July 23, 2012

Fair Kindergarten Rules for the DOJ

by Alan Beatts
The Department of Justice has released its response to comments requested on its suit against Apple and five of the six major U.S. publishers.  Arstechnica has published a detailed discussion as well.  In it Jacqui Cheng distills the DOJ's position thus --

"But the DoJ says two wrongs don't make a right, even if Amazon did have a real monopoly. 'There is no mistaking the fear that many of the commenters have of the prospect of competing with Amazon on price. No doubt Amazon is a vigorous e-book competitor,' The DoJ wrote in its response. "The future is unclear and the path for many industry members may be fraught with uncertainty and risk. But certainly there is no shortage of competitive assets and capabilities being brought to bear in the e-books industry. A purpose of the proposed Final Judgment is to prevent entrenched industry members from arresting via collusion the potentially huge benefits of intense competition in an evolving market."

I agree completely that engaging in an illegal action in reply to an illegal situation is no defense and shouldn't be excused from prosecution.  However, the DOJ's case still doesn't seem to clearly prove that the publishers conspired as to pricing.  It still seems rather that, by supporting the agency model, they conspired about a business and sales model that would allow them to raise (or lower, for that matter) prices.  The two things are not the same and it takes a fair amount of stretching to fit the actual case into the legal definition of price-fixing.

But, even if the publishers and Apple are guilty, it seems that even the DOJ is starting to agree that prior to 2010, Amazon did have a monopolistic control of the ebook market.  If so, then it seems the effect of the settlements and the outcome of the case should take that control into account and not set the stage for a return to it, regardless of the guilt or innocence of Apple and the publishers.

You can find the whole 64 page response as a PDF here.

1 comment:

  1. Unfair business practices fit their model to a legal T under California law.

    Monopoly is harder to cover all the requirements, but one I feel will be proven at some point.

    Great piece, Alan.