DOJ’s Latest on Apple Investigation
From the WSJ:
Publishers argue that the agency model promotes competition by allowing more booksellers to thrive. They say Amazon had sold e-books below cost and that agency pricing saved book publishers from the fate suffered by record companies.
But the Justice Department believes it has a strong case that Apple and the five publishers colluded to raise the price of e-books, people familiar with the matter say.
Apple and the publishers deny that.
The Justice Department isn’t taking aim at agency pricing itself. The department objects to, people familiar with the case say, coordination among companies that simultaneously decided to change their pricing policies.
“We don’t pick business models—that’s not our job,” Ms. Pozen says, without mentioning the case explicitly. “But when you see collusive behavior at the highest levels of companies, you know something’s wrong. And you’ve got to do something about it.”
For related posts, see here. The case increasingly appears to focus on whether the DOJ can prove coordination among rivals with respect to the shift to the agency model and e-book prices.
Filed under: antitrust, cartels, contracts, doj, e-books, economics, error costs, law and economics, litigation, MFNs, monopolization, resale price maintenance, technology, vertical restraints Tagged: agency model, Amazon, antitrust, Apple, doj, e-books, iBookstore, major publishers, MFN, most favored nations clause, per se, price-fixing, publishing industry, Rule of reason, vertical restraints