Distribution, Competition, and Antitrust / IP Law

Court Refuses to Dismiss Antitrust Claims in Apple E-Book Case

I previously covered the allegations in the Apple E-Book case here.

Today (May 15), the Southern District of New York (Cote, J.) refused to dismiss the class plaintiffs’ antitrust claims against Apple and the e-book sellers.  See In re: Electronic Books Antitrust Litigation, Case No. 11-MD-2293 (DLC).  In doing so, the court indicated that the plaintiffs’ claims are subject to a per se analysis and not a Rule of Reason treatment. 

The court viewed the alleged conspiracy as fundamentally horizontal in nature, with Apple sitting at the “hub” of a hub and spoke conspiracy. 

Other notable aspects of the decision include:

  1. The court’s determination that the plaintiffs had sufficiently alleged direct evidence of a conspiracy.
  2. The court’s refusal to weigh competing evidence as to whether alternative, non-conspiratorial explanations account for the defendants’ conduct.  If the conspiracy claim is plausible, the court held, it cannot be dismissed.
  3. The court’s relative uninterest in the specific “motivations” of the various defendants.  The complaint plausibly alleged that each defendant (including Apple) shared the basic “twin purposes of raising the price of eBooks and eliminating retail competition even though their motives for joining the conspiracy were different.”
  4. The court’s ruling that even though the alleged agreements did not render all eBook pricing uniform, they were subject to antitrust challenge because the plaintiffs had alleged that the defendants “conspired to eliminate retail price competition and to raise the price of eBooks above the $9.99 price set by Amazon.” (emphasis in original).

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About Howard Ullman

Antitrust, competition, and IP law enthusiast.

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