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Wednesday, July 10, 2013

Apple Found Guilty of Price Fixing

Joshua Gans with "initial thoughts":

Apple found guilty of price fixing: Initial thoughts, by Joshua Gans: Apple have been found guilty of price fixing in the US. Judge Cote found that Apple and five publishers had conspired to raise the price of eBooks. Basically, Apple used the iPad launch to “solve” the publisher’s problem with Amazon’s $9.99 retail pricing by assisting and, perhaps, insisting, that they engage in a coordinated move to an agency model with a most-favoured nation clause that would prevent retail price competition against Apple’s new iBookstore. The case was unusual because Apple was, in fact, a new entrant into a retail space with a dominant incumbent player, Amazon. But it was the way they entered that Judge Cote took issue with.
I have to admit that I was sceptical the DOJ would be able to amass the evidence to find price fixing in this case. From the judgment, even without the presence of Steve Jobs, there was enough. Is it believable that Apple knew and understood how it was helping the publishers here? Absolutely. I just wondered about satisfying a burden of proof without a key conspirator being able to be cross-examined. ...
This judgment is very interesting. ...

He goes on to describe it in detail.

    Posted by on Wednesday, July 10, 2013 at 09:09 AM in Economics, Regulation | Permalink  Comments (7)


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