Apple Files Formal Complaint Over Monitor Fees in E-Book Antitrust Case

[thekev]

I think Amazon is desperate. It used the advantage of tax free to hurt many retailers. Because of this many retailers like CompUSA and Circuit City were forced to close. Amazon was not sued by the courts.

Amazon's "tax-free" advantage is drying up. It wasn't precisely that, and it didn't start with internet sales. I can't remember the name, but there was a specific case with mail order catalog companies involving the ability of a state to mandate sales tax collection across state lines. The states responded by placing a "use tax" in lieu of sales tax on items that were either purchased from an out of state vendor or shipped out of state to an alternate address to avoid sales tax. Typically if you order from out of state or purchase something above a certain amount to be brought back to your home state within whatever state set number of days, you owe use tax through a filing with whatever agency deals with that in your state. States don't have the resources to pursue everyone who doesn't pay, and this has become more prevalent in the internet age, so they start to bicker with retailers instead. Amazon doesn't seem to be totally against sales tax across state lines, as long as others are also held to that. I would still order things off Amazon for the convenience factor. Right now consumers often treat it as a price advantage, and it does hurt brick and mortar businesses to a degree.

I'll add that the sales tax issue wasn't the only reason those stores experienced difficulties.

 

[tmarks11]

"What's the feeling of the community, do people think Apple really did try to hike prices unfairly?

yes, no question about it.

No surprise about the outcome, it seemed a very cut and dried case. Obviously most of the publisher's had smart lawyers, because 3 of the 5 publishers immediately acknowledged that they had erred and settled with DOJ.

 

[Hitch08]

The reason why these shakedowns by regulators always work despite scant evidence or law is because they have UNILATERAL authority. Any attempt to sue for redress requires you first prove they are arbitrary and capricious. Short of accomplishing that IN ADVANCE the standard of justice in court is "PRESUMPTION OF CORRECTNESS BY THE REGULATOR." Very difficult to overcome.

I saw it happen once, but the regulator had to do a bunch of stupid stuff, strong-arm the judge, and outright lie, to hand it to us. That judge got tired of the BS so transferred to the FISA court where there is even less adversarial permission by the harmed.

This administration believes in tax, spend, borrow, fine, mandate, monologue. Big upgrade from the last guy!

Read Greenspan's new book. The government set-up the big recession through mortgage regulations, then fined banks for offering the loans they were mandated to. Same sucker-punch here.

When can we sue for redress against the government and have the fines and treble damages transferred to our accounts, the citizens. With "financial repression" (long term zero rates, harming savers) firmly in place to offset the fiscal extremes on the part of the Senate and President (tax and spend and borrow), it will be a long time until employment and growth rebounds. The Fed sure isn't going to change until the FEDGOV has something approaching a balanced budget. You know pretty much ANY budget in 5 years!

FEDGOV does something similar everywhere a regulator has authority, because it can.

Rocketman

cite:

http://www.c-spanvideo.org/program/316106-1

Start at 31:00

That's a rather impressive effort to derail this thread.

 

[giantfan1224]

yes, no question about it.

No surprise about the outcome, it seemed a very cut and dried case. Obviously most of the publisher's had smart lawyers, because 3 of the 5 publishers immediately acknowledged that they had erred and settled with DOJ.

So everyone who settles is guilty? Or admits guilt? Hardly. Many don't have the resources to fight and decide it will be cheaper to settle. It's the sad state of affairs of our Judicial System.

 

[samcraig]

I'd file an anti-trust suit against this guy - it's a monopoly when Apple is forced to use this guy rather than choose their own!

No, it's more like hiring an auditor.

Instead, we have a case which resembles police demanding bribes. The police should be paid with tax money. If Apple is to be fiscally punished, the fines should be collected by the court, not by the officer.

It's nothing like how you describe. And Apple shouldn't get to pick their auditor unless it's from list that is provided to them. They should definitely not be in charge of finding their OWN auditor.

Based on the fact that it's a 5 person team, ~1K an hour seems reasonable. I admit I'm not an expert.

Further - it's entirely possible there's no one that can do what he does AND also what the other lawyer (team) he's working with do to what needs to be done. I'm not sure anyone here is really qualified to determine that.

 

[GadgetDon]

Further - it's entirely possible there's no one that can do what he does AND also what the other lawyer (team) he's working with do to what needs to be done. I'm not sure anyone here is really qualified to determine that.

Except his job is to ensure that the behavior that Apple engaged in that was brought into question in the trial (and may or may not be upheld to be criminal in the appeals - but even if Apple wins and is found to not have violated the law, they'll still have had to pay this yahoo's exhorbitant fees) is, is Apple negotiating with multiple content providers using a combination of MFN and Agency Model to force the agency model and same pricing on other digital stores.

Given that Apple is undercut by Amazon's music and video stores, this clearly is not happening (there is no MFN going on - and indeed when the music publishers were not happy with Apple's power in the digital music market and conspired with Amazon to allow it to suddenly sell all the same music but at a lower cost and without the DRM forced on Apple, Apple didn't go crying to the DoJ). The App stores, different prices between App Store and Google Play Store. So no, the same behavior is not going on there. So the only "monitoring" necessary is, "are you opening a new digital content store and in current negotiations". The thing is, there isn't another big digital content market out there. Books, Music, Video, and Apps are pretty much it. So what are they running up those fees on, unless they're on a witchhunt looking through anything Apple does from the inside hoping to find some illegality somewhere, as opposed to the specific behavior described in the trial and in the verdict.

And again, the request to interview Jony Ive shows just how afield they are. Ive works on the design of things. The physical shape and feel, how buttons interact, and now in software the layouts, the colors, etc. What possible bearing does anything he is involved in have to do with negotiating with content publishers?

 

[Renzatic]

Can any one enlighten me why this PRICE FIXING is a CRIME? I remember about ten years ago Bestbuy tried to sell iMacs with a discount of $100. Jobs was not happy and terminated Bestbuy. It took several years before Bestbuy is allowed to sell Apple products.

That's not price fixing in a monopolistic sense. Apple makes iMacs, which is obviously a singular product. They have the right to determine the price retailers sell their products at, and retailers have the right to choose not to carry it if they don't agree to the terms.

Now if Apple were one of 5 companies producing iMacs, and these competing entities decided to form an iMac cartel in order to control prices of their product across the entire market, that would be an entirely different story...

There are exceptions, of course, but generally competing entities have to compete with each other. In the ebook situation, the publishers were working together to control prices of their products across the board in order to benefit a smaller company at the expense of a larger one, and potentially raise profits for everyone involved. They were trading a solid monopsony for an equally harmful virtual monopoly of a single product. Instead of one big buyer, you had multiple sellers working as a collective whole.

...and that's why price fixing in this instance is illegal.

 

[KítscheñÇinqµe]

Apple is not selling 500,000 iPhone 5s' per day because it's overcharging. In capitalism, it has to do with supply and demand. No one is forcing all those people to pay Apple's price like Apple is being forced by the judicial system to pay.

Irrelevant (or inaccurate) regarding the misleading term "force". Capitalism is a system enforced by government
https://en.wikipedia.org/wiki/Capitalism

 

[JAT]

Amazon's "tax-free" advantage is drying up. It wasn't precisely that, and it didn't start with internet sales. I can't remember the name, but there was a specific case with mail order catalog companies involving the ability of a state to mandate sales tax collection across state lines. The states responded by placing a "use tax" in lieu of sales tax on items that were either purchased from an out of state vendor or shipped out of state to an alternate address to avoid sales tax. Typically if you order from out of state or purchase something above a certain amount to be brought back to your home state within whatever state set number of days, you owe use tax through a filing with whatever agency deals with that in your state. States don't have the resources to pursue everyone who doesn't pay, and this has become more prevalent in the internet age, so they start to bicker with retailers instead. Amazon doesn't seem to be totally against sales tax across state lines, as long as others are also held to that. I would still order things off Amazon for the convenience factor. Right now consumers often treat it as a price advantage, and it does hurt brick and mortar businesses to a degree.

I'll add that the sales tax issue wasn't the only reason those stores experienced difficulties.

To add:
A lot of it was the assumed burden of working out the tax and submitting it. Without a presence in the state, companies didn't have personnel to do this, and the states couldn't force them to hire people. (think about a mom&pop shop that decides to do some mail order, can they hire an accountant for each of 50 states?)

In 2013, life is different. Computers handle this for retailers in nanoseconds. Many states are working on a way to collect tax from every retailer regardless of location of retailer and consumer. http://www.streamlinedsalestax.org/ I see this happening in the next couple years.

 

[clibinarius]

So everyone who settles is guilty? Or admits guilt? Hardly. Many don't have the resources to fight and decide it will be cheaper to settle. It's the sad state of affairs of our Judicial System.

Most settlement agreements contain a clause that no side admits guilt and has entered into an agreement simply to save money and be happy with each other...

 

[mccldwll]

yes, no question about it.

No surprise about the outcome, it seemed a very cut and dried case. Obviously most of the publisher's had smart lawyers, because 3 of the 5 publishers immediately acknowledged that they had erred and settled with DOJ.

Not really, except in Cote's mind. Look at her background. If you have a hammer, everything looks like a nail. I don't believe this will end well for her.

http://tech.fortune.cnn.com/2013/08/14/apple-ebook-judge-cote-2/

 

[BaldiMac]

Apple got off way easy. Apple should have been hit up with a huge punitive fine, big enough that it would make then think twice of ever doing it again. Maybe a few Billion. But instead they get a bill for $135,000. That amount is so small that it is below a round-off error on an Apple finaltial report.

Apple's liability for damages has yet to be determined.

This price fixing thing iwas not a civil law suit it was a CRIMINAL conviction. They were convicted of in effect stealing millions of dollars from consumers by forming an illegal criminal conspiracy. Maybe you don't like the law but Apple broke it.

Nope. The DOJ brought a civil suit against Apple. They were found liable.

 

[dermeister]

Reminds me of the scene in Atlas Shrugged where the government monitor is sent to Rearden Metal to supervise.

Looks like Apple is gradually folding on every front - Greenpeace, anti-trust, taxes, charity...