Apple's Bid to Disqualify Antitrust Compliance Monitor Rejected

[bsolar]

Your begging the question here. Of course unlawful anti-competitive practices are unlawful and anti-competitive.

Begging the question means assuming the conclusion. In this case the assumption of unlawful practices is the premise, not the conclusion: my conclusion is not that the practices were anti-competitive but that given an anti-competitive practice, even applied against a monopoly, it's still unlawful.

However, some practices are legal in response unlawful monopolistic practices but not legal for a monopolist. In this case, should it even be illegal to raise prices from the below marginal pricing of a monopolist?

As far as I understand that's exactly the line of defense tried by Apple and this line of defense was denied exactly with the reasoning above.

The DOJ wants to have it's cake and eat it to. It claims that the best sellers and new releases that actually increased in price are a significant enough to pursue a price fixing case. But when it comes to a predatory pricing case, they decide to throw in a bunch of other products to offset the losses. As if books are a commodity.

As far as I remember there was no predatory pricing case whatsoever: Amazon's didn't have to defend its business practices, the line of defense was invalidated from the beginning. Basically the DoJ didn't have to prove that Amazon's practices were ok to successfully prove that that Apple's practices were unlawful.

I guess that if Apple believes that Amazon's practices were not ok the correct course of action would be filing a lawsuit.

The goal of antitrust law is healthy competition, not lower pricing. I think the DOJ was distracted from that. Amazon's strategy left no room for significant new competitors.

Healty competition, I agree, but I don't think Apple's competition was healthy: I actually think that the current situation is better than with the price-fixing model in place, Amazon's market share notwithstanding. If Apple wants to eat away at Amazon's share it can, by investing in better prices, a better experience, exclusive titles etc... all of this means advantages to the customer, not disadvantages forced across the board.

Do you have a proof that Amazon's eBook division was actually profitable other than the DOJ's claim that has no numbers or methodology? Do you have any precedent that says the predatory pricing claims are based on the profitability of a whole division?

If the DoJ claims Amazon's division was profitable I have little reason not to believe them, especially without proof of the opposite. Did Apple contest the claim?

Precedents there are aplenty, basically any unsuccessful lawsuit agains loss-leader practices. But I admit that even this is misleading: if and when predatory pricing applies is a huge can of worms which has to be decided basically case by case. Can this be consudered loss-leader? I think so, but it's a good question... The only way to know is when the matter gets decided in court.

My opinion is that if Apple believed to have a case it would have filed a lawsuit against Amazon for predatory pricing: since it did not , the lawyers must have believed not to have a case. I can't imagine Apple not filing the lawsuit evaluating it not worth it even with a small chance of success, given what was at stake.

 

[BaldiMac]

Begging the question means assuming the conclusion. In this case the assumption of unlawful practices is the premise, not the conclusion: my conclusion is not that the practices were anti-competitive but that given an anti-competitive practice, even applied against a monopoly, it's still unlawful.

You stated a monopoly position doesn't give the "right to its competitors to engage in unlawful anticompetitive practices." That's begging the question. If they did have the right, the practices wouldn't be unlawful or anticompetitive.

As far as I understand that's exactly the line of defense tried by Apple and this line of defense was denied exactly with the reasoning above.

Obviously, I disagree with the court's decision. (Which isn't to say that the court is wrong. The law has plenty of room for interpretation.)

As far as I remember there was no predatory pricing case whatsoever: Amazon's didn't have to defend its business practices, the line of defense was invalidated from the beginning. Basically the DoJ didn't have to prove that Amazon's practices were ok to successfully prove that that Apple's practices were unlawful.

Correct. Completely independently of the Apple case, the DOJ claims to have investigated Amazon for predatory pricing and came away satisfied with Amazon's practice because their eBook division as a whole is profitable. However, that logic is without legal precedent. It treats books as a commodity when they are not. Different books have different value.

I guess that if Apple believes that Amazon's practices were not ok the correct course of action would be filing a lawsuit.

Sounds so simple when you put it that way.

However, that course of action would have meant delaying their entry into eBooks by years or losing vast amounts of money to enter the market at below marginal pricing. It would have also have been based on Apple assuming that their entry would be found to be illegal. They apparently did not.

Healty competition, I agree, but I don't think Apple's competition was healthy: I actually think that the current situation is better than with the price-fixing model in place, Amazon's market share notwithstanding.

Current competition is to some extent a result of Apple's entry into the market!

What the case should be about is competition before and after Apple's entry into the market. All metrics that I have seen point to MORE competition both in market share and pricing after Apple entered the market.

Before Apple, you had one company setting prices for 90% of the market. After Apple, you had hundreds of publishers competing on pricing. None with more that 20% or so of the market. Sounds healthier to me.

(And to show the DOJ's "flexible" perspective on this market... After going after the five publishers that make up less that 40% of the market for collusion, they approve the merger of the top two publishers that control over 30% of the market. Bananas.)

If Apple wants to eat away at Amazon's share it can, by investing in better prices, a better experience, exclusive titles etc... all of this means advantages to the customer, not disadvantages forced across the board.

All they'd have to do is lose money on the top 25% of their sales to enter the market! Personally, I consider that a barrier to entry.