Legal Experts Suggest Justice Department Unlikely to Win Antitrust Suit Against Apple

In the wake of yesterday's announcement that the U.S. Department of Justice has filed an antitrust lawsuit against Apple and a number of book publishers over alleged price fixing, CNET notes that the government may have a hard time winning its case against Apple. The publishers may, however, find themselves on the losing end of the case should they be unwilling to settle.

"It's a harder case against Apple than the publishers," says Geoffrey Manne, who teaches antitrust law at the Lewis and Clark Law School in Oregon and runs the International Center for Law and Economics.

One reason lies in the Justice Department's 36-page complaint, which recounts how publishers met over breakfast in a London hotel and dinners at Manhattan's posh Picholine restaurant, which boasts a "Best of Award of Excellence" from Wine Spectator magazine. The key point is that Apple wasn't present.

But even the case against the publishers is not a sure thing for the Department of Justice. Some experts suggest that even amid claims that the publishers met to discuss a shift to an agency model being championed by Apple, the publishers may not be found guilty of antitrust violations.

Specifically, the Supreme Court has ruled in the past that pricing arrangements among competitors are not automatically considered to be violations of antitrust law, and that the setting of minimum retail pricing by manufacturers is a permitted policy.

ibooks ipad hand
Several of the publishers involved in the lawsuit have already settled, but Macmillan and Penguin are holding out along with Apple to fight the case. Almost immediately following the filing of the Department of Justice's lawsuit, a number of states filed their own claims against the companies, citing customer overcharges of over $100 million since the move to an agency model of pricing. Regulators in other countries are also reportedly looking at whether they wish to take action on the matter.

Popular Stories

New Things Your iPhone Can Do in iOS 18

20 New Things Your iPhone Can Do in iOS 18.2

Monday December 16, 2024 8:55 am PST by
Apple released iOS 18.2 in the second week of December, bringing the second round of Apple Intelligence features to iPhone 15 Pro and iPhone 16 models. This update brings several major advancements to Apple's AI integration, including completely new image generation tools and a range of Visual Intelligence-based enhancements. Apple has added a handful of new non-AI related feature controls as...
iphone 16 apple intelligence

Apple Drops Plans for iPhone Hardware Subscription Service

Wednesday December 18, 2024 11:39 am PST by
Apple is no longer planning to launch a hardware subscription service that would let customers "subscribe" to get a new iPhone each year, reports Bloomberg's Mark Gurman. Gurman first shared rumors about Apple's work on a hardware subscription service back in 2022, and at the time, he said that Apple wanted to develop a simple system that would allow customers to pay a monthly fee to gain...
iPhone 17 Pro Dual Tone Feature 1

iPhone 17 Pro Rumored to Stick With 'Triangular' Camera Design

Wednesday December 18, 2024 2:36 am PST by
Contrary to recent reports, the iPhone 17 Pro will not feature a horizontal camera layout, according to the leaker known as "Instant Digital." In a new post on Weibo, the leaker said that a source has confirmed that while the appearance of the back of the iPhone 17 Pro has indeed changed, the layout of the three cameras is "still triangular," rather than the "horizontal bar spread on the...
elevation lab airtag battery

Your AirTag's Battery Will Last for Up to 10 Years With Elevation Lab's New TimeCapsule Enclosure

Wednesday December 18, 2024 10:05 am PST by
Elevation Lab today announced the launch of TimeCapsule, an innovative and simple solution for increasing the battery life of Apple's AirTag. Priced at $20, TimeCapsule is an AirTag enclosure that houses two AA batteries that offer 14x more battery capacity than the CR2032 battery that the AirTag runs on. It works by attaching the AirTag's upper housing to the built-in custom contact in the...
apple tv 4k yellow bg feature

New Apple TV Rumored to Launch Next Year With These Features

Tuesday December 17, 2024 9:02 am PST by
The current Apple TV 4K was released more than two years ago, so the streaming device is becoming due for a hardware upgrade soon. Fortunately, it was recently rumored that a new Apple TV will launch at some point next year. Below, we recap rumors about the next-generation Apple TV. Bloomberg's Mark Gurman last week reported that Apple has been working on its own combined Wi-Fi and...
blackmagic vision pro

Blackmagic Debuts $30K 3D Camera for Capturing Video for Vision Pro

Monday December 16, 2024 4:17 pm PST by
Blackmagic today announced that its URSA Cine Immersive camera is now available for pre-order, with deliveries set to start late in the first quarter of 2025. Blackmagic says that this is the world's first commercial camera system designed to capture 3D content for the Vision Pro. The URSA Cine Immersive camera was first introduced in June, but it has not been available for purchase until...
mac pro creativity

Apple Launched the Controversial 'Trashcan' Mac Pro 11 Years Ago Today

Thursday December 19, 2024 7:00 pm PST by
Apple launched the controversial "trashcan" Mac Pro eleven years ago today, introducing one of its most criticized designs that persisted through a period of widespread discontentment with the Mac lineup. The redesign took the Mac Pro in an entirely new direction, spearheaded by a polished aluminum cylindrical design that became unofficially dubbed the "trashcan" in the Mac community. All of ...
iPhone 17 Slim Feature

'iPhone 17 Air' With 'Major' Design Changes and 19-Inch MacBook Detailed in New Report

Sunday December 15, 2024 9:47 am PST by
Apple is planning a series of "major design" and "format changes" for iPhones over the next few years, according to The Wall Street Journal's Aaron Tilley and Yang Jie. The paywalled report published today corroborated the widely-rumored "iPhone 17 Air" with an "ultrathin" design that is thinner than current iPhone models. The report did not mention a specific measurement, but previous...

Top Rated Comments

diamond.g Avatar
166 months ago
So they weren't even present, and the publishers control the price? Umm.... why is Apple being sued again?

I thought it was due to the "Most Favored Nation" clause?
Score: 8 Votes (Like | Disagree)
LaWally Avatar
166 months ago
So they weren't even present, and the publishers control the price? Umm.... why is Apple being sued again?
Apple is being sued because it has agreements with the publishers who are accused of trying to use the agency model to allegedly price fix and is therefore considered complicit in the act. Apple is in effect "aiding and abetting" the alleged price fixing in the government's eyes by providing a vehicle through which the publishers can price fix.
Score: 7 Votes (Like | Disagree)
spiderman0616 Avatar
166 months ago
If Apple or the other publishers lose this battle, you are going to see Amazon being turned into the Walmart of e books. They can just undercut like crazy until everyone else shrivels and dies. It's suing one problem and protecting a whole other problem.

I personally like the agency model because it actually supports the industry. I'm not defending Apple's methods, because I still don't know if they're guilty of anything illegal or not, but I'm just saying that I'm not in favor of paying less for something if in turn it kills the company providing the content to me.
Score: 7 Votes (Like | Disagree)
IJ Reilly Avatar
166 months ago
The MFN clause itself is not a problem. The DOJ was alleging that Apple participated in a conspiracy to engage in price fixing. If they participated in a meeting where they and the publishers discussed a strategy to engage in price fixing, that could be a problem.

However, it would not be a problem if Apple simply individually negotiated terms with each publisher, even if the publishers told Apple what other deals they received, or if Apple told the publishers what other publishers were willing to accept. Unilateral action is OK, and revealing other deals is a legitimate attempt to gain leverage. That's the crux of Apple's defense in the separate class action lawsuit.

QFT. The CNET article is heavily spun, which is not surprising considering who wrote it. Legal analysts are going to be all over the map at this point, if only because they've seen only the government's complaint, not Apple's or the publisher's responses. But if you quote libertarian think tanks you are going to get predicable results.

Obviously it's the publishers who are at the pointiest end of the stick, but I don't think Apple needs to have been present at any meetings to be found a party to price fixing. It's going to be difficult to claim that all of these publishers came to the same terms with Apple by mere coincidence. The one quoted email from Jobs pretty much refutes that theory anyway.

All antitrust cases are difficult for the government to prosecute. Citing the DoJ's failures in recent history isn't telling close to the whole story, since most of these cases never make it to trial. They are overwhelming settled out of court by consent decrees, in which the government typically gets at least some of the changes they are seeking. Mr. McCullagh doesn't share that little factoid with us because it doesn't make the government look blithering.
Score: 6 Votes (Like | Disagree)
Amazing Iceman Avatar
166 months ago
Another waste of taxpayer dollars... :rolleyes:

Yep. The DOJ should be more concerned about regulating the price of gasoline and food, so we the consumers don't have to keep paying those outrageous prices. People can choose to buy or not to buy a book, but people have no other choice than to buy gas and food.

What happened to paying under $1 per gallon?
Score: 5 Votes (Like | Disagree)
Evan_11 Avatar
166 months ago
They essentially killed book stores buy undercutting them so there are few left, and did the same to ebooks with 90% of the market because they were selling below cost.

Amazon didn't kill the small book stores. Barnes & Noble and Borders did. Amazon then killed Barnes & Noble and Borders.
Score: 4 Votes (Like | Disagree)