Judge Thinks Apple Will Lose E-Book Price-Fixing Case

Nerval's Lobster writes "Apple could face a difficult time winning its court case against the U.S. Department of Justice over e-book pricing, according to the federal judge overseeing the trial. 'I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books,' U.S. District Judge Denise Cote said during a May 23 pretrial hearing, according to Reuters, 'and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that.' Apple's legal counsel is a bit perturbed over her comments. 'We strongly disagree with the court's preliminary statements about the case today,' Apple lawyer Orin Snyder wrote in a statement also reprinted by Reuters. The Justice Department has asserted that Apple, along with those publishers, conspired to raise retail e-book prices in tandem 'and eliminate price competition, substantially increasing prices paid by consumers.' Apple battles Amazon in the e-book space, with the latter company achieving great success over the past few years by driving down the price of e-books and Kindle e-readers; while Apple co-founder insisted in emails to News Corp executive James Murdoch (son of Rupert Murdoch), that Amazon's pricing was ultimately unsustainable, the online retailer shows no signs of flagging with regard to its publishing-industry clout."

Comments

Re:Good

[rahvin112]

Why do you think every publisher ran for the exits and settled with the Feds? This is a slam dunk case, they have the emails, the meeting notes, they know exactly what happened and it was industry collusion and price fixing under the federal laws. Apple was stupid or arrogant to take this to court. I personally hope the government takes them for several billion. I personally probably paid more than $100 extra because of this price fixing and I've wanted this prosecution from the day the price fixing was publicized.

As you said, you know the market is broken when the digital price is higher than the same thing printed on dead tree shipped to your door. I personally believe there should be people in jail for what happened here. This illegal price fixing cost the public Billions.

Re:Good

[ShanghaiBill]

I personally believe there should be people in jail for what happened here.

I disagree. Jail is expensive and wasteful. It should not be used as a default punishment for non-violent crimes. People should only be incarcerated if they are a physical danger to other people. America already imprisons far more of its population than any other country. We should learn from the rest of the world. Singapore is a good example. If Tim Cook received ten lashes on the bare buttocks with an alcohol soaked raton rod, that would be more than sufficient deterrent, and would be far more cost effective for the taxpayers.

Priced way too high, considering tax effects

[coats]

"Dearer than paperbacks" means they are priced far too high. With a paperback I can donate it to charity when I finish. Valuing it at used-book prices, I still get a 60% tax writeoff. Given a marginal tax rate of 50%, the book then costs me a net 70% of its face value.

I can't donate e-books, so for me to break even the price needs to be no more than 70% of the paperback face value.

Re:Good

[icebike]

Probably because from Apple's perspective, all Apple did was let the publishers set their own book prices. That's basically what this case is about.

No, continue your reading and research. This is FAR from all the case is about. Apple entered into a collusion with the publishers (who have all ran for the exits) to fix the price of e-books across the entire industry, and to trash the first sale doctrine in the process by forcing every reseller to be the Agent of the publisher.

There is no way this could have been accomplished previously. Apple did this to raise margins because they wanted and demanded 30% on everything sold thru the iTunes store, but there was not 30% to be had with Amazon working on much slimmer margins. The only way this could be pulled off was for all publishers to simultaneously force all resellers to Agency terms. That required one big (new) reseller with nothing to lose, to agree to it, so that the publishers could preserve the e-book market, and force the smaller resellers to toe the line.

And while we like to blame Cook, it was really Jobs who formed this conspiracy.

But the way this lawsuit works the last to agree holds the largest bag. And Apple was too proud to admit its part in this collusion, and as a result they are going to pay up big. Very Big.