Justice Lawsuit Against Apple Likely to Fail

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Headlines have been full of the announcement for the Department of Justice’s antitrust suit against Apple and several book publishers this weekend.  A close look at what’s been revealed of the case, however, shows that the suit against Apple is pretty slim.

The lawsuit itself is over alleged price fixing for e-books.  The trouble is, price fixing is not an easy thing to prove, let alone when it involves multiple parties, some of whom aren’t really in the business of book selling and when the main target of the suit (in this case Apple) is more of a gateway for book sales than it is a price setter.

The Justice Department issued a 36-page complaint to the court, which began the suit, and in that complaint puts up a lot of evidence against the book publishers involved.  Little evidence, by comparison, is seen against Apple and a lot of that is by implication or assumption rather than by actual proof.

One of the most damning points is the documented meeting between executives at the book publishers involved.  A meeting which, CNET points out rightly, sourcing the document, didn’t involve Apple.

At issue here, according to Attorney General Eric Holder, is the discussion of the business model Apple proposed with its iBookstore offering.   Unlike Amazon’s setup, the iBookstore is more of a storefront for booksellers rather than a wholesale re-distribution operation.

Case law and precedent is with the publishers and Apple on this one, not with the DOJ.  Interestingly, this is an antitrust case against a relative newcomer to the e-book trade while Amazon, which holds almost 90% of the market, is left out of this suit.

It appears that the DOJ may have been a little over-zealous in this case.


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