In an amicus brief filed on December 2, a coalition of authors groups and booksellers urged the Supreme Court to overturn a lower court decision finding Apple liable for its role in a 2010 conspiracy to fix e-book prices. In the 37-page filing, the Authors Guild, Authors United (the group organized by Douglas Preston in 2014), the American Booksellers Association, and Barnes & Noble, argue that Apple’s entry into the market in fact benefited consumers.
“Absent correction,” the brief states, the lower court decisions against Apple “threaten to undermine the very objective of antitrust law—to ensure robust competition.”
The amicus brief comes in support of Apple’s petition this fall to have the Supreme Court review the case, after the Second Circuit Court of Appeals in June upheld Judge Denise Cote’s 2013 ruling finding the company liable for price-fixing. Apple attorneys argue that the lower courts erred in finding Apple liable for a “per se” case of price-fixing, rather than applying the more rigorous “rule of reason” standard, which, Apple contends, would exonerate their conduct.
“We are pleased to lend our support in this matter, critical to anyone interested in a competitive and diverse literary marketplace,” said Mary Rasenberger, executive director of the Authors Guild, in a statement. “We fundamentally question the wisdom of the Second Circuit’s use of antitrust law to punish a business arrangement that demonstrably increased competition in the e-book marketplace.”
In the brief, the Authors Guild seeks to bolster Apple’s argument, adding that that the outcome of the case is “critical to maintaining a healthy marketplace for the ideas and First Amendment-protected expression that authors and bookstores facilitate.”
Indeed, the brief argues that Amazon’s dominance, achieved through “a loss leader” strategy on new releases and bestsellers, was more than a disruptive force to authors and the book business, but was a threat to free speech.
“$9.99 is not a panacea for consumers or authors,” the Guild argues. “The Second Circuit’s panel majority ignored the positive impact Apple’s entry into the e-book market and the promotion of agency pricing had on ensuring the robust discourse that is vital to democracy."
The brief goes on to present to the court a bleak picture of the pre-Apple e-book days.
“With a 90% market share, nearly every customer who wanted to purchase an e-book had to do so through Amazon,” the brief states. “Amazon could exercise this power to suppress specific publishers, authors, or messages with which it disagreed, with impunity. It also could steer the culture toward the ideas it valued. Amazon controlled what e-books were promoted on its home page, what e-books were recommended to consumers, and what books appeared at the top of a consumer’s search results when she searched for e-books on the Amazon.com website."
And in a reference to Amazon's buy-button battles with Macmillan and Hachette, the brief notes that "Amazon could, and in fact did, cut off access to certain e-books, leaving many consumers with no practical way to purchase them."
The amicus brief is among the first filed in the Supreme Court case. The Department of Justice has yet to file a response in opposition to Apple’s petition the Supreme Court for review, and now has until January 4 to do so—although the DoJ declined comment on whether it intends to file an opposition brief at all.