Apple aced its e-book antitrust appeal

Apple's e-book appeal began today, asking the courts to overturn a 2013 antitrust verdict. Here are three articles I found interesting: 1- Apple aced its e-book antitrust appeal by Philip Elmer-DeWitt, Fortune:

My colleague Roger Parloff, who has seen more than his share of appellate hearings, was surprised how well this one went for Apple.

"Judges Jacobs and Lohier seemed quite concerned that Judge Cote had used the wrong [legal] 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."

Note: The court's decision could take up to six months.

 

2 - Apple, E-Books and the Amazon Juggernaut by Daniel A. Crane, Associate Dean, Faculty & Research, University of Michigan Law (posted on Recode)

First, although the point of a price-fixing conspiracy is generally to increase prices, there is compelling evidence that the shift from a wholesale to an agency model resulted in a decrease in the average prices of e-books. While the prices of premium books that Amazon had previously been selling below cost increased, Apple and B&N’s entry facilitated the vast expansion of the e-book market, including the availability of many new low-cost books. The net effect for consumers was an expansion of choice and variety at lower average prices.

Second, it would be misguided to judge the competitive effects of Apple’s behavior solely based on e-book prices. Amazon was strategically using low, and arguably anticompetitive, e-book prices to entrench the entire Kindle ecosystem. Market entry by new competitive ecosystems like the iPad/iBookstore required disruption of Amazon’s prevailing business model. Consumers undoubtedly benefited immensely from the introduction of the Nook and iPad and their associated online bookstores.

 

3 - Apple Should Win Its E-Book Appeal, an op ed by George Priest, antitrust law professor at Yale Law School (post behind paywall on The Wall Street Journal)

What Apple and the major booksellers did to get a foothold in a market dominated by Amazon was not restraint of trade. It was competition, and progress.