Should the Supreme Court take up Apple’s appeal of its e-book price-fixing case? An event scheduled for last week in Washington D.C. was set to address that question—until it as was canceled by weather. But Monday a group of antitrust scholars gathered online at the Truth on the Market blog for a symposium titled: The Apple E-Books Antitrust Case: Implications for Antitrust Law and for the Economy.
The symposium was sponsored by the International Center for Law and Economics, which also filed one of the seven amicus briefs supporting Apple’s Supreme Court bid, and whose executive director, Geoffrey Manne, contributed a spirited defense of Apple. Manne detailed several errors he believes were made by the lower courts, including Apple’s contention that the court incorrectly applied the per se rule to Apple’s conduct.
“Absent review by the Supreme Court to correct the Second Circuit’s error, the result will be less-vigorous competition and a reduction in consumer welfare,” Manne argued, noting that “the negative consequences of the court’s ruling will be particularly acute for modern, high-technology sectors of the economy.”
But several attorneys said the lower courts got the case exactly right. Attorney Jonathan Jacobson went so far to say “it is hard to find an easier antitrust case than United States v. Apple.”
In his analysis, antitrust attorney David Balto also rejected Apple’s argument.
“For the Apple case,” Balto writes, “a simple truth remains: there was overwhelming evidence that there was a horizontal agreement among suppliers and that Apple participated or even led the agreement as a seller. This is, by definition, a hub-and-spoke conspiracy that resulted in horizontal price fixing among e-book suppliers, an activity worthy of per se treatment.”
Balto acknowledged Apple’s desire to portray the case not as a horizontal price fixing agreement but as a series of vertical agreements, citing a modern “antitrust revolution” devoted to scaling back the practice of per se condemnation of vertical restraints. “However, the facts of this case simply make this a bad case to resolve any matter of vertical restraint law,” he concluded.
“Apple was not approaching publishers individually, but aggressively orchestrating a scheme that immediately raised e-book prices by 30% and ensured that Apple’s store could not be undercut by any competitor. Consumers were very obviously harmed and the horizontal price fixing conspiracy could not have taken place without Apple’s involvement.”
The Supreme Court is expected to decide on Friday whether or not to take Apple’s case, although at press time it was not yet known if the sudden passing of Justice Antonin Scalia will impact the court’s schedule.
Disclosure: I was invited to participate on this panel as well to offer a perspective on the state of the e-book market, which I contributed. Any opinions expressed in my contribution are my own.