The Justice Department versus Apple…
Thursday, April 26th, 2012Up to now, I’ve been confining my opinions on the lawsuit of the U.S. Justice Department versus Apple and the gang of five of the Big Six to my “News and Notices.” While I’m definitely biased about this and my blog is basically op-ed, I started out thinking that this case is small potatoes compared to some of the bigger issues of our day. Now I’m not so sure that the case is not a big, messy pommes de terre au gratin with lots of cheese where cleanup will be a challenge to any dishwasher, human or otherwise.
Let me elaborate on one compound word that is key here: price-fixing. I didn’t quite understand where the government was coming from, but now I see the issues better. Apple’s alleged behavior is ironically a 180-degree turn-around from their behavior with the music industry. Steve Jobs’ company allegedly undercut record companies’ prices and forever changed the music industry. What they allegedly offered to the Big Six publishers was a mechanism for the latter to avoid Amazon’s undercutting their prices—this is the agency model, where Apple agreed to sell eBooks at a publisher-determined price at their iStore as long as the publisher guaranteed that Amazon and every other online retailer couldn’t sell for less. Amazon could sell the publishers’ eBooks (so they’re available for Kindle) but they couldn’t sell them for less (thus indirectly favoring the Kindle).