I'm missing something here. Jobs gives an alternative to publishers to break the monopoly Amazon had on the market and now he's a criminal? Isn't that called competition?
Yes, you are missing lots. You misunderstand the situation in at least 3 ways:
1) Apple is in trouble for competing against Amazon.
2) Assuming that Amazon had a monopoly, that Amazon was bad because of it.
3) More competitors is good.
1)
The law is about preserving or allowing competition, not competitors. The end goal is about letting the regulated market generate benefit for consumers. Apple did become a new competitor, but DOJ asserts that Apple eliminated / prevented price competition. There are other companies trying to jump into the ebook market as well, but only Apple tried preventing competition on price. This is what they are in trouble for.
2)
The laws are not anti-monopoly. Monopolies are seen as a reward, in legal and economic fields, as a reward for doing well in the competition -- which Amazon did in this case. The reason why monopolies are the ones that run afoul of anti-trust laws, is because you need a big enough market power in order to succeed with unfair market practices. There's no fear, in a market with lots of small competitors, for one of them to unfairly limit competition or competitors.
Amazon, even if they had a monopoly, was winning the market fair and square. It kept driving down prices to a point that was still profitable for them but others couldn't keep up. Consumers kept benefiting from the low prices, and given Amazon's success, it meant that's what consumers wanted. And this, making the market generate value for the consumer, is the goal of competition law.
3)
Apple, on the other hand, killed off price competition in the market (if the DOJ is correct). They forced competition to be on a narrower set of product attributes. What Apple did was not to compete better, but to prevent competition in the product attribute they couldn't. Rather than let consumers choose between Kindle and a lower price vs iBooks and a higher price -- Apple made it so you had to choose between Kindle vs iBooks at the same higher price.
Given that Amazon was winning the ebooks market, and Apple's own memo, it means that consumers care about price more than other product qualities. Because of Apple, consumers can't benefit from price competition. 1 competitor, or 300 competitor, you will always get the same price. No matter how many competitors, there is no competition on the thing customers cared the most about -- price. So then what's the point of having these competitors?
Anyhow, this whole thing is called price fixing. A fundamental element behind it is that there are multiple "competitors" who don't compete on price. (If there weren't multiple "competitors" then you wouldn't need to "fix" the price.)
P.S. For those who actually understand this case, I know I made quite a few shortcuts. I apologize.
