Remember the amicus curae brief that the Authors Guild, Authors United and others filed in support of Apple as it tries to convince the Supreme Court to hear its appeal of the e-book antitrust decision? Law student Randy Morris has written an excellent analysis of that brief from an antitrust law perspective. It’s full of quotations and citations, so is a little hard to wade through in places, but it definitely shines some light on the case.

Morris begins by explaining that the argument over the “rule of reason” boils down to whether the price-fixing agreement among Apple and the five conspiring publishers was horizontal (between competitors at the same level) or vertical (between a supplier and its customer). Horizontal agreements are per se illegal—which is to say, any such agreement is automatically against the law and needs no further consideration. Vertical agreements have to be considered on their merits—a “rule of reason” analysis—so may be legal or may not.

Both the trial court and the appeals court decisions found that Apple was at the center of a “hub and spoke” conspiracy, which incorporates elements of both a horizontal (between the five conspiring publishers) and a vertical (between each publisher and Apple) conspiracy. The horizontal aspect of a hub and spoke conspiracy renders them per se illegal—but, as Morris points out, the amicus brief doesn’t even address this aspect of the case.

The amicus brief simply says that the rule of reason is considered the default standard for analyzing antitrust cases—which is true, but the brief doesn’t mention that the Supreme Court has said that horizontal price-fixing agreements among competitors are an exception to this, being per se illegal.

As for the rest of its arguments, Morris points out that the amicus brief cherry-picks partial quotes that sound nice, with plenty of rah-rah emotional appeal, but that don’t actually have any applicability to the case in their original contexts. When the Authors Guild talks about how debate on public issues should be wide-open, it leaves out the part of the quote that indicates this was specifically aimed at the right of citizens to speak out against the government and public officials.

Also puzzling is a quote from Judge Learned Hand about how “right conclusions are more likely to be gathered out of a multitude of tongues, than through any kind of authoritative selection.” Yet, it’s the big publishers who practice “authoritative selection” in publishing the vast minority of books that are submitted to them, whereas self-publishing via Amazon allows “a multitude of tongues” to make themselves heard.

Morris further notes:

The most amusing part of the AU’s 1st Amendment argument is as follows: “[f]ortunately, when Apple and others entered the e-book market, Amazon’s control over culture decreased. E-books not sold on Amazon were available elsewhere. E-books not marketed by Amazon were marketed elsewhere.” They’re actually arguing that:

1. Amazon was violating the public’s 1st Amendment right to be able to purchase e-books through multiple channels.

2. Apple’s illegal price-fixing scheme with the publishers corrected this 1st Amendment violation so their illegal agreements were ok.

I’m not even sure how to respond to that. It’s ridiculous. Apple wanted to enter the market making money and illegally forced the market to change to accommodate higher prices. They weren’t courageously protecting the public from a continued 1st Amendment violation.

It remains to be seen what the court will make of these arguments—or, indeed, if it will make anything of them at all. It will still be some time before we find out whether the Supreme Court will hear the case.

(Found via The Passive Voice.)


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