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

Good

[Northern Pike]

E-book pricing is a sham.

Re:Good

[afidel]

Yes, yes it is. When it costs more to buy the ebook than it does to buy a 500 page printed document you know something is fundamentally wrong.

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.

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.

Re:Good

[ShanghaiBill]

It doesnt matter what I or the people who supported Singaporean punishment prefer, as long as the 8th stands, its illegal.

The 8th amendment does not ban corporal punishment. It bans "cruel and unusual" punishment. Caning would not be unusual if it was adopted as a standard sentence, and it should not be considered "cruel" if the canee prefers it over incarceration.

You lost any moral high ground at this point.

Since under current law, DEATH is considered an acceptable and non-cruel sentence, I don't think advocating spanking puts me very low on the moral slope.

Re:judge in Apple's pocket?

[gurps_npc]

No. The judge was asked to rule on the strength of a case, given current evidence. He did so.

Such rulings often determine things such as will bail be required, or in corporate cases, whether or not preliminary injunctions are appropriate.

Re:That's what beancounters do in every company

[Black Parrot]

Jon Stewart had a comment along these lines back when the police raided someone's residence over the loose iPhone prototype (or whatever it was):

"What happened? Bill Gates is curing AIDS in Africa, and Steve Jobs is kicking down people's doors in Palo Alto!"

It used to be so simple to keep track of who was the good guys and who was the bad guys...

Re:judge in Apple's pocket?

[DragonWriter]

Can't prejudice such as this get Apple's case thrown out?

Prejudice is opinion formed independently and prior to evidence being presented. This is a comment about how things stand based on the evidence that has been presented, which is not, in any way, shape, or form, prejudice. Its just "judice", which, you know, is what judges do.

Re:Bias

[jsm300]

Yes, that is one of the purposes of a pretrial hearing. The judge has to determine whether or not the case should proceed to a trial or be dismissed. In order for there to be a trial, the Judge has to determine if the party bringing the lawsuit (the federal government in this case) has enough evidence to warrant a trial. The Judge also has to make a preliminary judgement about how likely the party bringing the lawsuit will win. This is needed in order to determine whether any preliminary injunctions should be issued prior to the trial (i.e. an injunction that takes place and stays in force until the trial is completed or another hearing reverses the injunction).

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:Apple is Evil

[0123456]

Publishers are the ones tying books to devices, with DRM. No-one is forced to put DRM on their Kindle books, it's a publisher's option.

Then, after those publishers have tied readers to their Kindle by putting DRM on their books, they complain that other stores can't compete with Amazon because all the readers have Kindles.

Straw man

[ZombieBraintrust]

Capitalism is about profit. Specifically, maximizing it.

That is a nice Straw man you got there. Setting your prices as high as possible is not the same as setting your prices to maximize profit. Lowering prices can lead to more sales resulting in more profit. Free Market Capitalism is about letting supply and demand dictate where the price will be. Apple has attempted to abuse contract law to have the government enforce a price control. Anti Trust laws are about enforcing Free Market Capitalism. They are there prevent control of supply and to prevent price manipulation. What Apple is pushing is Crony Capitalism.