Friday, August 17, 2012
An Overview of Wednesday's eBook Filings: Will Judge Cote Care?
Wednesday afternoon brought the expected additional filings with the court regarding the ebook pricing settlement. Two of the litigating defendants, Apple and Penguin, already had the right to be heard in 5 pages or fewer. The Authors Guild, like attorney Bob Kohn, have asked for permission to file additional remarks as a friend of the court and provided their brief on a conditional basis, subject to Judge Denise Cote's ruling.
Apple's argument is the boldest--that they are being denied due process of law and penalized by having their ebook contracts with the settling publishers (the Settlers) voided and their MFNs with those publishers barred in advance of any trial or finding of guilt.
Penguin's comments are more philosophical than legal, in advance of their own forthcoming trial. They argue that government has not shown any evidence to back their claims that ebook prices went up after agency was introduced, and there is no economic analysis to back either the government's conclusion or their remedy. Mostly it is a chance to pre-argue part of the case they will make at trial, and they present some of their own analysis of Penguin prices at Amazon prior to the agency that we detail in the story below.
Macmillan agrees with Penguin on the lack of government analysis, saying "the size of Amazon's market share is at the center of this proceeding regardless of whose narrative the Court accepts."
The Authors Guild joins Bob Kohn in asking permission to file a second brief. Like a portion of Kohn's argument (though not his primary one), they say that the DOJ defined the "relevant markets" far too narrowly, and remind the court they are not acting only to protect authors' income, since the agency model pays lower royalties (on hardcovers, at least).
The extent to which Judge Cote will entertain any of these arguments at this stage of the proceedings is unclear. In her August 7 ruling limiting Apple to five pages, she underscored that she had "emphasized" to the defendants in an April conference "that the principal response by any party to the settlement itself should be made during the public comment period." And she reminded Apple in particular that they it "was required to set forth its analysis of any 'substantive deficiencies in the proposed settlement' in its submission during the public Comment period." So why are they arguing something so fundamental now? Justice will certainly ask that when they respond, and Judge Cote may, too. (NB, other parties have until midnight tonight to file with the court. Macmillan is the only other party entitled to file five pages; anyone else must seek permission to serve as as a friend of the court. The government now has until August 22 "to file any reply.")