Saturday, June 22, 2013

The Finale: Does Judge Cote's Belief the Publishers Are Guilty Exonerate or Implicate Apple?


The DOJ's ebook price fixing trial against Apple came to an end Thursday with closing arguments from both sides. Apple lead lawyer Orin Snyder began his summation in the clearest possible terms: "Apple did not conspire to fix prices with any publisher. Let me repeat that. Apple did not conspire with a single publisher to fix prices in the eBook industry." Rather, Snyder said near the end of his presentation, "Apple's entry simply crystallized market forces and structural changes that were well underway before Apple met with a single publisher." He argued, "We know of no other case where a defendant has come to this court with as much evidence of its legitimate independent business purposes….  We have a massive amount of evidence that Apple acted, with the agency agreements, MFNs, and price caps, not to remake an industry but for its own legitimate and lawful business reasons to open a competitive bookstore."

Needless to say, lead DOJ attorney Mark Ryan said it was equally clear that Apple is guilty: "We think the evidence clearly establishes that Apple organized, directed, and oversaw the implementation of a conspiracy aimed to raise eBook prices to U.S. consumers and to prevent low-priced retail eBook competition from Amazon and as part of that conspiracy was successful in moving – in harnessing the coordinated power of the publishers to force Amazon on to an agency model."
Ryan suggested “ the United States has carried its burden just if we focus on Apple's own words.” He paraphrased Eddy Cue as admitting:

"1.  I know they wanted to raise prices.  So, clearly, that's the case. All the evidence establishes that.
"2.  I gave them the ability to do it.
"3.  I provided them the reassurances that they needed so that they would not fear retaliation from Amazon. And those reassurances, of course, were that the publishers would move together to raise prices and to limit competition from Amazon.


"We submit that that alone is enough to meet the burden of showing an unlawful agreement in violation of Section 1."

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