It is not explaining what ‘per se’ is. It is saying that horizontal agreements among competitors are illegal.
“Restraints that are per se unlawful include horizontal agreements among competitors to fix prices,”
“How can Apple be included in the “horizontal agreement among competitors” you are talking about??? “
You sound like a broken record. ANYONE and EVERYONE can be a participant in a horizontal agreement.
“”The purpose of the Sherman Act is not to protect competitors from harm from legitimately successful businesses , nor to prevent businesses from gaining honest profits from consumers, but rather to preserve a competitive marketplace to protect consumers from abuses .” “
If you follow that line, it protected the consumer from the conspiracy’s price increases as book prices fell back down when the publishers and Apple were sued.
“even though it met every one of the Supreme Court’s instructions in Leegin and was therefore completely legal. “
Again, Leegin was not a horizontal conspiracy and as such has no relevant point related to the Apple horizontal conspiracy.
Geez. You sound like a broken record.
“There is no such thing as a vertical conspiracy anti-competitive case, “
LOL! From your Leegin:
“To the extent a vertical agreement setting minimum resale prices is entered uponto facilitate either type of cartel, it, too, would need to beheld unlawful under the rule of reason.”
“Leegin was about a RETAIL company “
The beginning of the Leegin Judgment. Leegin was SELLING to retailers. Leegin was NOT a retail company.
“Given its policy of refusing to sell to retailers that discount its goods below suggested prices, petitioner (Leegin) stopped selling to respon-dent’s (PSKS) store. PSKS filed suit, alleging, inter alia, that Leeginviolated the antitrust laws by entering into vertical agreements withits retailers to set minimum resale prices.”
“Senator Hoar’s comments exactly fit Amazon’s predatory pricing and blocking of the sales of rebellious publishers who raised their wholesale prices. “
Actually, Amazon didn’t block sales but Amazon has every right to not sell books at prices above what they think the value is.
BTW, the publishers were taking 70%. Isn’t that a little steep considering the authors were only getting 10%!
“Those are classic monopolistic anti-competitive practices. . . yet the politicized Department of Justice decided that because, in its ignorant judgement “low prices were popular” it would not enforce 15 U.S. Code § 2 of the Sherman Act. “
Your referenced case makes it clear that there was no justification for going after Amazon.
From your referenced case:
The Court went on to explain, however, that not every act done with intent to produce an unlawful result constitutes an attempt. “It is a question of proximity and degree.” Id., at 402. Swift thus indicated that intent is necessary, but alone is not sufficient, to establish the dangerous probability of success that is the object of 2’s prohibition of attempts. 7 - See more at: http://caselaw.findlaw.com/us-supreme-court/506/447.html#sthash.dGRWYWbr.dpuf
“Have you forgotten that Apple is NOT a publisher?”
Have you forgotten that Apple WAS a member of the conspiracy?
Thanks for the reminder of the Anandtech Article which I posted when it first was published. I was roundly criticized by the Apple Hate Brigade members for posting it. . . They claimed it was just more Apple propaganda, full of lies, generally without bothering to read it.
I’m not sure how they arrived at that conclusion. It’s a very good article, full of lots of information. It’s common knowledge in the industry that Apple has an advantage over the vendors that are just licensing the stock ARM IP and adding peripherals (i.e. Broadcom).
“You keep repeating that like a broken record. . “
You sound like my neighbor that keeps insisting his 6S+ has fast charging, wireless charging and NFC!
Sigh! Tex. Tex. Tex. I posted the entire section that was taken from, not just the single sentence. . . I am very familiar with where YOU got it. Don't try to sound erudite when you obviously are not. You cannot extract a single sentence
Legion mentions Horizontal conspiracies 12 times in reversing the Leegin conviction. . . each time showing how a VERTICAL participant did not qualify as a member of a horizontal conspiracy.
"The rule of reason does not govern all restraints. Some types “are deemed unlawful per se.” Khan, supra, at 10. The per se rule, treating categories of restraints as necesarily illegal, eliminates the need to study the reasonableness of an individual restraint in light of the real market forces at work, Business Electronics Corp. v. Sharp Electronics Corp., 485 U. S. 717, 723 (1988); and, it must be acknowledged, the per se rule can give clear guidance for certain conduct. Restraints that are per se unlawful in clue horizontal agreements among competitors to fix prices, see Texaco, supra, at 5, or to divide markets, see Palmer v. BRG of Ga., Inc., 498 U. S. 46, 49–50 (1990) (per curium).Resort to per se rules is confined to restraints, like those mentioned, “that would always or almost always tend to restrict competition and decrease output.” Business Electronics, supra, at 723 (internal quotation marks omitted). To justify a per se prohibition a restraint must have “manifestly anticompetitive” effects, GTE Sylvania, supra, at 50, and “lack . . . any redeeming virtue,” Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., 472 U. S. 284, 289 (1985) (internal quotation marks omitted).
Three of them are in the following paragraph (Dr. Miles was the case the lower court had relied on in finding Leegin guilty):
"Dr. Miles, furthermore, treated vertical agreements a manufacturer makes with its distributors as analogous to a horizontal combination among competing distributors. See 220 U. S., at 407–408. In later cases, however, the Court rejected the approach of reliance on rules governing horizontal restraints when defining rules applicable to vertical ones. See, e.g., Business Electronics, supra, at 734 (disclaiming the “notion of equivalence between the scope of horizontal per se illegality and that of vertical per se illegality”); Maricopa County, supra, at 348, n. 18 (noting that “horizontal restraints are generally less defensible than vertical restraints”). Our recent cases formulate antitrust principles in accordance with the appreciated differences in economic effect between vertical and horizontal agreements, differences the Dr. Miles Court failed to consider."
Then again at:
"A horizontal cartel among competing manufacturers or competing retailers that decreases output or reduces competition in order to increase price is, and ought to be, per se unlawful. See Texaco, 547 U. S., at 5; GTE Sylva- via, 433 U. S., at 58, n. 28. To the extent a vertical agreement setting minimum resale prices is entered upon to facilitate either type of cartel, it, too, would need to be held unlawful under the rule of reason. This type of agreement may also be useful evidence for a plaintiff attempting to prove the existence of a horizontal cartel.
Another at:
". . .Antitrust L.J. 407, 446–447 (1997) (indicating that “antitrust law should recognize that the consumer interest is often better served by [resale price maintenance]—contrary to its per se illegality and the rule-of-reason status of vertical nonprime restraints”). The same legal standard (per se unlawfulness) applies to horizontal market division and horizontal price fixing because both have similar economic effect. There is likewise little economic justification for the current differential treatment of vertical price and nonprice restraints. Furthermore, vertical nonprice restraints may prove less efficient for inducing desired services, and they reduce intrabrand competition more than vertical price restraints by eliminating both price and service competition. See Brief for Economists as Amici Curiae 17–18.
And finally,
"For these reasons the Court’s decision in Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U. S. 373 (1911), is now overruled. Vertical price restraints are to be judged according to the rule of reason.V
Noting that Leegin’s president has an ownership interest in retail stores that sell Brighton, respondent claims Leegin participated in an unlawful horizontal cartel with competing retailers. Respondent did not make this allegation in the lower courts, and we do not consider it here.
The judgment of the Court of Appeals is reversed, and the case is remanded for proceedings consistent with this opinion.
It is so ordered.
The most important sentence in the entire Leegin decision is the second sentence in the blockquote above. It is a plain, very unambiguous English sentence that leave no question about its meaning:
The FOUR Liberal Justices of the Supreme Court joined in a Dissent written by Justice Breyer, where Horizontal was mention twice.
As I have maintained, they want to go back a CENTURY to where every thing is illegal because BUSINESS, for what ever purpose, is BAD. Their arguments seem to surround purely price arguments, and not competition and not free markets. They rely a lot on theoretical arguments proposed by academic theoretical economists. . . something I, as an economist, do not recommend. It's really quite amusing, as the dissent waxes philosophical with what if this, or what if that, that bears little if anything to do with reality. For example:
"To be more specific, one can easily imagine a dealer who refuses to provide important presale services, say a detailed explanation of how a product works (or who fails to provide a proper atmosphere in which to sell expensive perfume or alligator billfolds), lest customers use that “free” service (or enjoy the psychological benefit arising when a high-priced retailer stocks a particular brand of billfold or handbag) and then buy from another dealer at a lower price. Sometimes this must happen in reality. But does it happen often?"We do, after all, live in an economy where firms, despite Dr. Miles’ per se rule, still sell complex technical equipment (as well as expensive perfume and alligator billfolds) to consumers.
All this is to say that the ultimate question is not whether, but how much, “free riding” of this sort takes place. And, after reading the briefs, I must answer that question with an uncertain “sometimes.”
What world is Breyer living in?
My iPhone 6S does have NFC. How do you think that ApplePay works? My Apple Watch has wireless charging. My Apple Watch also has NFC.
I don't give a rap about fast charging. That has downsides.
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