United States v. Apple and the Contemporary Legitimacy of Antitrust

Chris Sagers, Jun 13, 2012

I think United States v. Apple, the so-called “e-Books case” pending in the Southern District of New York, is an excellent case for the government (the Department of Justice’s Antitrust Division “DOJ”), put together by an exceptional team of government enforcers, and I think the defendants that remain in the case are likely to lose if they proceed to judgment. The complaint has been the talk of the blogosphere, surprising observers with the extent of its damning, meticulous factual detail and amazing them that defendants’ executives could have thought what they were doing was legal.

The hub-and-spoke conspiracy the case describes, if proven, is pretty obviously per se illegal under Supreme Court precedent and a celebrated Seventh Circuit case. And even if it weren’t, the underlying economic story has intuitive appeal: A major retailer entrant agrees with a manufacturing oligopoly, in exchange for a share of the spoils, to assist in coercion of the incumbent retailer, which got its dominant position through price-cutting. Motive, opportunity, plausibility. It was a conspiracy against the public, of a kind going to the core concerns of antitrust, and as a matter of legal doctrine it seems pretty simple.

So here’s my big question: Why does everybody seem to hate this case?

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