Fine. Your LIBERAL ass can believe what you want. But for the first time in history, people and companies can do several things that are literally completely LEGAL and find themselves being hauled into court because the government declares ex post facto that the sum of those COMPLETELY LEGAL things is somehow ILLEGAL! That is novel and illogical.
Not one single thing Apple did was against the law. Not one thing. How is any business in the future to know that some standard business practice going to be later deemed to be a violation of the law by some prosecutor and LIBERAL judges ignoring plainly stated legal rules?
From the Dissent by Dennis Jacobs, 2nd Court of Appeals:
"The new distribution model was implemented by several terms in Apple’s contracts with publishers: agency pricing, tiered price caps, and a most-favored- nation clause. It is conceded (by Judge Denise Cote) that none of those terms is, standing alone, illegal.. . .
The district court committed three decisive errors:
- The district court ruled (and the majority affirms) that a vertical enabler of a horizontal price-fixing conspiracy is in per se violation of the antitrust laws. However, the Supreme Court teaches that a vertical agreement designed to facilitate a horizontal cartel “would need to be held unlawful under the rule of reason.” Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 893 (2007) (emphasis added). (POINT I)
- The district court’s alternative ruling under the rule of reason was pre- determined by its (erroneous) per se ruling. Thus the district court assessed impacts on competition without recognizing that Apple’s role as a vertical player differentiated it from the publishers. The court should instead have considered Apple as a competitor on the distinct horizontal plane of retailers, where Apple competed with Amazon (and smaller players such as Barnes & Noble). (POINT II)
- Apple’s conduct, assessed under the rule of reason on the horizontal plane of retail competition, was unambiguously and overwhelmingly pro-competitive. Apple was a major potential competitor in a market dominated by a 90 percent monopoly, and was justifiably unwilling to enter a market on terms that would assure a loss on sales or exact a toll on its reputation. In that connection, the district court erroneously deemed the monopolist’s $9.99 price as categorically good for competition because it was lower than cost, and because e-book prices rose after the monopoly was broken. (POINT III)
A further and pervasive error (by the district court and by my colleagues on this appeal) is the implicit assumption that competition should be genteel, lawyer- designed, and fair under sporting rules, and that antitrust law is offended by gloves-off competition. . . .
The district court’s principal legal error, from which other errors flow, is its conclusion that Apple violated § 1 under the per se rule. Having found that the publishers’ coordinated strategy was a horizontal price-fixing conspiracy, and that Apple had facilitated that conspiracy in its vertical relationship with the publishers, see Apple I, 952 F. Supp. 2d at 691, the district court drew the legal conclusion that these facts established a per se violation of the Sherman Act by Apple. This appeal turns on whether purely vertical participation in and facilitation of a horizontal price-fixing conspiracy gives rise to per se liability.
Section 1 of the Sherman Act “outlaw[s] only unreasonable restraints”; so a court weighing an alleged violation “presumptively applies rule of reason analysis, under which antitrust plaintiffs must demonstrate that a particular contract or combination is in fact unreasonable and anticompetitive before it will be found unlawful.” Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006) (quoting State Oil Co. v. Khan, 522 U.S. 3, 10 (1997)). The exception, liability per se, is reserved for those categories of behavior so definitively and universally anti-competitive that a court’s consideration of market forces and reasonableness would be pointless. Id. Traditionally, restraints that are unlawful take the form of horizontal agreements “raising, depressing, fixing, pegging, or stabilizing the price of a commodity.” United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223 (1940).
Among modern cases, the per se rule takes aim exclusively at horizontal agreements, because “competition among the manufacturers of the same [product] . . . is the primary concern of antitrust law.” Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 52 n.19 (1977). Accordingly, the trend of antitrust law has been a steady constriction of the per se rule in the context of vertical relationships.
There are many problems with this case.
As Jacobs says later in his discussion:
Collusion among competitors does not describe Apple’s conduct or account for its motive. Apple’s conduct had no element of collusion with a horizontal rival. Its own rival in competition was (and presumably is) Amazon; and that competition takes place on a horizontal plane distinct from the plane of the horizontal conspiracy among the publishers. All Apple’s energy—all it did that has been condemned in this case—was directed to weakening its competitive rival, and pushing it aside to make room for Apple’s entry. On the only horizontal plane that matters to Apple’s e-book business, Apple was in competition and never in collusion. So it does not do to deem Apple’s conduct anti-competitive just because the publishers’ horizontal conspiracy was found to be illegal per se.“[V]ertical agreements are a customary and even indispensable part of the market system” and so do not represent the same presumptive threat to competition. 11 Areeda & Hovenkamp, supra, ¶ 1902d, at 240. Even a vertical agreement designed to decrease competition among competitors does not pose the threat to market competition that is posed by a horizontal agreement, for two reasons: (1) market forces (such as countervailing measures by competitors) are categorically more effective in countering anti-competitive vertical agreements, and (2) vertical agreements are so fundamental to the operation of the market that uncertainty about the legality of vertical arrangements would impose vast costs on markets. Id. at 240-41. Such market realities are driving the evolution of antitrust law, which has “rejected the approach of reliance on rules governing horizontal restraints when defining rules applicable to vertical ones.” Leegin, 551 U.S. at 888.
The present case illustrates why per se treatment is not given to vertical agreements that facilitate horizontal conspiracies. Assuming (as is uncontested on appeal) that the publishers violated § 1 per se through their coordination, Apple’s promotion of that horizontal conspiracy was limited to vertical dealings.
The per se rule is inapplicable here for another independent reason: The per se rule does not apply to arrangements with which the courts are not already well-experienced. Leegin, 551 U.S. at 887. As the government conceded at oral argument, no court has previously considered a restraint of this kind. Several features make it sui generis: (a) a vertical relationship (b) facilitating a horizontal conspiracy (c) to overcome barriers to entry in a market dominated by a single firm (d) in an industry created by an emergent technology.
As Justice Jacobs points out in his dissenting argument, Judge Cote forged NEW UNIQUE LAW (sui generis) here without any justification, going into legal terra incognita without a guide, compass, or, being who she is, a legal dolt, any idea of what she was doing . . . and it therefore requires very close scrutiny. He skewers his Colleagues on the Appellate bench for backing the idiotic usages of Law the idiot trial judge uses, and, politely, reams them a new ass.
Had the District Trial Court properly applied the Rule of REASON, Justice Jacobs argues from the RULES,
"Under the rule of reason, the initial burden rests with the plaintiffs “to demonstrate the defendants’ challenged behavior had an actual adverse effect on competition as a whole in the relevant market.” Geneva Pharms. Tech. Corp. v. Barr Labs. Inc., 386 F.3d 485, 506-07 (2d Cir. 2004) (internal quotation marks omitted).
In other words, Gator, for the government to get a conviction it would have been required to PROVE that competition had been HARMED by Apple's entry into the eBook market!
That would have been an impossibility. . . given that Apple had garnered 30% of the eBook market. . . and Amazon, the monopolist who had been protecting itself FROM competition by predatory pricing, had dropped from 90% market share to 60% market share and the over all market had grown by over 200%! In addition, prices were dropping in the best seller and A-list categories due to competition. Competition had definitely NOT been harmed by Apple's actions. He politely points out that the two Justices have created a CONFLICT with the 3rd District. . . which followed the US Supreme Court's rules. This case literally was CRYING OUT for the Supreme Court to Reverse. Why it did not had to be solely because Scalia, the author of the rules is now dead. . . and the Liberal know nothing Whim Justices are running wild.