Apple takes e-book pricing to the Supreme Court

Apple takes e-book pricing to the Supreme Court

“Never give up, never surrender!”
–Commander Peter Quincy Taggart, played by Jason Nesmith, who in turn is played by Tim Allen
Galaxy Quest
screenplay by David Howard, Robert Gordon

The Department of Justice case against five of the biggest USA trade publishers and Apple was settled so long ago (June of 2013) that the settlement-induced injunction against the Agency Model has expired for the publishers (and a modified version is back in effect).

The only party that didn’t settle was Apple.

They are good at fighting in court…and they have enough money to do it for pretty much as long as they want.

Well, until the options run out, anyway.

The Supreme Court is the final option in this case.

In this

Apple document filed with the Supreme Court

Apple requests an extension of a month to file their case to the Supreme Court…they currently have until September 28th of this year, they’d like it to go through October 28th.

Why do they need another thirty days?

They’ve been busy. 🙂

This isn’t the only legal issue in which Apple is involved, and there are only so many world-class, Supreme Court worthy lawyers available to work on them.

Given that they say, “This question is exceedingly important to the United States economy…” it does make one wonder a bit about their priorities. 😉

Apple’s primary argument appears in section 2, which includes

“Before Apple entered the e-books market, Amazon held almost 90% of the market for e-books, which Amazon sold for use on its closed Kindle system.”

Therefore, according to them, they needed to work with the publishers to be able to challenge that market control, which “…suppressed competition and innovation”. Essentially, the assertion goes, Amazon’s low pricing (sometimes charging customers less than what Amazon paid to the publisher) made it unattractive for other people to enter the market (who couldn’t afford to do that), and threatened to result in publishers not making e-book available.

Both of those may be true.

That wouldn’t justify an illegal action, of course…the question here is whether the earlier court decisions (the initial ruling against Apple by Judge Denise Cote and an appeal) against Apple were done on a valid basis.

It’s worth reading their case for the extension.

What does all of this mean for we readers?

Either Apple has September 28th or October 28th to file this request to the Supreme Court…the latter if the Court grants an extension.

My understanding is that if they don’t grant the extension, that might also indicate a rejection of the appeal.

If the appeal doesn’t happen, Apple owes something like half a billion dollars. That’s a lot of money, but they could handle it.

If the appeal was upheld, and the early decisions were overturned (which could take some time)?

It’s a vindication for Apple, and they don’t owe the money…but, and I’m not an expert, I don’t think it results in any particular actions going forward. I don’t think it changes how e-books are priced, for example. It could affect how future negotiations go on other issues.

I’ll keep an eye on it, but honestly, I’ll be happy when there is closure on this. 🙂

For a good analysis, I recommend this

Forbes post by Roger Parloff

What do you think? Will the Supreme Court grant the extension? Will they hear the case? What does it mean if Apple wins…or loses? Do you even care at this point? 🙂 Feel free to tell me and my readers what you think by commenting on this post.

Note: I plan to do another post on the new Amazon hardware in the couple of days, following yesterday’s initial coverage:

Amazon hardware announcements! $50 tablet, 10″ tablet, Fire TV 2

I intend to do something like a buying guide, to give you a sense of why you would pick one over another, why you might or might not want to upgrade, and what other options you might have. 

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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.


4 Responses to “Apple takes e-book pricing to the Supreme Court”

  1. Tom Semple Says:

    At this point, I think only Apple cares about this, since they stand to lose money (which they can well afford to pay). However, I think the merits of their case have been considered several times now and I don’t think it bodes well for success with the SC. I would not even grant the extension. If they were prepared to take this to the Supreme Court, then they have had ample time to prepare for that likely eventuality in advance of the latest ruling. But they’ll probably get one, because they asked for one. Then hopefully SC will refuse to hear it. It seems the legal challenge Apple is making is highly technical and not really something SC should weigh in on.

    • Bufo Calvin Says:

      Thanks for writing, Tom!

      I would think they get the extension (why not? Doesn’t hurt anything much). I would also think the Supremes are most likely to decline to hear.

      If they do hear it, and Apple does win, though, it could have long lasting implications for the future. It would make it much harder for a successful single innovator, since it would make it easier for the status quo entities to apply group pressure against it.

  2. Edward Boyhan Says:

    I think they’ll get the extension, but I’d be surprised if SCOTUS takes the case — it’s just not that critical in the larger scheme of things that SCOTUS handles. We also don’t have conflicting lower court opinions here (the other reason that SCOTUS will take a case)_.

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