Thoughts On Apple’s E-book Appeal

On Monday, December 15, 2014, Apple’s appeal of the e-book anti-trust case was heard. Here are some of my thoughts on the matter.

Drug Dealer Analogy

Deputy Solicitor General Malcolm Stewart…called in to defend the antitrust ruling…tried several times Monday to compare Apple to a driver who carries a narcotics dealer to a drug pick up.

The point of his analogy…was that, if Apple knew book publishers were engaged in an unlawful conspiracy to fix the price of e-books and was prepared to facilitate that conspiracy, it was as guilty as they were.

Judge Dennis Jacobs would have none it. Narcotics trafficking, he pointed out, was one of the very few “industries in which the law does not look with favor on new entrants.”

The packed courtroom erupted in laughter. ((All quotes — unless otherwise indicated — are taken from the article entitled: “They laughed at the DOJ’s e-book antitrust case against Apple” by  Philip Elmer-DeWitt @philiped DECEMBER 15, 2014))

The “Drug Dealer” analogy illustrates how differently the two opposing sides see this case. The Department of Justice sees Apple as the ringleader who galvanized the Book Publishers into performing an illegal act. Apple sees itself not as the driver of a getaway car filled with drug dealers but, as a bus driver who should not be held accountable for the subsequent illicit actions of that buses’ passengers.

But Apple’s protestations of innocence go much further than this since they don’t believe that either they or the Book Publishers were committing a crime. Apple contends that, in challenging Amazon’s book selling monopoly, they were performing a public good. Going back to the Department of Justice’s analogy, Apple doesn’t think they were driving a getaway car or a bus. Apple thinks they were driving a fire truck on its way to put out the monopoly fire caused by Amazon. In Apple’s view, their actions should have been applauded by the Department of Justice, not condemned.

Per Se

The appeal is likely to turn on an obscure legal point: Did the district court judge commit a reversible error when she found Apple guilty “per se” of a horizontal price fixing conspiracy?

From the admittedly skewed perspective of this recovering attorney, “per se” is anything but obscure.

A quick example might be helpful. If you were driving down the road and the truck in the next lane exploded, you would need to prove negligence in order to collect damages. But if the truck were carrying dynamite, the truck would be considered inherently dangerous. No proof of negligence would be required by a plaintiff. The truck would be considered — by virtue of carrying a dangerous cargo like dynamite — negligent per se.

In the Apple e-book anti-trust case, Judge Cote treated Apple like a truck filled with dynamite. The Department of Justice was not required to prove Apple was in violation of anti-trust law. Illegality was assumed.

The key legal question was whether the Apple’s conduct as a new entrant in the e-book market should have been viewed as “per se illegal”—in which case it could be simply presumed to be anticompetitive—or whether it should have been judged under a more demanding “rule of reason” analysis, in which case the fact finder (which here was Judge Cote) had to undertake a much more searching investigation of all the circumstances in order to decide whether the conduct was pro-competitive (i.e., benefitted consumers) or anticompetitive.

I know about one one-thousandth as much anti-trust law as does Judge Cote but, even so, I could never shake the feeling that it was a mistake for her to apply the “per se” standard to Apple. And I’m not the only one who felt that way. Apple obviously disagreed with the Judge’s stance and they had relevant case law from the Supreme Court to back up their position.

Apple argues that vertical price-fixing agreements — for example, between an e-book distributor and e-book publishers — are not per se unlawful. At trial and in its appellate brief it invoked the Supreme Court’s ruling in Leegin Creative Leather Prods v. PSKS that vertical price restraints must be weighed by the more forgiving “rule of reason. ((”Why Apple’s e-book appeal is a big deal by Philip Elmer-DeWitt @philiped DECEMBER 14, 2014))

Justice scale on blue background

Why Not Amazon?

When the Department of Justice charged Apple with conspiring to fix the price of e-books, the case was widely seen in both Silicon Valley and New York publishing circles as an error of enforcement.

Why was Apple, a giant in its own right but a new entrant in the e-book market, being prosecuted and not that other giant, Amazon?

Amazon, after all, had an 80% to 90% share of the e-book market — a monopoly by almost anybody’s standard — and was selling the publishers’ most important titles below cost. ((Book News: Apple Enters A New Round In E-Book Price-Fixing Fight DECEMBER 15, 2014))

This case has always been confounding to the majority of those who study anti-trust law. Instead of pursuing Amazon, the monopolist, the Department of Justice pursued Apple, the new entrant. Some of the members of the Appeals Court also viewed this as odd.

At times Judge Jacobs came close to suggesting that the government had prosecuted the wrong company. At the very least, he said, a horizontal initiative “used to break the hold of a monopolist” ought not be found to be illegal per se. He likened any collusive conduct on the publishers’ part to “mice getting together to go put a bell on the cat.”


This case has always been about prices. The Department of Justice views high prices as anti-consumer — and therefore in violation of anti-trust laws — and low prices as a public good. The problem with this approach is that it is both bad economics and bad policy.

Bad Economics

Economists know there is no such thing as a “fair” price but non-economists don’t see it that way at all. Most consumers view high prices are always bad and low prices are always good.

Take, for example, the price of oil. When prices go up, people are outraged, oil companies are castigated in the popular press and governments hold hearings. When prices go up, it’s viewed as an evil conspiracy led by evil conspirators and it’s darn well got to be stopped.

And when prices go down? Nary a whisper is heard from consumers, conspiracy theorists or government regulators. When prices go down, it’s due to supply and demand — just economics doing its thing. Economic theory seemingly never works when prices go up but always works perfectly when prices go down.

The government’s anti-trust enforcers seem to view the economics in the Apple e-book case in the very same simplistic way as most consumers view oil prices. High prices are bad. Low prices are good. End of story. After Apple entered the e-book market, book prices went up. To the Department Of Justice’s way of thinking, what more did one need in order to prove that Apple and the Book Publishers were anti-competitive co-conspirators?

Turns out, one needs to know more. A lot more.

The judges appeared to give weight to this suggestion, and to accept (Apple’s) contention that a brief price spike, which damned Apple and the publishers before Judge Cote, should not result in an automatic finding of illegal price-fixing. Instead, (Apple) said the price spike was limited only to the five publishers, and that the overall effect of Apple’s entry to the ebook market dramatically benefited consumers since many more players were willing to enter the market.

Bad Policy

In addition to being bad economics, the government’s position on pricing was also bad policy. The Department of Justice saw itself as the protector of consumers. If consumers were hurt by Apple’s actions then, in their view, Apple was in violation of anti-trust law.

But the purpose of anti-trust law is to provide more competition, not lower prices, and that’s exactly what Apple was doing. By focusing on prices instead of competition, the Department of Justice completely lost sight of its mission.

Of Course Prices Went Up

I have always viewed the Department Of Justice’s stance on pricing to be non-sensical. OF COURSE PRICES WENT UP. Amazon was selling some books below cost and AT A LOSS. This is a classic way to monopolize a market and is often characterized as predatory pricing. When Apple entered the market, Book Publishers added contractual clauses that caused Amazon to lose its ability to sell books at a loss. Rising prices were not an indication that Apple was gaining an anti-competitive advantage, they were an indication that Amazon was losing an anti-competitive advantage.

When Apple tried to point this out to Judge Cote she would have none of it. She quite clearly stated the wrongdoing of Amazon did not exonerate Apple. And in a sense, she was quite right. For example, If the guy in the car next to you is driving 30 miles per hour over the speed limit, that does not excuse you from getting a ticket if you are driving a mere 15 miles per hour over the speed limit. The wrongdoing of others does not excuse your own wrongdoing.

What Judge Cote stoutly ignored was context. Apple’s actions were not occurring in a vacuum — they were occurring in response to Amazon’s actions. Using my speeding analogy, Apple may well have been speeding but, in their view, they did not deserve a ticket because they were acting like a fire truck, rushing to put out the monopoly fire initiated by Amazon.

Judges Jacobs and Lohier seemed quite concerned that Judge Cote had used the wrong standard, but Jacobs’s qualms clearly went much further—seeming to question the government’s judgment in ever having brought the case. His problem was that Apple was a new entrant that was bringing competition to a market that had been, until then, dominated by a “monopolist,” Amazon. Judge Jacobs also repeatedly referred to Amazon’s $9.99 pricing policy, whereby it sold books at below the wholesale acquisition cost, as “predatory pricing,” and seemed to suggest that Amazon was obviously using it as a means of maintaining its monopoly dominance.”


If Apple loses at the Appellate level, there is no doubt in my mind that they will appeal the case to the Supreme Court. If the Supreme Court accepts the matter, the case will live on.

And if Apple wins? I very much doubt if the Appellate court will dismiss the case outright. It is far more likely that they will remand the case to a lower court in order to have a portion of it re-litigated. Once again, the case will live on (and on and one and on…).

If Apple wins its appeal, the most interesting question to me will be whether the Appellate Court remands the case to Judge Cote or to a different Judge altogether. Common sense would tell you that it’s a bad idea for an Appellate Court to chastise a Judge and then ask that Judge to be objective when re-trying that same case again. But we in the legal profession do not see ourselves as subject to those emotions so readily exhibited by ordinary people. In fact, we sometimes do not see ourselves as people at all.

There is no shortage of lawyers in Washington, DC. In fact, there may be more lawyers than people. ~ Supreme Court Justice Sandra Day O’Connor ((Excerpt From: Robert Byrne. “The 2,548 Wittiest Things Anybody Ever Said.” iBooks.

If the Appellate Court were to remand the case Judge Cote, they would be saying that she made a mistake in law. If they remand the case to a different Judge, that would be highly unusual. And highly suggestive, as well.

Published by

John Kirk

John R. Kirk is a recovering attorney. He has also worked as a financial advisor and a business coach. His love affair with computing started with his purchase of the original Mac in 1985. His primary interest is the field of personal computing (which includes phones, tablets, notebooks and desktops) and his primary focus is on long-term business strategies: What makes a company unique; How do those unique qualities aid or inhibit the success of the company; and why don’t (or can’t) other companies adopt the successful attributes of their competitors?

72 thoughts on “Thoughts On Apple’s E-book Appeal”

  1. Thanks for the analysis John. IANAL, but this one baffled me from a lay persons perspective because the government stepped in to protect the monopolist.

    In open systems like capitalism, we do need checks and balances to present abuse. But it isn’t only consumers who need protection from abuse, sometimes suppliers need protection as well.

    Since the original judgement against Apple. Amazon has been wielding it’s monopoly power against suppliers (book publishers). Not content to merely less at a loss to monopolize the market, it had been withholding sales completely, to coerce publishers into lower supplier pricing.

    How is that not illegal? And what is the end game? Destroying the publishers as viable going concern, so Amazon can take over the publishing business as well?

    I hope Apple wins the appeal and Amazon gets more scrutiny on it’s behavior.

    1. “Not content to merely less at a loss to monopolize the market, it had been withholding sales completely, to coerce publishers into lower supplier pricing.”
      Hachette books were available from Amazon, just with less of a discount and it’s third party sellers also had them available often at a low price.

        1. Since they had no contract, they could not guarantee that Hachette would provide them with books once the bok was out soon pre-order buttons. They didn’t mess with shipping dates, they just didn’t keep books in stock and therefore delivery dates depended on turn around from Hachette. Even so, they did little different than Barnes and Noble had done for six months to Simon and Schuster last year. What kindle editions did they remove?

          1. SLNH,

            Amazon by reducing Hachette revenues through clever and almost deniable means also inflicted losses on itself.

            Are you interested in a bridge in Brooklyn? ; )

          2. Amazon was trying to bring Hachette to the negotiating table. Hachette ignored any attempt to talk to them before the contract ran out and extended it a month with Hachette still ignoring them.Amazon also offered to help mitigate author losses during negotiations but Hachette refused. In the meantime Amazon successfully resolved conflicts with Warner and Disney, accepted SImon and Schuster terms with very few tweaks in a matter of weeks before their contract ended and finished successful negotiations with another big five publisher before their contract ended. Hachette was responsible for its own losses.

          3. Right. All I had to do was read the news start and stop dates. Funny how quickly Hachette caved after Simon and Schuster’s deal was announced. Less than a month later. SImon and Schuster initiated the terms and Amazon agreed. Why wasn’t Hachette able to do something similar? Agency is still in place and Amazon looks as if they will take a smaller discount for lower prices. Hachette’s own marketing material stated that they would have agency and not discount. They were pretty inflexible until they almost lost the Christmas season and with their higher prices, they may not lose margin but they will lose revenue.

      1. Outbuildings Wal-Mart for Quidsi? Incorporating it into the company and letting it run as before instead of swallowing it up and laying off employees as many companies do?

    2. There is a misconception going around that “free” or “unregulated” markets = efficient, competitive markets. This is what makes some people proclaim that the less government meddles in markets and industries, the better off we will all be. A simplistic and patently false statement. If markets were unregulated, every industry will be made up of either a monopoly or colluding firms, prices will end up higher, and output longer, than they otherwise would be.

      There are many things in economics that are unsettled and subject to vociferous debate, but one that isn’t is that monopolies make more profit than competitive firms and so it always pays for competing firms to collude and just divvy up the higher profits among themselves.

  2. There’s another element of complexity that I think everyone’s overlooking in this case, ie, Apple only sells ebooks on its devices. Not on Android or Windows. So, wouldn’t hire prices in iBooks just prompt consumers to look for lower priced alternatives? Doesn’t make sense to me.

    1. The point of the lawsuit was that the publishers forced all the etailers to the agency matter, not just Apple so prices went up everywhere.

        1. There is.nothing wrong with the agency model. What was wrong was act as a group to force all other retailers to take new contracts as a result of the contract with Apple

          1. Judge Cote found that nothing Apple or the publishers did was illegal. But because Apple knew the publishers would try to push the agency model on other distributors, their actions in agreeing to the agency model were illegal. How did Apple know, well the publishers had been banging on in the press about the agency model for years.

            That’s what dosn’t make sence about the verdict. Sure you can enter into an agency model agreemeant with the publishers, just as long as your not aware that’s what they want. Bizarre.

          2. “Judge Cote found that nothing Apple or the publishers did was illegal. ” Wrong the agency model and the MFN clause are legal. How Apple and the publishers did it was illegal. Suple telling the publishers that signing with Apple was the only way they could beat Amazon. Or telling them they wouldn’t open the in-store unless the publishers all signed.. Double deleting emails . An original proposal from Apple telling them they would need to move everyone to agency. Apple dictated the upper level of prices the publishers could charge.

    2. I’m not a lawyer & I won’t play one on TV. In my view, this isn’t price fixing, its contract fixing.

      I attempted my own brief of the case law referenced above (Leegin Creative Leather Products, Inc. v. PSKS, Inc.), it is apparent that Apple knew it could benefit themselves and the publishers if they could force Amazon to honor manufacturer-imposed retail pricing. Apple’s entrance to eBook retailing enabled the publishers to create new contracts which set minimums on eBook prices. This isn’t the classic definition of “price-fixing,” but it does “look” like collusion.

      I accept Apple’s argument that this apparent “collusion” about contracted pricing is not anti-competitive–retailers simply have to find ways to compete other than merely having the lowest price (a playing field where Apple has had some success).

      1. When you wonder what get’s approved in the App Store and what gets rejected, for seemingly random reasons, you can’t help but wonder what kind of manipulation is going on. Apple is probably the most strategic company of the past few decades. These people are smart!

        So, one wonders, if the Kindle and the Nook Apps are there for a reason… that is, to be able to deny allegations such as those made at this trial. Imagine if they were not allowed. Aside from the uproar from Amazon and BN customers, would that cast a different light on this? There were analogous things that weren’t allowed… Flash, being a prominent example. Google Voice, and alternate keyboards being others, for a while. (A DOJ inquiry was required for Google Voice). I’m not offering this as proof, just as something to think about.

        1. It’s a fascinating game of three-dimensional chess. I enjoy watching it from the outside. The logistics of their manufacturing and distribution blow me away.

          Apple’s game is not for the feint of heart (or for the inept and incompetent – just ask G.T. Advanced Technologies or any of the other suppliers who’ve lost favor).

          I only hope the competition keeps coming so Apple doesn’t stumble badly & start phoning it in. Is there a bad pun there?

        2. “Flash, being a prominent example”

          Just some advice, you really need to stop using Flash as a talking point. Flash fell on its own sword. I don’t know if you have much development experience, but I do, and Flash is absolute crap, always was. Flash simply could not survive the transition to mobile. End of story.

          There are real examples of Apple being heavy-handed, and at the scale Apple operates, they make mistakes as well. But Flash doesn’t qualify as an example of either. When Jobs wrote his Thoughts on Flash, there was no hidden agenda. He outlined what was wrong with Flash (which was a lot). It isn’t any deeper than that.

          1. I have every right to be wrong and to use crap. As much as anyone else. Whether Flash suck is irrelevant, that’s between me and Adobe. That it happened is what bothers me. One example is all I need to prove this point, I offered three.

          2. If you want to prove that this is a systemic problem and that Apple is purposely a bad actor long term, you need many, many more examples in fact.

            So, you must be absolutely furious that speed limits exist, that the water you use is treated for you before you get it, and so on, right?

          3. Speed limits are place by elected officials that are accountable to the electorate, not the stockholders.

          4. Apple is also elected by its users, in the most direct way possible, with our own money. Apple is also accountable directly to its users, again we vote with our wallets.

            You must not pay attention to Apple stockholder calls, Apple is well known for ignoring Wall Street. You’re all mixed up. Your analogy simply doesn’t work, in fact it proves the opposite point. If ‘being elected’ is your measuring stick, then you’re saying Apple should go ahead and implement policies that benefit those users that choose Apple. Glad we can finally agree on this.

          5. I’m an Apple customer and I object. I didn’t elect them to do that.
            I do admire them for ignoring Wall Street. Problem is, they also ignore democratic principles.

          6. You are not an Apple customer. You simply chose poorly. You’re like a voter who misunderstood the policy platform of a candidate, voted for that candidate, and are now unhappy that the candidate is doing things you didn’t want them to do. But it is your own ignorance that is to blame, not the candidate’s actions.

          7. You do not decide whether I’m an Apple customer. YOU did not spend MY money. Guess what, I’m entitled to my ignorance. They did not emblazon the restrictions on the box. In fact, they didn’t even have an App Store when I bought in. When the iPad launched, I did not get one (except for my wife, when she annoyed me).
            Still, this is not a legal trial, it’s about the pro’s and con’s. Freedom is a given, not an option.

          8. Of course you are entitled to your ignorance. You seem to not be aware of many of the rules and regulations and the closed systems in operation around you every day.

            But back to Apple, the arguments you make about Apple have been made for three decades now. It has been obvious since the first Mac that Apple’s approach was about curation, simplifying, abstracting the computer, and a focus on the user experience via an integrated approach. You really aren’t much different from the nerds bitching about the GUI way back then and how bad that was and how much control we lost, and on and on and on. We can look back now and see that the GUI actually created the freedom to move forward, expand.

            I’m not sure I buy the argument that you didn’t know this about Apple until just recently. And Apple certainly hasn’t gotten any worse, in fact for those of us that see Apple’s approach as a benefit that delivers a lot of value, Apple has only improved. You see this approach as restrictive. I see Apple’s approach as creating a new kind of freedom that moves us all forward.

          9. I’m as entitled to my ignorance as you are to your elitism.
            I repeat, rules and regulations, which I am bound to abide are set by elected officials around a democratic process. When Apple adopts that, then we can discuss them in that context.

          10. Ah, but Apple does operate in the way that you describe. The users vote for Apple products and services with their wallets. Apple is elected by the users and is accountable to the users. It is the most direct form of democracy there is.

            Also, the nerds that fought against the GUI, those are the real elitists, seeking to keep computing power out of the hands of normal people. Apple is the one working towards abstraction and simplicity, the computer for the rest of us.

          11. In the case of Flash on iOS, you do not have the right to use crap as the app store is a curated store and not open like Android. The analogy would be like saying that homeless bums or shoplifters (Adobe Flash) should be allowed to hang out in a shopping mall (app store). Apple has every right to decide what it allows in the app store in the same way that the people who run the shopping malls get to decide who they will allow in their malls and stores.

            You as a consumer can choose to shop elsewhere but that should not take away my rights to be able to shop at a shopping mall or in the app store knowing that both places will be a more safe and pleasant place to shop.

          12. “In the case of Flash on iOS, you do not have the right to use crap as the app store is a curated store and not open like Android.”

            Wow! Just Wow!
            If iOS were a country, I would choose to live somewhere more democratic. You know, one that allowed different neighborhoods, not just Rodeo Drive.

          13. “If iOS were a country, I would choose to live somewhere more democratic”

            But in fact you do live in iOS, where your daily life is governed by rules and regulations and closed systems are the norm. We’ve been through this. First world countries are not open, they are closed, and because this benefits you, you have no problem with it.

          14. By elected officials, and Constitutions that override unconstitutional laws…
            We’ve been through this….

          15. Yes, and using your own logic, Apple is indeed elected by users, in the most direct way possible, and is also directly accountable to those users. This satisfies your requirements on the subject of when closed systems are okay. You can’t have it both ways.

          16. The only thing I will grant you is that people can self-censor and and self-abdicate their rights. As a fellow user, I choose not to be curated. YOU don’t get to decide that for me. My argument is that no one gets to decide that for me, because I choose not to abdicate. My recourse? I get to bitch about it.

          17. “The only thing I will grant you is that people can self-censor and and self-abdicate their rights.”

            Yes, that is called civilization, or call it democracy. You do in fact choose to be curated. As part of a larger group we do in fact decide for each other. Many people get to decide for you, and you do abdicate. There’s only one instance where you bitch about this, when it comes to Apple. That is illogical and inconsistent.

          18. It’s not inconsistent, and I’ll tell you why. You try to take my insistence on choice over the command of my property as some form of anarchy. That I accept restrictions elsewhere in my life, but not from Apple. Well, elsewhere in my life I am protected by a Constitution, which clearly defines the right to which we are entitled by birth. It also protects minorities from oppressive majorities.

            You happen to agree with the oppressive majority. That does not, using democratic principles, permit you to impose that on me. It’s the principles that I’m judging, not the practicality, not the taste, not the finances.

            If Apple were sufficiently important, in the overall scheme of things, one could legitimately ask “Can you be in favor of BOTH democracy and Apple?”. Fortunately for all of us, they are not sufficiently important.

            On other topics I do bitch about things that I find hypocritical and undemocratic. Those are not the topics discussed here.

          19. “Well, elsewhere in my life I am protected by a Constitution, which clearly defines the right to which we are entitled by birth. It also protects minorities from oppressive majorities.”

            The same kinds of mechanisms exist to protect you and define your rights when it comes to Apple. You’re reaching now, because you made the mistake of admitting that closed and regulated systems are okay within a democratic construct, without realizing that’s exactly what’s happening with Apple and its users. Now you have no choice but to find ways to walk that back and separate the two. But it can’t be done. In fact a customer’s relationship with Apple is more direct, more democratic, and the accountability is more immediate. You’ve painted yourself into a corner here. You really can’t have it both ways.

            And in fact, you are the oppressor, entering into a community that has freely chosen a set of rules which provide benefit and value to the community, and you are seeking to destroy those rules and abolish the democracy.

          20. So it’s like I’m being the United States trying to impose democracy on an unwilling part of the world? 😉

            Is this a sovereignty thing?

          21. It’s more like you’re the US trying to force Canada to end universal healthcare and stop using the metric system, simply because you don’t like or use those things (you don’t find value or benefit in those things).

            “Is this a sovereignty thing?”

            By nature it has to be. Groups that organize and agree on the rules and restrictions of the group within a democratic construct automatically have a certain amount of sovereignty. Of course both sovereignty and freedom are restricted, necessarily so if you want order. And pretty much all membranes are permeable, when we’re talking about groups of humans.

            Back to the US policy of imposing democracy, a bit off topic, but that is not only a failed policy, it is also an illusion. If you think any war was actually about freedom or democracy, I’ve got a bridge to sell you, somewhere in the heartland of ‘Merica!

          22. Mine was actually a sympathetic comment… 🙂

            You’re close. I’m willing to pay for universal health care, but I want to use my own in addition to what came with it, and I don’t want to have to move to do so.

            We’re actually getting somewhere. Yes! Apple (with you) is a group that want’s things to be a certain way. I have a way to legitimize the whole thing under democratic control. You don’t buy a device, you pay for a membership. Make everyone that buys one sign an oath of allegiance, have a secret handshake, and carry on. That way, I would have avoided my ignorant mistakes. 😉

            “Of course both sovereignty and freedom are restricted,”
            Of course, by elected officials, under the auspices of Constitutions.

            Keep in mind that here in the good ‘ol Yew Ess of Ay, we kinda like ya’ll up dere in Canadia. Just keep da SAP button on dat dere SOB and talk ‘merican! 🙂

          23. “You’re close. I’m willing to pay for universal health care, but I want to use my own in addition to what came with it.”

            Not surprising, but what you fail to realize is that your actions damage the system as a whole. When you introduce your own rules to suit your personal needs, the system deteriorates. We have decades of data on this re: healthcare (there is no debate), as you move away from single payer non profit healthcare, costs go up and the outcomes get worse.

            “Though I exclusively favor the metric system for myself, I would not impose it on others.”

            But you do impose your choices on others in a democracy. If a platform was put forth that included switching to the metric system, and you voted for that platform, you are indeed imposing it on others. Use of any non-metric system would then be necessarily restricted. There is no question that as part of a democracy you have imposed restrictions on others through your actions in that democracy. That’s how it works.

            “Apple (with you) is a group that want’s things to be a certain way.”

            The paying customers/users are the group that elects (we choose) Apple. Apple is serving the constituency that voted for it.

            “I have a way to legitimize the whole thing under democratic control.”

            Apple is already a democratic construct, and a very direct one at that.

            “Of course, by elected officials, under the auspices of Constitutions.”

            Elected officials are the mechanism but it is the group that agrees to the rules and restrictions, “We the People”. Once elected (much like Apple) the officials do have power to act on our behalf, that is why we vote for a platform.

            Again, you can’t have it both ways. You’ve admitted that closed and regulated systems are beneficial and good when delivered within a democratic construct. Apple is a very direct democratic construct that delivers value and benefit to a constituency via closed and regulated systems. By your own logic Apple is operating in a way that is beneficial and good.

          24. Not to be combative, but this argument is, frankly, absurd.

            Democracies do not manage their populous so granularly, so as to support the benefit of the system. These limits are clearly defined by the Constitution (in the US at least). In fact, the Ninth Amendment in the Bill of Rights states:

            “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”

            Among other things, and along with other rights, this sets limits on the conformity that can be imposed on the individual by their government. Yes, the government can impose use of the metric system in commerce through duly elected legislators. What they cannot do is impose the metric system in your house or in personal exchanges. It’s not verboten. It’s not “on” or “off”. Even though the US has no official language, we can in principle impose one. Still, no law can be made as to what language is spoken in your house or with your friends. In both cases, those rights are retained by the people.

            Your argument also completely neglects separation of powers. The lawmakers, the executives, and the judiciary. There are no checks and balances, only fiat. There is no recourse for an individual to impose change to the ecosystem other than leaving, which still doesn’t change the ecosystem. In the examples above, they can be changed in the Congress or challenged in the Judiciary.

            But perhaps most telling, is that there are no elections. No due process. No recourse.

            You could, correctly, point out that no company is a democracy. That is true. But most, at least, are not so blatant on managing their customers. It’s like your refrigerator company mandating a vegan (fruitarian?) diet and not chilling your meat. To me, that is an unjust imposition.

            If you haven’t already, watch the movie “Demolition Man” and pay attention to the society within which it is set. In that society all actions are judged on what society as a whole deems are for the benefit of the individual, and thus for society as a whole as well. No one will ever confuse that with a democracy.

          25. “Not to be combative, but this argument is, frankly, absurd.”

            I expected this as your next line of argument, you really have no choice now. Since you did admit that closed and regulated systems are beneficial and good when delivered within a democratic construct, you must now take the position that Apple is not a democratic construct. It’s either that or admit your mistake, and we know you’re not going to admit a mistake. I think that about wraps it up for me.

          26. Okay, now I will be combative. You are at least as dense as I am, but I don’t put words in your mouth, so please don’t put words in mine. I did not admit that closed systems are beneficial and good without qualifications (a democratic construct). I went through sufficient effort to describe those IMPORTANT qualifications. You chose not to consider them.

          27. What are you talking about? I said exactly what you said, “you did admit that closed and regulated systems are beneficial and good when delivered within a democratic construct”.

            No words were put in your mouth. Don’t get mad at me just because your own logic backfired. And now I really am out.

          28. Except for the fact that I never said that. I searched the page for the word “construct”. I used it once in replying to you, after you put the words in my mouth. That what you understood, it’s not what I said.

          29. That is your choice. The thing is that your choice of where to live does not mean that you can dictate to others how they want to live or shop.

          30. But it’s okay for others to tell me because I bought an iPhone? My position does not dictate where anyone could shop (within iOS), yours does restrict me.

            Rhetorical question.

          31. K,

            About Flash. He was just attempting to help make //your// argument stronger by pointing out that the Flash thing is not helpful (to your aims).

          32. We have a past, and a pattern… 😉
            If Space Gorilla was trying to support one of my arguments, then I’m truly a “Monkey’s Uncle”! 🙂

        3. “Flash, being a prominent example. ”

          I agree with Space Gorilla that you have chosen an extremely poor example for your ‘manipulation’ thesis. Flash has always been a resource hog and a tangled nest of bugs and security holes on every platform on which it exists. It’s been three years now since Adobe threw in the towel and gave up on trying to make it work well on any mobile platform (1), and two and a half years since they pulled it from the android store (2).

          Also, contrary to your theory, the first link puts forth a timeline — that adobe did not bother trying to port flash to IOS at first, then spent a couple of years trying to do so with Apple’s help, before they gave up.



          1. The argument is not about the quality, or lack thereof, of Flash. It is about my computer maker being able to cherry pick what runs and what does not. That it is possible to be done, by fiat, is at best, a slippery slope. What’s next? “Thought criminals”?

          2. (retyping a comment that appears to have been silently removed by Discus. WTH can’t it *notify* me when something is held for moderation or removed for language?)

            “It is about my computer maker being able to cherry pick what runs and what does not.”

            And once again, I say you’ve chosen a poor example by harping on Flash. The first couple versions of IOS didn’t have flash because Adobe didn’t bother to port it to IOS. Then they tried to port it, but were unable to trim the bloat enough to make it run acceptably on the slow and RAM-starved iphones of that era, and eventually they gave up. But they never got to the point of submitting an app for approval.

            There are plenty of good examples of Apple censoring apps in the app store (1), including some instances of them approving an app then changing their minds and disapproving it (especially with recent IOS 8 extension
            apps). But instead you chose to trot out Flash, which as I’ve just explained for the second time, is probably the worst example you could have chosen, and then you got in a long, tedious, and pointless argument with Space Gorilla.

            There are people who are anti-Apple because of strongly held principles and convictions that prevent them from buying or using Apple devices. And then there are anti-Apple people who are simply annoying trolls who like to stir the manure and make nuisances of themselves in comment threads. I would like to think that you would prefer to identify with the former group, but currently you are acting like one of the latter.


          3. Most respectfully… I accept your point on the poorness of choice of Flash, that I could have made my point perhaps more effectively and less controversially if I chose another example instead. But here’s the point… I chose two other examples along with Flash, and… Flash alone is sufficient.

            Had Apple not curated, my argument and potential scorn and ridicule would have been with Adobe, as it should have been. Exclusive curation deprives us of judging for ourselves.

            Nonetheless I see your point and I respect it.

        4. Excuse Me!!!

          If I open my own store, I get to decide what I want to buy or sell.

          Why do you think you can tell me what goods to buy or sell?

          Why do you feel like you can dictate the terms?

          It’s my store, if you don’t like it then go open your own.

          1. Wholeheartedly agree. That’s the problem, other stores are not allowed, and it’s that which I’m criticizing.

  3. Thank you for your “post-professional” insight and I wish you a good continued recovery.

    As a very, very, very layperson, please bear with me. If you will, you can call me a “hostile witness, -er “hostile opinionator” (In the proper latin terminology), with an axe to grind. Perhaps Amazon deserves a trial of their own for their own behavior. It is entirely possible that ALL parties mentioned in the trial are wrong, but in THIS trial Amazon was not the accused, so they have no burden to prove their innocence. By all means, if they deserve to be charged for something, then charge them. So to answer “Why not Amazon?”, it could be “Not yet, this is a different crime.”.

    The defendants in this trial were accused of colluding, of conspiring, to fix book prices. Price fixing is a crime.

    From The Verge:

    -Jobs’ statements, Cote said, “remain powerful evidence of conspiratorial knowledge and intent.”

    But the most damning evidence seems to be Job’s own words:
    That’s why “per se”.

    1. “in THIS trial Amazon was not the accused, so they have no burden to prove their innocence. – klahanas

      You’re in good company in your reasoning, Klahanas. That is exactly the position that the Department of Justice took and exactly the decision that Judge Cote made. As I stated in my article, the Court was quite right when they ruled that the (potential) wrongdoing of another does not dismiss one’s own wrongdoing.

      However, Apple is trying to show that their acts were not illegal and/or were made legal precisely BECAUSE of the wrongdoing of Amazon. Whether the Court of Appeals will agree with them is anyone’s guess.

      1. You know, when I got in trouble for beating up Moe McCurly for poking me first in the eye, our teacher Miss Smith-Jones suspended us both. Then again, our teacher had a more holistic sense of justice… 😉

  4. Great perspective. Thanks! I’m guessing Apple thought it could do well and do some good, by cozying up to publishers and zapping Amazon. Certainly it wasn’t about the money: Amazon needs a $10 price; Apple can sell books for $1. Cheaper the better. For Apple, books are just more cheap digital fuel for its iOS missiles. Like tunes, apps, shows, games.

  5. Thank you John, very helpful. I look forward to hear what the court decides.

    I really like low prices on the books I buy. I appreciate that Amazon manipulated things to bring me low prices. I appreciate how Apple brought some price correction to the high prices of the Music industry. I bet Apple agrees with Amazon’s pricing but needed an in. Regardless, shouldn’t the Justice department have sought Justice rather than pleasing consumers?

  6. John, This article presenting the legal aspects of the case by far for me is the most brilliant treatise you have ever put on word. I hope to see you write more about the legal aspects of tech and what not.

    Cheers! And Happy holidays to you mate!

  7. I truly believe that Judge Cote has near-zero understanding of the economic theory of noncompetitive markets and thus should not have presided over the case. In just the same way that you don’t ask an English major to grade papers on high energy physics, or physics majors to grade critical essays on Hamlet.

    As to the DoJ lawyers who thought “Yes! Let’s be the first antitrust lawyers in the history of US case law to reestablish a monopoly that had been successfully breached by a new entrant!” — My mind still boggles.

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