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Old Aug 9, 2013, 11:07 AM   #1
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DOJ Says Publishers Are Again Colluding in Objecting to Proposed Apple Penalty in E-Book Case




With Apple and the U.S. Department of Justice headed back to court today for a hearing on the government's proposed penalties for Apple, GigaOM highlights several developments in the case. Of particular interest is a letter from DOJ attorney Lawrence Buterman arguing that an objection to the proposed penalties by the publishers that were part of the case is direct evidence of why the penalties are needed to protect consumers.
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"A necessary component of this Court's decision finding Apple liable for horizontal price-fixing is that the publishers themselves were engaged in a horizontal price-fixing conspiracy...[There] is reason to believe the Publisher Defendants may be positioning themselves to pick things back up where they left off as soon as their two-year clocks run. Indeed, the very fact that the Publisher Defendants have banded together once again, this time to jointly oppose two provisions in the Proposed Final Judgment that they believe could result in lower ebook prices for consumers, only highlights why it is necessary to ensure that Apple (and hopefully other retailers) can discount ebooks and compete on retail price for as long as possible."
Apple has called the proposed penalties, which would force the company to allow competitors to bring back direct links to their e-book stores in their App Store apps and nullify existing "agency model" contracts with publishers, "draconian" and "punitive". Apple could also end up being liable for as much as $500 million in damages.

At today's hearing, Apple will also argue for a stay on further court proceedings until its appeal can be heard, proposing that a jury trial be held in October 2014. The DOJ is arguing against a stay and suggesting that an appeal trial should be held beginning in April 2014.

Update: Associated Press reports that Judge Denise Cote has denied Apple's request for a stay of the case pending appeal.
Quote:
A judge on Friday refused a request by Apple to temporarily suspend her ruling that it violated antitrust laws by conspiring with publishers to raise electronic book prices in 2010.

Judge Denise Cote, ruling from the bench in Manhattan federal court, declined to withdraw the effect of last month's ruling while Cupertino, Calif.-based Apple Inc. appeals.

The maker of iPods, iPads and iPhones continues to fight what it calls "false accusations."
Article Link: DOJ Says Publishers Are Again Colluding in Objecting to Proposed Apple Penalty in E-Book Case
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Old Aug 9, 2013, 11:13 AM   #2
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So the publishers collude, with or without Apple and yet Apple is the one who has to be punished. What a joke.
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Old Aug 9, 2013, 11:14 AM   #3
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Ugh, what a mess. On one hand, Apple and the publishers did collude to bring up prices, which is bad for consumers. On the other, Amazon's loss leader strategy with ebooks would practically create a monopoly, which is bad for consumers and the publishers. Now that this thing could be pushed all the way to 2014 is even more aggravating.

Regardless, the DoJ has no right telling Apple what they should do with their App Store.
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Old Aug 9, 2013, 11:19 AM   #4
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Wow, the DOJ is looking more and more pathetic.

I'm glad that the DOJ is showing its true colors in this new accusation: paranoid and incompetent.
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Old Aug 9, 2013, 11:20 AM   #5
Banyan Bruce
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Rough Justice

This all seems a bit like using a very large hammer to crack a walnut to me.
You're damned with the publishers and without them. Frankly, I'd just like to see the publishers swing and let Amazon jerk the leash.

DOJ are playing very hardball, although this seems to be the American way these days. It's not a subtle, clever, clear or elegant punishment, just harsh.
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Old Aug 9, 2013, 11:27 AM   #6
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lol, If this was all a story in a book people would say it was too far-fetched.
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Old Aug 9, 2013, 11:28 AM   #7
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50% of the members here at MacRumors are colluding AGAINST Apple, saying bad stuff against Apple.

50% of the members here at MacRumors are colluding FOR Apple, saying nice things about Apple.

DOJ! DOJ!
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Old Aug 9, 2013, 11:29 AM   #8
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The DOJ is having a temper tantrum. This is what judges are for, if they have any authority remaining whatsoever. The constitution and judiciary is supposed to protect us against an overzealous government. This government is clearly overzealous.
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Old Aug 9, 2013, 11:31 AM   #9
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Don't you just LOVE the progressive perversion of the commerce clause being used as a tool to tell business what they can and cannot do?

You make it impossible for a corporation to conduct business in the United States and then bitch and moan when they offshore jobs and keep profits overseas.

Why would a corporation reward a population and the government it elects when that population/government does everything within its legal (and made up) power to prevent that corporation from doing business?

Fight the good fight Apple. Keep that ~$100 billion overseas and invest in companies in other countries!!!
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Old Aug 9, 2013, 11:33 AM   #10
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And still nobody cares about what the Authors and Mom and Pop Bookstores think.....At this rate they'll be no more books sold at all. What a mess...
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Old Aug 9, 2013, 11:37 AM   #11
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Quote:
Originally Posted by SJism23 View Post
Ugh, what a mess. On one hand, Apple and the publishers did collude to bring up prices, which is bad for consumers. On the other, Amazon's loss leader strategy with ebooks would practically create a monopoly, which is bad for consumers and the publishers. Now that this thing could be pushed all the way to 2014 is even more aggravating.

Regardless, the DoJ has no right telling Apple what they should do with their App Store.
I would have to say you are wrong on both counts of it being bad. If Amazon is willing to buy an ebook for $10 and sell it for $7, then that is great for the consumers because they get it for cheaper and great for the publisher because they arent getting a cut in pay like the 30% cut from Apple. I agree that it could be viewed as a monopoly if no one ever bought ebooks from B&N or Apple though.
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Old Aug 9, 2013, 11:37 AM   #12
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October 2014? Yeah, right.
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Old Aug 9, 2013, 11:38 AM   #13
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"Banded together"? Banded together?! Really?!
So any time more than one entity shares an opinion it's a conspiracy?

Good lord.
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Old Aug 9, 2013, 11:40 AM   #14
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Is there a process for throwing out the DOJ immediately other than having a revolution? IE, some kind of special election the states can demand or something?
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Old Aug 9, 2013, 11:45 AM   #15
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Originally Posted by joshuarayer View Post
I agree that it could be viewed as a monopoly if no one ever bought ebooks from B&N or Apple though.
Yeah, it could be "viewed" like that. Imagine if Carlos Slim Helu, with his $73,000,000,000 fortune decided to pay publishers whatever they wanted for e-books and sell them to us for a nickel. What does he care? His billion-dollar businesses cover the loss a billion times over and he still goes to bed filthy rich. Plus no one buys e-books from anyone else. And while they're shopping for e-books, maybe they'll buy an America Movil phone card.

Now you understand the Amazon e-book model. And the DOJ has a problem with ... wait for it ... Apple.
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Old Aug 9, 2013, 11:45 AM   #16
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How about DOJ investigate
- Amazon's predatory monopoly
- high health care price in the US
- Google / Samsung using SEPs as weapons
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Old Aug 9, 2013, 11:48 AM   #17
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Quote:
Originally Posted by ValSalva View Post
So the publishers collude, with or without Apple and yet Apple is the one who has to be punished. What a joke.
The publishers didn't fight the case and have already paid the damages awarded against them. Only Apple chose to fight the case.
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Old Aug 9, 2013, 11:51 AM   #18
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Originally Posted by ArtOfWarfare View Post
Is there a process for throwing out the DOJ immediately other than having a revolution? IE, some kind of special election the states can demand or something?

The head of the DOJ is the Attorney General. In this case, it's Obama's BFF pal Eric Holder. The office is appointed by the President. It is not an elected position, hence you cannot vote him out of office.

Highly unlikely that POTUS will throw out one of his own close pals from office.
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Old Aug 9, 2013, 11:52 AM   #19
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Originally Posted by OllyW View Post
The publishers didn't fight the case and have already paid the damages awarded against them. Only Apple chose to fight the case.
So the publishers have nothing to lose now, as evidenced by the DOJ statement. What a mess for Apple.

This has been a rough week. First Firefox 23 stops supporting the <blink> tag and now this!
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Old Aug 9, 2013, 11:53 AM   #20
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Couldn't the publishers just independently (key word) decide not to allow Amazon to sell their books if they're so unhappy with Amazon selling their books at a loss?

I'm thinking that's what led MacMillian to remove their books a few years ago.

http://www.nytimes.com/2010/01/30/te...azon.html?_r=0
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Old Aug 9, 2013, 11:56 AM   #21
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Originally Posted by ValSalva View Post
So the publishers collude, with or without Apple and yet Apple is the one who has to be punished. What a joke.
The publishers have all already pleaded guilty and agreed to pay fines. Apple was the only one who refused to settle and take it to court.
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Old Aug 9, 2013, 11:56 AM   #22
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I am guessing this attorney was not on the team that negotiated with the publishers to finalize their settlements. He probably should have talked to his colleagues that did finalize those settlements before proposing something that would violate them. You can only overreach so far before you get slapped down.
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Old Aug 9, 2013, 11:57 AM   #23
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Originally Posted by joshuarayer View Post
I would have to say you are wrong on both counts of it being bad. If Amazon is willing to buy an ebook for $10 and sell it for $7, then that is great for the consumers because they get it for cheaper and great for the publisher because they arent getting a cut in pay like the 30% cut from Apple. I agree that it could be viewed as a monopoly if no one ever bought ebooks from B&N or Apple though.
I thought that was called "dumping" and is illegal. It's only used as a means to crush competition by making it impossible for any other business to compete, while Amazon can afford to take the loss for a while until the other guys go out of business.
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Old Aug 9, 2013, 11:58 AM   #24
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Quote:
Originally Posted by joshuarayer View Post
I would have to say you are wrong on both counts of it being bad. If Amazon is willing to buy an ebook for $10 and sell it for $7, then that is great for the consumers because they get it for cheaper and great for the publisher because they arent getting a cut in pay like the 30% cut from Apple. I agree that it could be viewed as a monopoly if no one ever bought ebooks from B&N or Apple though.
If price is the only factor, then selling at a loss undercuts sellers that require a profit to operate, i.e., most anybody in business.

Amazon sells best sellers at a loss and makes it up on sales of unrelated products. To me, that is predatory pricing.
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Old Aug 9, 2013, 11:59 AM   #25
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Apple should just move their HQ to another country like Canada.
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