Apple’s appeal denied: SCOTUS bound?

Apple’s appeal denied: SCOTUS bound?

It says something about the size of your company when you can say that you aren’t really concerned about the nearly half a billion dollar you stand to lose…it’s the principle of the thing. 😉

Quick recap first:

When Apple was going to introduce the iPad, five of the then six biggest USA trade publishers (trade books are the books you would have bought in bookstores…not textbooks and such) switched to the “Agency Model” for e-books. In the Agency Model, the publisher is the official seller of the book (not the retailer, like Amazon or Barnes & Noble)…and the publisher sets the price the customer pays for the book. They offered that as the only arrangement to Amazon, which fought at first, but eventually adopted the model.

The United States Department of Justice went after Apple and the publishers for anti-competitive actions.

The five publishers settled.

Apple took it to court.

Apple lost.

Apple appealed Judge Cote’s decision.

According to this

Yahoo News post by Aaron Pressman

Apple lost this round, in a two-to-one decision.

Macmillan and Simon & Schuster, despite having settled, joined the appeal…essentially arguing that the restrictions placed on Apple also affected them.

I recommend you read the


Here is a key section in a small excerpt:

11 We conclude that the district court’s decision that Apple orchestrated
12  a horizontal conspiracy among the Publisher Defendants to raise ebook prices is
13  amply  supported  and  well‐reasoned,  and  that  the  agreement  unreasonably
14  restrained trade in violation of § 1 of the Sherman Act.  We also conclude that the
15  district  court’s  injunction  is  lawful  and  consistent  with  preventing  future
16  anticompetitive harms.

Continuing, the court is, shall we say, unimpressed with the arguments presented:

17    Significantly,  the  dissent  agrees  that  Apple  intentionally  organized  a
18  conspiracy among the Publisher Defendants to raise ebook prices.  Nonetheless,
1  it  contends that Apple was entitled to do  so because the  conspiracy helped it
2  become an  ebook retailer.   In arriving at this  startling  conclusion — based in
3  large measure on  an  argument that Apple itself did not  assert — the dissent
4  makes two fundamental errors.  The first is to insist that the vertical organizer of
5  a horizontal price‐fixing  conspiracy may  escape  application of the  per se rule.
6  This  conclusion is based on a misreading of Supreme Court precedent, which
7  establishes  precisely  the  opposite.

I have skimmed the entire decision and the dissent, and will probably get through all of it in the next week or so.

The judicial dissent to the decision, to me, doesn’t seem to be defending what Apple did specifically (saying it was a good thing), but arguing that the majority misapplied the law.

Where does it go from here?

Apple could pay about $450 million…consumers would get some money.

Apple could appeal, getting to the Supreme Court…which might, as is argued in the Yahoo piece, decide in Apple’s favor, at least based on the current makeup of the court.

I’m not a legal expert, although I do follow things at the Supreme Court, somewhat. My intuition is that SCOTUS (Supreme Court of the United States) might simply decline to hear the case. I think it depends, to some extent, as to whether the or not the Supreme Court agrees with the dissent in this most recent decision: was the law misapplied.

Otherwise, the bar is pretty high. You appeal a decision asking the higher court to determine if what the lower court did was right…it’s not exactly about your “innocence or guilt”, it’s about the competence of the lower court.

The lower court is, in a way, innocent until proven guilty. When you argue your Supreme Court case, we start with the assumption that the lower court was correct…and the appellants have to  prove it wasn’t.

It’s worth noting that the Agency Model is back. It wasn’t the Agency Model itself (much as I dislike it personally) that was the problem, according to the DOJ: it’s that it was used collectively to control prices.

Why do I dislike the Agency Model?

I’m a former brick-and-mortar bookstore manager, so I freely admit that I could be prejudiced…but I want the retailers to compete on prices. I want Amazon, Kobo, and Barnes & Noble to set their own prices as a way to affect sales…not have the publisher set the same price for all stores. The new version of the Agency Model at Amazon modifies that a bit, allowing Amazon to do some discounting…but, as a customer, I like stores having pricing as a tool.

What do you think? Will Apple appeal? If they do, will they win? How invested are you in getting money from Apple over e-book pricing? Feel free to tell me and my readers what you think by commenting on this post.

Join thousands of readers and try the free ILMK magazine at Flipboard!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) 

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

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