Apple Presses Supreme Court for Appeal Over eBooks Price Fixing

Fortune ^ | JANUARY 21, 2016, 10:05 AM EST | by Jeff John Roberts

[Swordmaker]

Apple argues that the lower courts made a critical mistake in its ruling.

Apple is pulling out all the stops in its bid to overturn a ruling that it fixed ebook prices. In a new filing to the Supreme Court, the company insists the federal government and a lower court made a crucial legal error, and warns the result could be a "long shadow" on the digital economy.

The filing is part of a long-running saga in which the Justice Department says Apple organized a plot by book publishers to fix prices and wrest control of the ebook market away from Amazon. After losing in the lower courts, Apple is slated to pay a $450 million penalty under a settlement with class action lawyers--unless the Supreme Court steps in and reverses the case. Apple initially petitioned the top court in October.

Apple's latest argument, which it put before the Supreme Court on Friday, is pretty technical but it boils down to this: even if Apple did participate in the publishers' conspiracy, the lower court should not have found the company to be automatically liable. The reason is that Apple was not part of a horizontal conspiracy involving competitors, but instead was part of a vertical agreement involving suppliers. (Apple's role was to hatch a deal in which publishers could set their own price in the ebook market and put a stop to Amazon's discounting).

[Swordmaker]

Apple is pressing the U.S. Supreme Court to take the e-Books anti-trust case, claiming that Apple could should not have been treated as a "horizontal competitor" like the publishers because Apple was factually a vertical competitor and could not be automatically assumed to be a conspirator, as the judge ruled, as a matter of law. Therefore, the judge erred in including and convicting Apple, as did the Appelate Court in ignoring the US Supreme Court's very clear directives on such cases. -- PING!

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[Jeff Chandler]

From what I read about this, the ruling goes against precedent.

[Unrepentant VN Vet]

From my worm’s eye view of the various courts/rulings over the past 5-10 years, I’d have to claim that not only is Lady Justice stone blind but shows all the signs of turning into a CrackHo.

If “fairness” is needed, I almost think that I’d pass on USSC and go to a coin toss.

[Swordmaker]

From what I read about this, the ruling goes against precedent.

You are correct. The US Supreme Court had set down explicit guidelines on such anti-trust and competition cases and the Justice Department and Judge Kohl went against every single one of them in bringing Apple into the case and making the decision against Apple. It's why Apple went with a jury less trial, relying on a judge to know the law and the guidelines. She proceeded to ignore them all. . . And announced her verdict BEFORE the trial even started and before she heard any evidence. This is a pattern she has done before, Verdict first, trial afterwards. It was truly Alice Through the Looking Glass land.

Then, Apple got a three judge Appelate panel in which two of the Liberals on the bench used the opportunity to opine on why they disagreed with the Supreme Court's guidelines and ruling with out using any logic or case law, and used OLD cases as precedents that had been already been explicitly thrown out by the US Supreme Court, either by newer case law, or because they were deemed by the court, to be not appropriate to such cases. Say WHAT???

This was res judicata, settled law, not their's to disagree with. The third politely read them the riot act, citing chapter and verse, but he was outvoted. His dissent was a joy to read, filled with logic and beautiful reasoned law, referencing the Supreme Court's guidance in every situation where his colleagues had completely ignored it, and took them to task for doing so.

[Jeff Chandler]

Care to speculate why the judges ruled against Apple?

[Swordmaker]

Some speculate that the Obama administration’s Justice Department started going after Apple when it refused to cooperate with the NSA and PRISM. . . and then Apple also started enabling its customers to encrypt their data so strongly that even Apple could not decipher the data on their devices. That really pissed off the Justice Deprtment and the NSA. Suddenly the government started going after Apple.

It is also interesting that Amazon’s Jeff Bezo’s, one of Obama’s largest donors, is behind the complaint about the anti-trust and Apple price fixing that caused Amazon to go from having 90% of the eBook market, and being able to set predatory prices on eBooks, to only 60% of the eBook market in three years. Amazon was the actual monopolist and price fixer, yet the government went to work to protect the actual monopolist from competition.

[Jeff Chandler]

I do know that a lot of self-published authors despise Amazon. I’ve heard horror stories.

[Swordmaker]

Amazon has been known to "disappear" the buy buttons on books of authors and even entire publishers to put pressure on them to get them to do what they want them to do. The most eggregious of these events was when Amazon disappeared the buy buttons on the eBooks and also the hard copy books of a major publisher to force them to sign a new agreement detrimental to the publisher and advantageous to Amazon. This is a prime example of Monopolistic predatory practices. If your sales are primarily dependent on a single retailer and that retailer turns off your ability to sell your products, you are crippled and can be forced into bankruptcy.

For individual authors, your ability to sell your book can be affected by numerous things under Amazon's control beyond the buy button which is the most drastic punishment they have in their Arsenal. . . And they use them. One of their prime requirements is that you cannot sell your book on any other platform. Monopolistic practice for self-publishers. . . Cutting out your ability to self-market to 45% of the market under threat of being blackballed from the other 55%! Reprehensible.