U.S. Supreme Court rejects Apple appeal over $450 million e-book case

Mac Daily News ^ | March 7, 2016

[Swordmaker]

“The Supreme Court has rejected an appeal from Apple Inc. and left in place a ruling that the company conspired with publishers to raise electronic book prices when it sought to challenge Amazon.com’s dominance of the market,” The Associated Press reports.

“The justices’ order on Monday lets stand an appeals court ruling that found Cupertino, California-based Apple violated antitrust laws in 2010,” AP reports. “The 2-1 ruling by the New York-based appeals court sustained a trial judge’s finding that Apple orchestrated an illegal conspiracy to raise prices. A dissenting judge called Apple’s actions legal, ‘gloves-off competition.'”

“Apple Inc. must pay $450 million to end an antitrust suit after the U.S. Supreme Court refused to question a finding that the company orchestrated a scheme to raise the prices for electronic books,” Greg Stohr reports for Bloomberg. “The accord calls for Apple to pay $400 million to e-book consumers, $20 million to the states, and $30 million in legal fees.”

“At the Supreme Court, Apple argued that its actions enhanced competition by providing consumers with a new e-book platform. The company said overall e-book prices have fallen in the years since the introduction of iBookstore [sic],” Stohr reports. “‘Following Apple’s entry, output increased, overall prices decreased, and a major new retailer began to compete in a market formerly dominated by a single firm,’ the company said in its appeal.”

Read more in the full article here.

MacDailyNews Take: Travesty. Justice was not served in this case.

[TexasGator]

“plus I am an Economist. “

I once stayed at a Holiday Inn ...

[CodeToad]

“I don’t understand how you say Apple customers would not be at a disadvantage when Apple would charge them $14.99 versus the previous Amazon price of $9.99.”

Because to the liberals at Apple reality is what they claim it is. To liberals, words are actions.

[TexasGator]

“The vast majority of eBooks are now selling at lower costs than ever before because of more competition. .”

hmmm. Are you saying that is one of the positive outcomes of the anti-trust suit against Apple?

[dennisw]

Apple is the classic model for (over_the_top) predatory pricing and these Cupertino foam party boys are b!tching about what Amazon does on book pricing. What chutzpah!

Looks like a good judge called them on their BS.
Plus Tim Cook was at that recent oligarchs/high tech honchos/Karl Rove meeting to stop Trump via tens of millions in immediate funding of anti-Trump super pac TV and radio advertising in targeted primary states

[TexasGator]

“Apple offered them an Agency Model sales program, “

With a price structure that would force them to raise prices.

[TexasGator]

“The publishers were losing money overall because of the predatory pricing being done by Amazon.”

From my previous link:

“Amazon was so hopeful that the Publisher Defendants would relent and revert to a wholesale model once they saw how much money they were losing with the agency model that it added a “model-parity” clause in its agreements.”

[Swordmaker]

“I don’t understand how you say Apple customers would not be at a disadvantage when Apple would charge them $14.99 versus the previous Amazon price of $9.99.”

Because to the liberals at Apple reality is what they claim it is. To liberals, words are actions.

Not being an economists, neither of you would understand that consumer advantages are NOT necessarily measure solely by low prices. There are other such consumer advantages such as multiple points of market access, access to multiple authors, quality editing, book selection, all of which were waning under the model that Amazon was pushing because the loss of hardcover sales was making it difficult to pay the authors, impacting the editing process, and even to find and select quality books.

The US Supreme Court's own guidelines on vertical cooperation v. horizontal cooperation and the differences recognized those differences and stated that a mere increase in pricing is NOT and should never be used as evidence of price fixing because of those consumer benefits. They stated if those benefits resulted, then it cannot be considered per se price fixing! Only horizontal cooperation is per se price fixing and therefor illegal. They also instructed that if there was a legitimate BUSINESS reason for the behavior of the VERTICAL participant, it was not illegal! The The Supreme Court instructed all lower courts to use these guidelines in ALL such cases. . . and Judge Côte did not, nor did the two concurring Justices of the appellate court! Every single one of those things was present in the Apple case. That is why it was so generally though the SC would reverse, because that was the STATE OF THE LAW AS ESTABLISHED BY THE VERY COURT APPLE HAD APPEALED TO! Judge Côte, in her decision, created out of whole cloth a joint meeting on December 15, 2009, between Apple and all six major publishers for which there was zero testimony, zero evidence, and was not even in the case as presented by the government, which according to the testimony of ALL the witnesses NEVER HAPPENED! From the last page of the link to Judge Denise Côte's decision provided by TexasGator:

It is THIS fictitious meeting which Judge Côte constructs her case against Apple as the ringleader of the "conspiracy," and on which the 33 state Attorneys General based THEIR cases.

Are you aware that Judge Côte actually announced she had WRITTEN her decision before the case even STARTED? Before she heard even a shred of testimony? That's what she said. She has a reputation for doing that in every single case she hears. She has NOT ONCE found for a defendant, ever. She assumes that they must proves they're innocent; if the government brings a case against them, they must be guilty. QED. For these reasons, she has the worst rating of any Judge in the New York district, with only a three star rating for legal knowledge, and an overall ONE STAR rating, a rating of "Very Bad".

And, yes TexasGator, I've read every word of Judge Côte's decision long before you did. I've also read every word of both Concurring Justices decisions and the Justice who wrote a scathing rebuttal to their poor decision actually based on the LAW as it stood, rather than going back to laws that had been invalidated by later decisions. He was appalled at Judge Cote's behavior and decision, and his colleagues lack of legal rigor in their decision.

[Swordmaker]

"The vast majority of eBooks are now selling at lower costs than ever before because of more competition. .”

hmmm. Are you saying that is one of the positive outcomes of the anti-trust suit against Apple?

No, the average price of eBooks had dropped BEFORE the true monopolist and predatory pricing offender, Amazon filed its complaint with the DOJ. That's the real absurdity of this case. The monopolist and real offender who used predatory pricing files a complaint with the government that THEIR monopoly position was damaged by the entry of a competitor that resulted more competition which consequently demonstrably provided LOWER overall pricing, MORE choices, better quality, and a healthier eBook and hard back publishing industry for consumers.

[CodeToad]

Just more of you posting Apple social media talking points.

[TexasGator]

“The US Supreme Court’s own guidelines on vertical cooperation v. horizontal cooperation and the differences recognized those differences and stated that a mere increase in pricing is NOT and should never be used as evidence of price fixing because of those consumer benefits. They stated if those benefits resulted, then it cannot be considered per se price fixing! Only horizontal cooperation is per se price fixing and therefor illegal.”

And Apple without a doubt participated in a horizontal cooperation conspiracy!

[TexasGator]

Uh, you are ignoring the graph that showed a jump up in prices IMMEDIATELY upon completion of the conspiracy.

1. Apple engaged in a conspiracy to raise prices and

2. Prices went up drastically, IMMEDIATELY.

[Swordmaker]

And Apple without a doubt participated in a horizontal cooperation conspiracy!

It is not possible. In the market Apple was not even yet a participant, but was going to be, by definition, a RETAILER, a VERTICAL relationship, NOT a HORIZONTAL publisher or wholesaler of eBooks to other retailers. The only way Apple could be in a horizontal conspiracy would be if Apple cooperated with Amazon to fix prices. Apple did NOT at any time approach or discuss pricing with Amazon.

If the government were correct, every time a retailer sent a price list or a contract offering to sell a product line to multiple suppliers with the same terms, it would be a conspiracy. EVERY ACTION APPLE UNDERTOOK WAS COMPLETELY LEGAL. The government claimed that doing completely legal actions somehow became illegal. A patently illogical legal theory.

That is why you are mistaken. . . and why this VERY DEFINITION SHOULD NOT HAVE APPLIED TO APPLE, by the rules the US Supreme Court established as the very guiding principles of the Rule of Reason that MUST be used to judge these cases against a vertical participant!

The Supreme Court REVERSED an earlier conviction based on exactly such a mistaken application of the law in which a RETAILER was accused of price fixing with several suppliers. They set deliberate and explicit rules, and SPECIFIED THEM AS SUCH, so that a RETAILER could NOT be held as a anti-competitive conspirator by offering the same contracts to suppliers, or if there was a legitimate business advantage to such a plan.

Apple is a RETAILER selling content for the publishers, not a WHOLESALER. It has a legitimate business advantage for Apple for offering what it did to the publishers. It was NOT for the benefit of the publishers but for Apple's benefit. Therefor, Apple must be judged on the Rule of Reason, not the Rule of per se, which is what Judge Côte applied. Apple met every single one of the tests that the US Supreme Court laid out to be held NOT acting illegally. . . yet Judge Côte and the two Appelate Justices ignored the entire set of rules they Court had REQUIRED they must use and went with the set of per se rules used only for those who are in the same TIER of competition. . . The publishers who compete directly against each other. . . and ignored the far more restrictive Rules of Reason.

The Supreme Court stated that, under these rules they established in 2006 defining the entities involved as a defense—in this case only Apple because they were the only ones who had the means to fight—merely had to show that the Pro-competition of any collaboration outweigh any potential anti-competitive effects to pass muster under the antitrust laws. That was a statement IN THE RULES ESTABLISHED BY THE MAJORITY DECISION!

Apple not only met THAT bar, but exceeded it by showing that competition was vastly INCREASED by their entry into the market, and showing that in fact, overall prices had DROPPED, completely invalidating the basic premise of the DOJ's case and their evidence of "price fixing" for the purposes of increasing prices, demonstrating that except for a very small segment of the overall market, the best-seller and A-List segment, which increased prices for a short introductory period, which the plaintiff DOJ had focused all attention on, and Judge Côte complete discounted the expert testimony about, the effect of Apple's entry in the eBook market had the opposite effect of what the government claimed.

The affect of competition on the pricing of Best Selling eBooks August 2012 to April 2014.
Source—DigitalBookWorld.com April 30, 2014

As I said, the only thing Apple, under the LAW, was supposed to have had to show, according to the US Supreme Court, was that the Pro-competition aspects outweighed any potential anti-competitive effects to pass muster under the antitrust laws. They did that in spades! The Supreme Court said that vertical participants had to be judged under the Rule of Reason, not the Rule of per se (Illegal on its face). The Supreme Court's Guideline's were completely ignored because our "Justice System" has been replaced by the rule of men, rather than the rule of law, and if you two bozos can't see that because of your overweening hatred of Apple, you are not true conservatives. Instead, you two apparently approve the replacement of the rule of Law with the rule of Whim, merely because you don't like the defendant. That is sad.

[TexasGator]

“It is not possible. In the market Apple was not even yet a participant, but was going to be, by definition, a RETAILER, a VERTICAL relationship, NOT a HORIZONTAL publisher or wholesaler of eBooks to other retailers. The only way Apple could be in a horizontal conspiracy would be if Apple cooperated with Amazon to fix prices. Apple did NOT at any time approach or discuss pricing with Amazon. “

Uh, Anyone can participate in a horizontal conspiracy. It is all explained in the judgement.

[TexasGator]

Isn’t your graph AFTER they publishers settled the lawsuit?

Let’s see data BEFORE!

[TexasGator]

“Not being an economists, neither of you would understand that consumer advantages are NOT necessarily measure solely by low prices. There are other such consumer advantages such as multiple points of market access, access to multiple authors, quality editing, book selection, all of which were waning under the model that Amazon was pushing because the loss of hardcover sales was making it difficult to pay the authors, impacting the editing process, and even to find and select quality books. “

LOL! ALL the major publishers were supplying Amazon with ALL the books.

[TexasGator]

“Instead, you two apparently approve the replacement of the rule of Law with the rule of Whim, merely because you don’t like the defendant. That is sad. “

If you go back to the WORDS of the law, Apple is guilty, regardless of what you read about ‘interpretations’ of the law ...

[TexasGator]

“Apple not only met THAT bar, but exceeded it by showing that competition was vastly INCREASED by their entry into the market, and showing that in fact, overall prices had DROPPED,”

What about the graph I directed to you that showed that prices JUMPED UP when the conspired deal took place!

[TexasGator]

“The Supreme Court stated that, under these rules they established in 2006 defining the entities involved as a defense—in this case only Apple because they were the only ones who had the means to fight—merely had to show that the Pro-competition of any collaboration outweigh any potential anti-competitive effects to pass muster under the antitrust laws. That was a statement IN THE RULES ESTABLISHED BY THE MAJORITY DECISION! “

Is that in the Sherman Anti-Trust Statutes?

[Swordmaker]

Uh, you are ignoring the graph that showed a jump up in prices IMMEDIATELY upon completion of the conspiracy.

1. Apple engaged in a conspiracy to raise prices and

2. Prices went up drastically, IMMEDIATELY.

What part of a lower price is not necessarily a sign a competitive benefit to consumers do you fail to understand? Evidently all of it.

You also demonstrate that you don't understand CASE LAW at all. Price fixing and PREDATORY PRICING itself was established in the first place by CASE LAW.

[TexasGator]

“What part of a lower price is not necessarily a sign a competitive benefit to consumers do you fail to understand? Evidently all of it. “

Amazon demonstrated that lower prices benefited the consumer and raised revenue for the publishers and authors.

Case Closed.