Judge agrees that Apple was complicit in fixing price of e-books | Hacker News Reader

Judge agrees that Apple was complicit in fixing price of e-books

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34 pointsjamesbritt23 comments

Regardless of whether or not her opinion turns out to be unwavering/correct, I find it crazy that a judge would expose her bias before the trial starts. Is this common?

This is not bias, the judge has seen a lot of filings at this point, and is giving a preliminary view of what he thinks is likely to happen here.

Basically, what's the judge is really saying is "Apple, you should settle this, because from what I see, it isn't going to go that well for you".

This happens all the time in both civil and criminal courts.

It's not a jury trial so the judge is going to be the one making the decision in the end. She's see the evidence and she's expressing her advance opinion. It's not binding and it gives a steer to the involved parties thereby probably reducing overall trial time and costs.

I'm not sure why you see this as the judge expressing their personal opinion or bias. They're giving a tentative judgement of the outcome of the case.

Her 'bias' is based on the evidence already submitted in pre-trial and only shows that she's leaning one way not that her mind is completely made up. A bit unusual to say it out loud but anybody would form an opinion after reading the DOJ's side of the argument.

I don't believe that they are required to recuse themselves[1], but if there was a bias, it probably makes an appeal easier.

[1] A good example was when Jack Thompson (personally) sued one of the judges that was hearing a case he had. The judge was not required to recuse himself, even with the possible conflict of interest, because this would effectively allow someone to 'choose a new judge' by suing the judge they didn't like.

"Bias" implies the judge was inclined to rule against Apple before ever hearing any evidence.

It depends what the procedural background is. For example, if there is a motion for a preliminary injunction, then the judge has to decide whether one side has a high chance of winning the case.

The article did mention that it was "unusual". I find it to be unprofessional. It seems justices like to express their personal opinions on big tech cases; perhaps it's a move for free publicity?

Either way, it doesn't sit right with me.

It wasn't a "personal opinion." It was a pre-trial opinion ("opinion" in the formal sense of a judicial decision) on the case. A judge will issue something like this during a bench trial (trial in front of a judge rather than a jury) basically as a way of telling the parties: "based on the evidence I've seen so far I'm leaning towards ruling this way." It's a way of giving the parties an idea of which way the wind is blowing to guide settlement discussions before trial.

This happens all the time in civil courts, and in criminal courts in the pre-trial stages (i.e., evidentiary hearings and other pre-trial matters). The judge's actions were unusual only because the article was written by an Apple blogger with no legal background.

The article does state it's an unusual move.

The article is wrong. It happens all the time, and is perfectly normal.

First, let's get over the idea that any talking about a view before the trial is wrong.

They have submitted mountains of evidence. The judge already knows what the experts are going to say on both sides, etc.

The judge has to have an opinion on how the case will turn out to rule on various motions.

It's perfectly normal for a judge to say "After reading these motions, and the evidence, here is my view ...". This tends to encourage parties to settle, rather than continue to waste the courts time.

To put it simply: Having an opinion based on the evidence and law so far is not bias. Sharing that opinion with the parties is not bias.

If the judge knew nothing, walked in, the lawyers walked in for the first time, and he said "good morning, i think apple's guilty", yeah, that's a problem.

Here, it's closer to: The judge and his clerks read many thousands of pages of evidence and documents. The judge gave them an opinion as to what he thought would happen if it goes to trial.

That may be the best possible answer I could possibly have imagined.

Take a look at Bob Kohn's hilarious amicus brief for an idea of just how bad this could go for the DoJ:

http://www.scribd.com/doc/104906877/Kohn-Amicus

Apple will probably lose the district court case, but that has as much to do with geography and Judge Cote as it does with actual law. When they appeal to the Supreme Court, which they will, they will get the trial they wanted—a trial on whether Amazon, not Apple, committed antitrust violations by selling e-books below marginal cost in order to capture the market.

(To be clear, Apple's legal strategy should not be asking the DoJ whether it thinks Amazon practiced predatory pricing. Amazon certainly did, but the DoJ can always say, "No.")

"When they appeal to the Supreme Court, which they will" SCOTUS is unlikely to take it, unless the normal appeal is very strange, which is unlikely. Even the microsoft antitrust case never was heard by SCOTUS. The appeals court is also pretty unlikely to care about what Amazon did, only what Apple did.

I think you completely misunderstand what is going to happen here. You don't get to commit an antitrust violation to try to save people from someone else's.

So if the trial they want is whether Amazon committed antitrust violations, they are idiots. They should file that lawsuit themselves.

The trial here, despite what Apple wants, is whether Apple committed antitrust violations. The answer to that is pretty clearly yes, based on the emails i've seen.

>I think you completely misunderstand what is going to happen here. You don't get to commit an antitrust violation to try to save people from someone else's.

You do if the DoJ's guidelines say you do, which is Bob Kohn's whole point.

(The Sherman Act makes the DoJ's guidelines the law. Or at least, a finding that Amazon merely practiced "predatory pricing," a low bar, would give Apple estoppel against the DoJ in this complaint.)

1. The DOJ guidelines do not have the force of law.

2. The Sherman act says nothing about the DOJ guidelines, actually, and it certainly doesn't make them law.

Here is the Sherman act: http://www.law.cornell.edu/uscode/text/15/1

Only sections 1 through 7 are the Sherman act.

The Sherman act is a very simple act, and nothing in it say anything about the DOJ. Feel free to point out otherwise.

Maybe you want to try to argue the various Supreme Court decisions interpreting the Sherman act say something about the DOJ. AFAIK, they don't.

The DOJ guidelines are simply used as guideposts for companies to understand how the DOJ is likely to view a proposed act. That's it. The DOJ doesn't have to follow them.

It even says this in the guidelines:

  "By stating their general policy, the Agencies hope to   
  assist those who need to predict whether the Agencies will 
  challenge a practice as anticompetitive. However, these 
  Guidelines cannot remove judgment and discretion in 
  antitrust law enforcement."

3. A finding about Amazon will be completely irrelevant to Apple's conduct in this case. The question is whether Apple committed horizontal price fixing. Amazon's possibly illegal conduct is going to be completely irrelevant in that, as horizontal price fixing is still per-se illegal. They could prove Amazon hurt the market a lot. They could prove whatever they like. As long as the DOJ proves they committed horizontal price fixing, it's game over. Now, the supreme court may, in the end, decide horizontal price fixing should be analyzed under the rule of reason instead of being a per-se violation, but that's completely irrelevant to the current state of the law, and in fact, Apple's behavior. SCOTUS is not going to change the doctrine because they think Apple did the right thing here, they will change doctrine because they think the doctrine was wrong in general. However, that doctrine is the current state of the law, and what this case, and the appeal, will be analyzed under.

4. Bob Kohn is a guy who made his living off running companies dedicated to digital revenue for books. He has a huge stake in this game, and in fact, has unsuccessfully objected to every settlement that doesn't agree with his theories. You should be very wary of his legal viewpoint. It's like listening to Florian Mueller talk about Microsoft or Oracle. The only difference is that Bob Kohn has been rebuked directly no his theories by judges a large number of times now, whereas Florian has just been wrong without having the pleasure of Judges directly address his craziness.

When they appeal to the Supreme Court, which they will, they will get the trial they wanted—a trial on whether Amazon, not Apple, committed antitrust violations by selling e-books below marginal cost in order to capture the market.

Thats just all kinds of ".. what?". I don't think you can appeal to the supreme court on the issue of Amazon having comitted a crime in your very own federal trial. That simply does not compute.

Not sure that running at a loss in order to develop a market is illegal otherwise every loss leading promotion in history would be illegal.

Once you have a monopoly position, of course, then it is different.

What is the marginal cost of a digital good? The cost to download it one more time? It seems like the marginal cost to produce one more copy of an existing digital good is close to zero.

Books and music and other similar works certainly have a large fixed cost to produce: the opportunity cost of the creator's time; the technology or equipment involved. The producer might choose to market the work, which incurs further cost (but it's not marginal). However, once the work is created, can it really be said to have a marginal cost beyond the cost of digital distribution?

There is a marginal cost to Amazon. They're paying the publishers a certain amount for every copy sold. And if they're selling a copy for less than they bought it for, they are selling it below the marginal cost.

In this particular case, the marginal cost for Amazon or Apple would be the per-sale licensing fee paid to the publisher. This is a cost set by the publishers, for sure, but it most definitely is a marginal cost in the eyes of the electronic distributor.

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