Apple Faces Uphill Fight in Ebook Price-Fixing Trial

By Wayne Rash  |  Posted 2013-06-04 Print this article Print

This means that not only won't Apple won't get any help from them, but the company will have to sit quietly while its alleged co-conspirators testify for the government.

The government's case appears to be very strong, and Apple's efforts to have the evidence thrown out because of Jobs' death seem doomed to fail. This means that Apple will have to proceed on the merits of its case, which is claiming that the whole price-fixing scheme to raise ebook prices by approximately $3 to $5 was all the publishers' idea and that Apple had nothing to do with it.

Unfortunately, it seems clear from the evidence that the government is presenting that Apple had contact with the publishers and did discuss pricing. In addition, it's clear that Apple discussed Amazon's pricing with the publishers, and it's clear that Jobs himself was in communication with those publishers about pricing. What Apple isn't talking about is that antitrust law is very clear on what constitutes illegal price-fixing, and all it takes is the discussion of prices among the parties involved.

It seems likely that Apple is willing to bear the expense of the trial and even a long, drawn-out appeal process in hopes that it can outlast the government and get a better deal on potential penalties and fines than if it quickly came to terms with the Justice Department without a trial.

After all, the company has billions in cash lying around doing nothing but earning interest and dividends. But it's also worth noting that many of the defendants in big antitrust cases, and especially in price-fixing cases, are also large corporations. But Apple's stubbornness is still surprising, given that the history of price-fixing litigation shows that the government almost always wins.

There are reasons the government wins, the biggest of which is that the DOJ doesn't go to trial unless it's virtually certain that it will win. Other price-fixing cases usually go to a negotiated settlement. In this case, the judge has already urged Apple to settle, and she has said that she believes the government will prevail. Apple is pinning its hopes on some tenuous ideas that run contrary to the law and the practice of the courts.

Apple has made a number of statements about the government's case that seem to speak more toward the company's arrogance than about legal realities. This is no surprise since arrogance has been Apple's hallmark for years.

Unfortunately, such arrogance is not going to convince the Justice Department or the court that Apple is innocent. The DOJ quite simply eats arrogance for lunch. Apple can spend a lot of money, complain loudly and make outrageous statements, and proclaim its innocence. But the communications of its executives are all that the court needs.


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