Chris Martucci’s Whatblag.com:
In other words, Apple’s agency model required all seven publishers to take away retail price control from other e-book retailers, effectively “stripping them of any ability to discount or otherwise price promote e-books out of the retailer’s own margins” (66).
If that’s not price-fixing, I’m not sure what is.
Martucci is quick to discount Crovitz’s Wall Street Journal piece (posted on the Loop earlier today) as “disingenuous.”
Conversely, you could argue Martucci’s/DoJ’s claim is disingenuous.
Apple didn’t force the publishers to enact unilateral pricing. The publishers chose to enact unilateral pricing. Apple required only that the publishers price match their iBookstore offerings against competing sellers.
They could just as well have simply matched prices, or perhaps (depending on the full text of the agreement) simply implemented Minimum Advertised Price restrictions.
You’d be hard-pressed to argue that. “Force” has nothing to do with it. We’re talking about Section 1 of the Sherman Antitrust Act which deals with conspiracy, not force. Conspiracy is simply an agreement between parties to engage in some illegal activity, and the defendants in this case agreed to move to an agency model in which Apple was guaranteed the lowest possible price, thus eliminating price competition. If that’s not enough, I’d inform you that the court only needs to prove that conspiracy is “plausible” (before 1970, it only had to be “conceivable”) — so there’s a lot of room there. Furthermore, the parties’ intentions need only be impure for the court to find them guilty of a per se violation. I’m sorry, but Apple’s not in a great position here.
THe issue isn’t if Apple’s Agency Model is like non Apple ones, but is it just like the model they use for everything else. And it is. outside of the favored nation clause which might not appear on things like music and tv shows. So make them drop that clause.
But that Apple is using an agency model isn’t proof that they colluded even if the publishers did among themselves. After all there is precedent for them offering that model and they followed that precedent. The publishers wanted that model and demanded it from Amazon etc. They could have stuck with wholesale models and still tried to put on a pricing rule. They could have told Amazon etc to stick it if Amazon didn’t want such a rule in place. Just like Amazon could have told them to stick it over switching to an agency model.
And speaking of Amazon, where was the DOJ, the states etc when they were forcing their rules on the publishers to the point of selling some titles at a loss and taking over the market share by leaps and bounds. Why was the DOJ apparently not concerned about such a huge company pulling that kind of move.