But the pro-Apple (AAPL) amici curiae brief filed Wednesday by two economists lays out clearly -- more clearly perhaps than Apple's own trial lawyers -- the economic and legal issues the company tried and failed to get across to Judge Denise Cote last June. (See The view from the hard benches.)
The document submitted by CalTech's Bradford Cornell and NYU's Janusz Ordover fills more than 30 pages, but the heart of their argument is laid out in a three-paragraph summary:
Efficient markets depend on firms acting in their independent business interests. In this case, the District Court's failure to consider the economics of the vertical agreements between Apple and the Publisher Defendants led it to infer that Apple facilitated and participated in a horizontal price-fixing conspiracy. The District Court never considered evidence and economic reasoning that the vertical agreements were in Apple's independent business interest in entering e-book retailing, wholly apart from any horizontal conspiracy.
The provisions of the agreements at issue—agency, 'most-favored-nation' (MFN) clauses, and price caps—can be instrumental in facilitating new entry, particularly into markets with an entrenched, dominant firm. In this case, the District Court disregarded economic evidence and reasoning that these provisions served Apple's independent business interest in entering the e-book market, where Amazon was a near-monopolist. The District Court also ignored economic evidence and reasoning suggesting that Apple's entry into e-book retailing, and not the MFNs, allowed the Publisher Defendants to persuade Amazon to switch from a wholesale to an agency business model.
The District Court also erred in equating price increases for some e-books with harm to competition. Apple's entry into the e-book retail market dramatically increased competition by diminishing Amazon's power as a retail monopolist (and its ability to pursue a "loss-leader" strategy that inefficiently priced e-books below their acquisition cost). That increased competition gave publishers more bargaining power, thereby bringing ebook pricing closer to competitive levels. These errors threaten to chill competition by discouraging the use of common vertical contracting techniques that are often essential to facilitating the expensive and risky investments needed for entry into highly concentrated markets. Our antitrust laws should encourage, not penalize, vertical contracting arrangements that facilitate entry and enhance competition.
Apple appealed Judge Cote's ruling two weeks ago. A DOJ spokesperson said it would file its brief in May.
LINK: Economist Amicus Brief
Judge Cote's ruling, Apple says, mistook an "aikido move" for an antitrust conspiracy.
FORTUNE --Apple (AAPL) pulled no punches in the 65-page brief it filed Tuesday, asking a higher court to overturn the controversial results of last year's e-book antitrust trial and placing blame for the outcome squarely on the shoulders of the judge who heard the case.
In Apple's view, U.S. District Judge Denise Cote was not only wrong about the law MOREPhilip Elmer-DeWitt - Feb 26, 2014 8:07 AM ET
News Corp's Wall Street Journal calls for Judge Denise Cote to be taken off the case.
FORTUNE -- Most of arguments the Wall Street Journal made Friday in a strident editorial calling for the ouster of the judge in the e-book antitrust case were taken from a motion Apple (AAPL) filed last week. (See Apple to judge: You and your antitrust monitor are way out of line.)
But there was also a nugget MOREPhilip Elmer-DeWitt - Dec 6, 2013 8:12 AM ET
Judge Cote makes short work of Apple's list of nine evidentiary "errors."
FORTUNE -- This may be too deep in the weeds for anyone who hasn't been following the Apple (AAPL) e-book antitrust case as closely as I have.
But I was curious how Judge Denise Cote would deal with nine evidentiary issues Apple says it will raise in its appeal of her ruling last month (pdf here) that the company was MOREPhilip Elmer-DeWitt - Aug 15, 2013 8:46 AM ET
Judging from Judge Cote's past performance, the odds are in Amazon's favor.
FORTUNE -- In another context -- or another courthouse -- the remedies the Justice Department and 33 states proposed Friday to address what they call Apple's (AAPL) "illegal conduct" in the e-book market might seem like an unreasonable intrusion by a government agency into a private company's business practices.
Among other things, the DOJ is demanding that Apple let Amazon MOREPhilip Elmer-DeWitt - Aug 2, 2013 1:05 PM ET
I thought the judge was coming around to Apple's point of view. I was wrong.
FORTUNE -- The benches were hard. The courtroom was over-cooled. The reporting challenges were daunting (no Wi-Fi, no cellphones, no laptops). But the drama that unfolded over three weeks of testimony was compelling, and I was happy to be one of a handful of reporters who sat through the whole thing.
I thought I had a good handle MOREPhilip Elmer-DeWitt - Jul 11, 2013 8:28 AM ET
Apple's appeal of the trial judge's verdict will hinge on the last 38 pages of her decision.
FORTUNE -- The first 122 pages of the 160-page ruling against Apple (AAPL) that U.S. District Judge Denise Cote handed down on Wednesday could have been written before the trial began.
In fact, most of them probably were.
Judge Cote was familiar with the case from having supervised the proceedings by which the five so-called Publisher MOREPhilip Elmer-DeWitt - Jul 10, 2013 1:30 PM ET
Judge: "Apple seized the moment and brilliantly played its hand."
FORTUNE -- In a 160-page ruling following a three-week bench trial, U.S. District Judge Denise Cote has found that Apple (AAPL) did indeed violate the Sherman antitrust act by conspiring with five publishers to raise the price of e-books.
The key paragraph:
"The Plaintiffs have shown that the Publisher Defendants conspired with each other to eliminate retail price competition in order to raise MOREPhilip Elmer-DeWitt - Jul 10, 2013 10:06 AM ET
What do the patterns in Judge Cote's queries tell us about where the case is headed?
FORTUNE -- Veteran court watchers will tell you that it's dangerous to read too much into the questions judges ask during closing arguments in a trial. Some are probing, some are rhetorical, and in some cases the judge may be playing devil's advocate, seeming to take positions he or she doesn't actually hold.
Still, in a MOREPhilip Elmer-DeWitt - Jun 23, 2013 12:55 PM ET
Questioned repeatedly by the judge, does not dispute that they engaged in a conspiracy.
FORTUNE -- "I have no opinion."
That was Orin Snyder's first reply after U.S. District Judge Denise Cote questioned him early in his closing arguments in U.S.A. v. Apple, the antitrust case the Department of Justice filed against Apple (AAPL) and five publishers in April 2012.
We'll deal with what Apple's lead counsel said in his summation after we've heard MOREPhilip Elmer-DeWitt - Jun 20, 2013 1:58 PM ET
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