Apple has been grabbing a lot of headlines over the past couple of days, and not because of poor factory working conditions or the announcement of a new gadget. The Cupertino company is being sued by the Department of Justice over alleged eBook price-fixing.
The DOJ believes that Apple is acting in concert with several major publishers to raise eBook prices across the industry with its ‘agency’ pricing model. But there’s just one problem: experts don’t think the government has much of a case…
CNET is reporting that the Justice Department has a much better case against the book publishers than it does against Apple. It says that its legal pursuit of the iPad-makers for eBook price fixing stretches the boundaries of antitrust law.
“It’s a harder case against Apple than the publishers,” says Geoffrey Manne, who teaches antitrust law at the Lewis and Clark Law School in Oregon and runs the International Center for Law Economics. (See CNET’s list of related articles and an explanation of eBook economics)”
One reason lies in the Justice Department’s 36-page complaint, which recounts how publishers met over breakfast in a London hotel and dinners at Manhattan’s posh Picholine restaurant, which boasts a “Best of Award of Excellence” from Wine Spectator magazine. The key point is that Apple wasn’t present.”
There’s also the fact that Apple doesn’t enjoy the same dominance in the eBook space that it does in other areas. Amazon holds over 80% of the eBook market. It’s kind of hard to prove that a company is guilty of antitrust practices when it holds 10% of a market.
Perhaps this is the reason that Apple has chosen to stay and fight the lawsuit, rather than settle like some of the publishers. It’ll be interesting to see how it all plays out, but right now it’s looking like Tim Cook and company don’t have much to worry about.