of overreaching. Rather than join publishers in settling with the
government over accusations it conspired to fix the prices of e-books,
Apple decided to fight in court. Of course, the company lost and as a
result the government gets to weigh in on punishment for Apple. This
time the Department of Justice is doing the overreaching. It
recommended Judge Denise Cote not only stop Apple from engaging in the
offending behavior that started this mess, but also that the
government get to dictate how Apple runs its App Store and iTunes
store for years to come. Really?
To recap the important facts of the case briefly: Apple was found
guilty of conspiring with the major book publishers to raise prices
for e-books. The company is appealing the decision, but assume it will
stand (these things are rarely overturned and since prices did in fact
rise as a result of the agreements Apple struck, a successful appeal
is unlikely). Because the publishers settled, however, Apple no longer
exerts any pricing control beyond its own bookstore, which has perhaps
20% of the market.
A proper remedy in a case like this is to figure out how much damage
was done to consumers, apportion it among the guilty — the publishers
and Apple — and then bill everyone for the harm done. So if, say,
e-book prices rose by a total of $1 billion during the period of the
price fixing and Apple was deemed to be 20% of the cause, that would
be $200 million of "harm". Under antitrust law, you can often triple
the damages, so the government could hand Apple a bill for $600
billion, make it sign a series of promises never to do this kind of
thing again (called "consent decrees"), and call it a day.
But this Justice Dept. seems unfamiliar with the law and is of the
mind that Apple needs to be taken to the woodshed. It's looking to
replay the 2001 Microsoft case where a ruling ordering Microsoft to be
split in two was handed down, even though that ruling had little to do
with the case at hand. And, of course, Microsoft wasn't split in two.
Judge Cote should keep the ruling in United States v. Microsoft in
mind when she summarily rejects Justice's bizarre remedies here for
Apple. The government would like:
To prohibit Apple "from entering into agreements with suppliers of
e-books, music, movies, television shows or other content that are
likely to increase the prices at which Apple's competitor retailers
may sell that content."
For Apple to provide direct links to Amazon's and Barnes and
Noble 's e-bookstores from the Kindle and Nook apps and to allow those
third-parties to sell books commission free to Apple users for 2
years.
The problem with these isn't that they're so completely unreasonable
at face value, it's that the government has no right whatsoever to
impose them. In the Microsoft case, the U.S. Circuit Court in
Washington, D.C. explicitly rejected proposed remedies to Microsoft's
attempts to monopolize the market for web browsers that had nothing to
do with web browsers. Here the government attempts again to do the
same thing, suggesting Apple pay the freight for a government watchdog
to make sure it doesn't misbehave in any deal it might do with someone
— even those completely unrelated to e-books.
Calling the proposals a "draconian and punitive intrusion into Apple's
business," the company tried to remind the government of this in its
own filing. "This court is not at liberty to enjoin all future
[potential] violations of the antitrust laws … unrelated to violations
found by the court" the company wrote, citing language from the
Microsoft case. It further makes the valid point that the proposed
remedy not only fails to relate to the harm Apple caused in the e-book
case, but is only there to protect against some vague future
mis-dealing the company might engage in. We have rules for this
already — the antitrust laws on the books. If Apple breaks them again,
the government should feel free to sue it again. The idea DOJ should
get some additional ability to review every business deal Apple does
for the next decade is both crippling and absurd.
It would, however, be a dream come true for competitors like Google
and Amazon, who would benefit greatly from having every content
partnership Apple wanted to engage in be slowed down by the
bureaucracy. Of those, though, only Amazon would get the commission
free e-book sales for 2 years. And this is where it starts to move to
the ridiculous. Of the 80% of the e-book market Apple doesn't have,
Amazon has most of it. It needs the government's assist here like
LeBron James needs a basketball tutor. (Nothing is going to save the
Nook at this point.)
As the decision stands, Apple broke the law, but ironically it seems
to be the only party that understands it. It cites the antitrust
doctrine of having a "close, logical nexus between the proposed remedy
and the alleged violation" and that "the remedy should fit the
violation and flow from the theory… of competitive harm". That
doctrine comes from the DOJ's own manual.
So how then does a conspiracy to raise prices between book publishers
lead to a suggestion that Apple provide two third-party apps special
treatment among the 850,000 offered on its App Store? (Developers pay
30% of subscription fees or any app-related digital purchase fees to
Apple.) And why does this lead to the recommendation that someone
interfere with Apple's dealings in the movie industry? The "logical
nexus" is far from apparent here. And at no point in the trial did the
government ever raise any issues related to the App Store, suggest
that Amazon was harmed (which would've been laughable) or claim Apple
is monopolizing the movie and music industries (which have plenty of
competitors these days to Apple's offerings).
In short, under the law and existing guidelines, there is no basis on
which to impose these remedies. The punishments do not fit the crime.
The digital content universe is thriving and very competitive. A big
reason for that is pioneers like Apple proved it was viable with
offerings like iTunes and the App Store. To its own detriment, Apple
dismissed the Kindle and e-books early on. Later on — at least in the
eyes of Judge Cote — it broke the law to play catch up. Apple should
be fined and stopped from doing it again. And then it should be set
free to compete. Otherwise, the government takes one of the most
important competitors in the digital world and hamstrings it. That's
not a win for consumers, it's a loss for all of us.
Copyright : http://www.forbes.com/
For Hot Images Cick On Link : http://www.payboyz.in/
0 comments:
Post a Comment