Home » Apple, Big Publishing, Legal Stuff » Apple, E-Books And The DOJ: Even If You’re Right You’re Wrong

Apple, E-Books And The DOJ: Even If You’re Right You’re Wrong

11 April 2012

From Seeking Alpha:

Apple and its publishing partners, including units of CBS and News Corp., seem ready to go to the mattresses against the Justice Department’s antitrust unit, which seems ready to sue them over fixing the price of eBooks.

. . . .

This may be the dumbest move Tim Cook has made yet, and the merits of his case have nothing to do with it.

Simply put, having Justice Department lawyers around is bad for any company. Especially antitrust lawyers. Especially tech companies. That’s due to the peculiarities of the antitrust law – actions that seem perfectly natural in any other context take on a whole new meaning when you’re seen as trying to create, or enforce, monopoly rents.

The result is that stuff has to be saved, things have to be remembered and (more important) hands have to be stayed before they do many normal business activities.

Every tech company the Justice Department has ever gone after – IBM, the former AT&T, and (most especially) Microsoft can attest to this fact. All were transformed and grievously damaged by their antitrust cases.

. . . .

Philip Elmer-Dewitt of Fortune notes that Apple has plenty of cash to fight this. That’s not the issue. The issue is what happens when lawyers go into other departments, into operating departments, and when any agreement comes into force.

You may say, well Microsoft fought the law and won. But it took 15 years. And what happened to the company in the meantime? It lost its lead in technology, because its people weren’t allowed to think different, they had lawyers and product managers and outsiders around them all the time saying “no” to things. It becomes a form of self-censorship, which runs completely counter to the creative process. And it drives good people out the door.

Link to the rest at Seeking Alpha

Apple, Big Publishing, Legal Stuff

17 Comments to “Apple, E-Books And The DOJ: Even If You’re Right You’re Wrong”

  1. It’s going to be fascinating to see how Apple’s internal culture handles the DOJ. I can’t say I think things will mesh well at all.

  2. My thought on hearing that Apple and Macmillan were resisting any settlement: the arrogant and the stupid.

  3. I just have to comment about IBM, AT&T and Microsoft: they were all transformed and grievously damaged because they were all guilty. They all grievously harmed their customers.

    Microsoft lost its lead because they hadn’t been technologically competitive in many years, and only kept growing and prospering because of their monopoly rents and other criminal behaviour. They only won the lawsuit because the original judge (very suspiciously for such an experienced and senior judge) disqualified himself and the judge that replaced him ignored all the evidence and handed them a slap on the wrist.

  4. “go to the mattresses” ?

    • Mafia talk for getting ready for a big fight. I believe it originated when the Mafia folks went to safe houses where they would be difficult for opponents to locate. Some rooms in the safe houses were mostly filled with mattresses on the floor.

      I’m dealing with an old memory on this, so I’m happy to be corrected by those who know more about this than I do.

      • I have never heard “going to the mattress” in my life, “going to the mat” yes. “mattress[es]” no. Of course I’m a lifelong southwesterner and never had the slightest interest in mob movies, so maybe I’m just out of the loop here. Seems odd there would be two similar expressions like that, and he seems to be using it in a way that the wrestling/”going to the mat” meaning would make more sense.

        Edit-to-add:
        I always had the sense that the “going to the mat” expression implied not giving up even when down, fight to the bitter end type of thing, rather than “let’s go hash this out in the ring”

      • I think it’s a term Mario Puzo came up with in THE GODFATHER, meaning just what you said, PG.

  5. My instinct (I might be wrong) is that the eu is about to go to court very soon too. I wonder how long agency pricing can continue in light of the settlements.

  6. It looks even more like a fight not worth fighting when three of the publishers have already agreed to abandon the Agency model as part of a settlement.

    http://www.broadcastingcable.com/article/483007-HarperCollins_Simon_Schuster_Settle_With_DOJ_Over_E_Book_Pricing.php

  7. I can definitely see how having the DOJ breathing down their necks could tear down Apple’s carefully developed creativity. Will this lawsuit spell the fall of Apple?

    What would Jobs do? Oh, wait…

  8. What’s interesting is that Apple has picked this case to fight with the DOJ. They settled with the DOJ not that long ago in the case where they had a no-poaching agreement with Google, Adobe, and others.

  9. I’m terribly interested to know why Apple is bothering to fight this, when it seems they have hardly any interest in ebooks at all, save to Have Something Of Their Own so they’re not entirely beholden to other companies for a tablet functionality.

    They could easily move to an iTunes-like tiered price structure, based on word-count; .99 to 9.99, and you can pick [your word-count tier]‘s price or lower. Problem solved, and without having to muck around with wholesale stuff!

    I wonder if Cook believes a No Agency result could threaten the way that they sell apps on the App Store?

    • I would think it’s because the iTunes model doesn’t work when other stores choose to discount. Apple does not change prices of products sold in their app stores, so if other retailers can change prices it leaves them at a disadvantage.

      Heaven forbid that Apple would need to adapt to fit the marketplace rather than have the marketplace adapt to fit them.

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