The lawsuit against Apple by the Department of Justice is an astonishing maneuver made by an organization that is under criminal investigation itself. Yet even with all the scandals that it is currently being scrutinized for such as cover-ups, criminal deceit, and murder, the Department of Justice is engaged in an outright attack against the Apple Company for an e-book price-fixing anti-trust busting lawsuit. For a review on my thoughts about anti-trust cases created under the Sherman Act, please refer to the following link, where I break down the history and hypocrisy of these government cases revealing what is really behind them.
The federal government operates currently the largest monopoly on the face of the earth with their vast support of price-fixing through government labor unions. For examples of price-fixing that is much more destructive than anything Apple has done look no further than the local teacher at your government school, look at your friendly neighborhood IRS agent, or any bureaucrat working for the federal government in virtually any direct capacity. The government is not qualified to pass judgment against Apple for price-fixing. But in this case, as in most anti-trust cases, the intention is not to find justice for the “public” but to shake down the prosecuted for money through bribes, court settlements, or campaign donations to political parties. If the roots of this case were traced back to a cause, one of those three issues was the motivation. Because Apple did not grease the wheels of government “properly” they are now being prosecuted. It is that simple. For proof examine the statements below as reported by CNET regarding this anti-trust case, and read carefully the words used by Justice Department attorney Lawrence Buterman.
Apple shouldn’t “be rewarded” with the same sanctions as the e-book publishers that settled with the U.S. government, the Department of Justice argued ahead of a court hearing Friday. “Apple has been found to have orchestrated and facilitated a…price-fixing conspiracy — amongst these very publisher defendants,” Justice Department attorney Lawrence Buterman wrote in a letter dated Thursday but made available for viewing Friday. “Apple should not be rewarded with the same terms received by those that chose to settle to avoid the risks of litigation.”
The Justice Department last week issued its proposals for ways “to halt Apple’s anticompetitive conduct, restore lost competition, and prevent a recurrence of the illegal activities.” The three big pieces of that proposal were that Apple would end its existing agreements with the five major publishers, let other e-book publishers’ link to their own bookstores in iOS apps, and staff an antitrust monitor to evaluate its business for five years. Apple fired back last week, calling the government’s proposals vague, overreaching, unwarranted, and even “draconian.”
In a filing Wednesday, the five major book publishers weighed in, arguing that one of those stipulations — ending the existing agreements — would completely eliminate a pricing model that’s become the industry standard. The publishers also said it would break agreements the Justice Department made with each of them when they settled.
Hachette, HarperCollins, Holtzbrinck (also known as Macmillan), Penguin, and Simon & Schuster filed an opposition to last week’s proposed remedies against Apple by the Justice Department, arguing that the plan would “effectively eliminate the use of the agency model” for e-book distribution for the next five years.
“…Under the guise of punishing Apple, they effectively punish the Settling Defendants by prohibiting agreements with Apple using an agency model,” the publishers wrote, adding that the move “directly conflicts” with the settlements the publishers reached with the Justice Department before the Apple case went to trial.
“Despite achieving their stated goal of returning price competition, Plaintiffs now seek to improperly impose additional, unwarranted restrictions on the Settling Defendants, thereby depriving each publisher of the benefit of its bargain with Plaintiffs,” it goes on to say.
The “agency” model is where publishers set e-book prices to retailers, while retailers get a commission. That’s as opposed to the “wholesale” model, where publishers set the list price and the retailers can sell it at whatever price they want. (Read CNET’s in-depth explainer here.)
http://news.cnet.com/8301-13579_3-57597501-37/publishers-urge-doj-to-rethink-apple-e-book-remedies/
Basically what all that means is that the Department of Justice wants to shake down Apple because they did not settle out-of-court as the five major publishers did so to avoid a damaging public court case. The DOJ is using this excuse to inject its authority into the company for five years to monitor Apple business practices. The DOJ also intends to use this case “to halt Apple’s anticompetitive conduct, restore lost competition, and prevent a recurrence of the illegal activities.” Those are amazing statements by a government entity that is itself a functioning monopoly excessively guilty of anti-trust violations of their own. They are even more amazing statements considering all the other criminal investigations that the DOJ is currently under itself, but cannot be prosecuted for because there is no higher law enforcement authority than the Department of Justice—who works directly for the President of the United States. (This is why it’s important what kind of president Americans elect).
There is only one motivation by the Department of Justice in this. They do not care about the pricing of e-books on the open market. They only care about entrenching themselves into the publishing business any way they can so that content can be “influenced” in subtle ways. The message to the five major publishers couldn’t be clearer. They took the settlement like most companies would, to take the path of least resistance. It didn’t mean they were guilty, just that they took the option with the least immediate cost to them. The real crime is that the Department of Justice injected itself into the capitalist marketplace with socialist standards of regulation that do not belong in America. If not for Apple and those five major publishers, there wouldn’t be an e-book market. The DOJ is functioning from a socialist economic model whereas the publishers and Apple are operating from capitalism. Apple is not guilty of anything but operating as a capitalist enterprise. The DOJ is operating as a socialist enterprise. The difference between the two is one of philosophy, not function. The Department of Justice view of itself might be more appropriate in China, or in Europe where socialism and communism are practiced much to the restriction of ideas and financial enterprise, but they have no place in America and never had since the concoction of the Sherman Act so many years ago. The anti-trust busting that has been so publicly advocated by the government is simply the actions of a gang of thugs who want to shake down the profit makers of a capitalist economy under the guise of “equality.”
Every American should be outraged by the attack of the Department of Justice against the Apple Company. If it can happen to Apple, it can happen to everyone. Microsoft as a company never recovered after their anti-trust case in the 1990s. And now Apple, without the leadership of Steve Jobs to pull them back out of the mud after this incident with the DOJ will find themselves overly, and needlessly cautious toward anti-trust accusations that will directly hinder their marketing strategies, and innovation for many years to come. The cost of this lawsuit against Apple by the DOJ will resonate for the next century in America not in lost competition, but in lost innovation by a company that is among the best that America currently has to offer. The government, as usual, is standing in the way of prosperity, hindering capitalism, and openly seeking to undercut technological growth through a thuggish strategy of short-sighted shakedowns against a good company to appease a blind and stupid mob who democratically elected criminals, scumbags, and despots to enforce laws that they make up as they go to serve only themselves and an ever-expanding government.
Rich Hoffman
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The Overmanwarrior 