by Mike Masnick
Fri, Oct 12th 2012 2:30pm
by Mike Masnick
Thu, Oct 11th 2012 3:11am
Fight Over Real Estate Listings Escalates As NeighborCity Counters Copyright Claims With Antitrust Accusations
from the fight-picks-up dept
Given all that, it's not surprising to see that in AHRN's latest response to the original lawsuits, it's filed counterclaims arguing that the actions are antitrust violations. The fact that NAR offered to cover the legal expenses for the MLSs only makes the situation look worse for NAR -- and advances the suggestion that this is really about realtors being pissed off that someone is holding them accountable. NeighborCity highlights that soon after the original lawsuits were filed, NAR approved $161,667 in legal fees for these kinds of legal efforts, despite it not actually being a part of the lawsuit.
Defendants’ coordinated: (a) cease and desist letters to AHRN, (b) refusals to deal letters to AHRN; (c) repudiation letters to AHRN, (3) sham lawsuits against AHRN and (d) agreement or offer to pay for or contribute to the costs of litigation against AHRN by MLSs and real estate brokers, was intended to and did have anti-competitive effects on AHRN in the market for real estate brokerage services. Anti-competitive effects include the elimination of price competition and price maintenance on brokerage services above market levels nationwide, impeding and blocking market entry by AHRN and otherWe're quite used to seeing legacy players in an industry fight innovation and upstart competitors who change the nature of a market, but it's rare to see cases where it seems so incredibly blatant that they're doing this just because they don't like the service in question, rather than via any sort of legitimate copyright claim.
by Mike Masnick
Thu, Sep 6th 2012 12:12pm
Judge Quickly Approves Ebook Pricing Settlement; Says It's In The Public Interest To Stop Price Fixing
from the will-prices-drop? dept
- They must terminate their Agency Agreements with Apple within seven days after entry of the proposed Final Judgment.
- They must terminate those contracts with e-book retailers that contain either a) a restriction on the e-book retailer’s ability to set the retail price of any e-book, or b) a “Price MFN,” as defined in the proposed Final Judgment, as soon as each contract permits starting thirty days after entry of the proposed Final Judgment.
- For at least two years, they may not agree to any new contract with an e-book retailer that restricts the retailer’s discretion over e-book pricing.
- For at least five years, they may not enter into an agreement with an e-book retailer that includes a Price MFN.
The Complaint and CIS provide a sufficient factual foundation as to the existence of a conspiracy to raise, fix, and stabilize the retail price for newly-released and bestselling trade e-books, to end retail price competition among trade e-books retailers, and to limit retail price competition among the Publisher Defendants. Although the Government did not submit any economic studies to support its allegations, such studies are unnecessary. The Complaint alleges a straightforward, horizontal price-fixing conspiracy, which is per se unlawful under the Sherman Act.... The Complaint also details the defendants’ public statements, conversations, and meetings as evidence of the existence of the conspiracy. The decree is directed narrowly towards undoing the price-fixing conspiracy, ensuring that price-fixing does not immediately reemerge, and ensuring compliance. Based on the factual allegations in the Complaint and CIS, it is reasonable to conclude that these remedies will result in a return to the pre-conspiracy status quo. In this straightforward price-fixing case, no further showing is required.Because of this, Cote rejects the idea of any evidentiary hearing and just approves the deal. She notes that due to tons and tons of public comments that were allowed in the case, she is quite well informed of the issues and sees no additional benefit from such a hearing:
It is not necessary to hold an evidentiary hearing before approving the decree. Given the voluminous submissions from the public and the non-settling parties, which describe and debate the nature of the alleged collusion and the wisdom and likely impact of settlement terms in great detail, as well as the detailed factual allegations in the Complaint, the Court is well-equipped to rule on these matters. A hearing would serve only to delay the proceedings unnecessarily.She does try to summarize the comments against the settlement into four broad categories: (1) that the settlement would harm third party players like indie book stores, indie ebook retailers, indie publishers and authors, (2) that the settlement is "unworkable," (3) that there weren't enough facts to support the price fixing claim, (4) that the impact of such price fixing was actually pro-competition, in that it broke up Amazon's market dominance. She then breaks down each of these arguments to show why none of them apply and the settlement should move forward.
I won't go through all four issues, but I would like to focus on the two that get the most attention, the first and the last. On the first issue, she points out that antitrust law is not designed to protect businesses from the working of the market, but to protect the public from the failure of the market. If the settlement causes some businesses to suffer, but it's in the public interest, there is no problem there.
If unfettered e-books retail competition will add substantially to the competitive pressures on physical bookstores, or if smaller e-book retailers are unable to compete with Amazon on price, these are not reasons to decline to enter the proposed Final Judgment.As for the last issue (breaking up Amazon's dominance), she notes that it was "perhaps the most forceful species of criticism" but still does not find it persuasive here. The court more or less notes that Amazon's market position isn't on trial, and its use of wholesale pricing does not equal price fixing, as some have alleged. Nor does it show "predatory" pricing, which was a key complaint. The problem there: the evidence showed that Amazon was "consistently profitable." And, to show predatory pricing, "one must prove more than simply pricing below an appropriate measure of cost" but also that the company will jack up prices down the road. And all of the comments failed to do that:
None of the comments demonstrate that either condition for predatory pricing by Amazon existed or will likely exist. Indeed, while the comments complain that Amazon’s $9.99 price for newly-released and bestselling e-books was “predatory,” none of them attempts to show that Amazon’s e-book prices as a whole were below its marginal costs.Oh, and finally, the court points out that swinging back the blame to Amazon is meaningless for the purpose of this case, anyway, because even if the court accepted that Amazon was price fixing too, that doesn't make it okay for the publishers to price fix themselves. Think of it as the "two wrongs don't make a right" rule.
Third, even if Amazon was engaged in predatory pricing, this is no excuse for unlawful price-fixing. Congress “has not permitted the age-old cry of ruinous competition and competitive evils to be a defense to price-fixing conspiracies.” ... The familiar mantra regarding “two wrongs” would seem to offer guidance in these circumstances.This probably does not bode well for the other publishers and Apple who are fighting the whole thing...
by Mike Masnick
Thu, Jul 19th 2012 3:09am
from the good-for-them dept
Many people have believed that such deals are clear antitrust violations -- and a lawsuit against big pharma Schering-Plough (owned by Merck) tested this theory, only to be dismissed by the district court. That original ruling really twisted logic in a few knots to come to its conclusion -- and the good news is that, two years later, the 3rd Circuit appeals court has reversed the ruling. The ruling is long, but interesting. It starts out by noting that other court's ruling on this matter seem to take the concept of "patent validity" way too far. As we've discussed in other contexts, patent validity says that you have to assume a patent is valid -- but in these cases, the court notes that this unfairly biases the situation in which the bogus patent infringement lawsuits are filed to extract these "pay-for-delay" deals.
First, we take issue with the scope of the patent test’s almost unrebuttable presumption of patent validity. This presumption assumes away the question being litigated in the underlying patent suit, enforcing a presumption that the patent holder would have prevailed. We can identify no significant support for such a policy. While persons challenging the validity of a patent in litigation bear the burden of defeating a presumption of validity, this presumption is intended merely as a procedural device and is not a substantive right of the patent holder.... Moreover, the effectively conclusive presumption that a patent holder is entitled to exclude competitors is particularly misguided with respect to agreements – like those here – where the underlying suit concerned patent infringement rather than patent validity: In infringement cases it is the patent holder who bears the burden of showing infringement.The court then discusses the Hatch-Waxman Act, which is at the heart of these disputes, noting that its intent (to increase availability of generics) seems to be the exact opposite of what happens with these pay-for-delay deals. But where it gets interesting is that the court says that having one company pay another to delay market entrance should be seen "as prima facie evidence of an unreasonable restraint of trade." This is definitely a big ruling -- though its potential disagreement with other courts may get this issue over to the Supreme Court before too long.
It's nice to see the court get it right after the lower court seemed so confused by the issue.
by Mike Masnick
Tue, Jul 17th 2012 3:49pm
Novell's WordPerfect Antitrust Lawsuit Against Microsoft Over Windows 95 Dismissed (Yes, This Is A 2012 Post)
from the justice-is-slow dept
by Mike Masnick
Mon, Jun 4th 2012 1:24pm
from the think-this-through dept
With perfect timing, the Antitrust & Competition Policy Blog held a blog symposium concerning antitrust issues related to Google and there are a bunch of worthwhile reads in there. Much of the focus of the discussion (and some of the EU's complaints) have to do with the nonsensical concept of "search neutrality" -- a made up concept that was designed originally to mock Google for supporting "net neutrality." But just because you add "neutrality" to the end of each phrase doesn't mean that the two have anything in common. Most people supporting the concept of "search neutrality" talk about how it's somehow "unfair" if Google pushes down a website. In fact, that's been the crux of most of the complaints from companies -- that Google doesn't rank them high enough, or somehow favors its own services above their own. But if their services suck and consumers find them annoying or spammy, shouldn't we want Google to demote them? And so far no one has explained why Google should support other search engines.
In that online symposium, Frank Pasquale makes the case for why Google should be subject to having others review its algorithmic choices to keep such searches "neutral." But, in one of the more compelling statements, law professor James Grimmelman points out that for all this talk of "search neutrality," no one can explain how it makes any sense:
You can't just say that you're going to force Google to be "neutral," because there is nothing neutral about what a search engine does. By definition it's picking winners and losers. If it does a bad job of it, people switch to other search engines (and, for what it's worth, a lot of people have been complaining about search quality lately -- and I've certainly found myself using DuckDuckGo and Blekko more frequently as Google doesn't find stuff it should be able to find).
The problem is that one cannot define "manipulation" without some principled conception of the baseline from which it is a deviation. To punish Google for being non-neutral, one must first define "neutral," and this is a surprisingly difficult task.
In the first place, search engines exist to make distinctions among websites, so equality of outcome is the wrong goal. Nor is it possible to say, except in extremely rare cases (such as, perhaps, "4263 feet in meters") what the objectively correct best search results are. The entire basis of search is that different users have different goals, and the entire basis of competition in search is that different search engines have different ways of identifying relevant content. Courts and regulators who attempt to substitute their own judgments of quality for a search engine's are likely to do worse by its users.
Neutrality, then, must be a process value: even-handed treatment of all websites, whether they be the search engine's friends or foes. Call this idea "impartiality." Tarleton Gillespie suggested the term to me in conversation.) The challenge for impartiality is that search engines are in the business of making distinctions among websites (Google alone makes hundreds of changes a year).
But, as Grimmelman notes, even if you can argue that Google shouldn't be allowed to favor its own offerings, that leads to a difficult question: is the purpose of anti-trust law to benefit consumers or to benefit competitors? Some may argue that with greater competition, consumers are automatically better off, but that's slightly misleading. That's true of greater competition in the overall world (and it's why I can choose those competing search engines). But does it make sense to have that same sort of competition within Google by forcing it to change its algorithms? That's a much, much harder case. Again, Grimmelman highlights the problems:
In other words, it seems pretty clear that some of the sites complaining loudest for antitrust action against Google were crappy sites that users didn't want cluttering up their Google search results. Why should Google be punished just because those sites couldn't compete and offer a good service? That seems backwards.
Here, however, it confronts one of the most difficult problems of high-technology antitrust: weighing pro-competitive justifications and anti-competitive harms in the design of complicated and rapidly changing products. Many self-serving innovations in search also have obvious user benefits.
One example is Google's treatment of product-search sites like Foundem and Ciao. Google has admitted that it applies algorithmic penalties to price-comparison sites. This may sound like naked retaliation against competitors, but the sad truth is that most of these "competitors" are threats only to Google's users, not to Google itself. There are some high-quality product-search sites, but also hundreds of me-too sites with interchangeable functionality and questionable graphic design. When users search for a product by its name, these me-too sites are trying to reintermediate a transaction that has very little need of them. Ranking penalties directed at this category share some of the pro-consumer justification of Google's recent moves against webspam.
There is no doubt that we should be cautious around companies that get to be "too big," to make sure they're not doing things that hurt the public. But, so much of the focus on Google is about (a) just how big Google is and (b) how it harms some competitors within Google. Of course, plenty of Google competitors thrive within (and outside) Google as well. It really only seems to be the flailing ones who are complaining the loudest (with the possible exception of Yelp, whose complaints still don't make any sense to me).
If there are legitimate antitrust concerns, they should be discussed, but so far, all of the concerns raised seem to be because some companies just don't like how they rank in Google. And it's not at all clear we need a massive antitrust lawsuit to deal with that issue. It's not at all clear it's an issue to begin with.
by Mike Masnick
Fri, Jun 1st 2012 8:02am
from the who-is-this-helping dept
Nokia and Microsoft are colluding to raise the costs of mobile devices for consumers, creating patent trolls that side- step promises both companies have made.I'm still pretty damn skeptical of either claim. The fact that both were filed in the EU is telling, as the EU generally has a much more aggressive interpretation of antitrust law, meaning that both of these filings really look like two giants slapping each other around for sport, rather than competing in the marketplace.
The only thing that I do find kind of interesting about both filings is the fact that they're focused on the use of patents as a lever for antitrust activity. Patents are, by their very nature, a government-granted monopoly. And there have been arguments made that, as such, their usage deserves extra scrutiny when it comes to antitrust analysis. Though, on the flip side, people might point out that, as government-granted monopolies, patents are immune from antitrust analysis, since by their very nature, they're a government-granted allowance for antitrust behavior. It is, after all, the government granting a monopoly. Should it really be any surprise that companies then do monopolistic things with them?
Either way, I don't see either filing ending well for either company involved. If anything, we can just hope that it helps demonstrate how patents themselves are tools of monopolistic antitrust behavior.
by Mike Masnick
Fri, May 11th 2012 6:56am
from the antitrust-bells? dept
However, a war of words is brewing between Microsoft and Mozilla over the fact that Microsoft is effectively banning native third party browsers on Windows RT -- which will effectively become the "mobile device" version of Windows. On top of that, the company apparently is blocking the use of certain APIs that would be useful -- and which Microsoft's own browser will be able to use.
It's easy to assume nefarious intent on the part of Microsoft, but reading through the details, it feels more like a case where Microsoft is growing jealous of Apple's control over the iPhone platform, and is effectively looking to do some of the same with its next generation mobile offering. I think that's pretty short-sighted. Denying third party browsers may have worked for now, for Apple, but that's driven (in large part) by the larger than life infatuation with Apple products. I'm not sure any other company can pull it off -- especially Microsoft.
The way to compete with Apple is to attack where it's weakest -- and that's by being more open. Instead, it looks like (in typical Microsoft fashion) Microsoft has decided to try to attack Apple by copying where Apple is strongest -- in its walled garden. And, in the process, the company may end up setting off some antitrust alarm bells. Oh, and also, along the way, it will severely hurt its own platform by limiting the types of useful innovations that others might provide. That doesn't seem like a very smart business plan.
by Mike Masnick
Wed, May 2nd 2012 8:49am
from the control-control-control dept
Reason for rejection is the fact that if the user does not have Dropbox application installed then the linking authorization is done through Safari (as per latest SDK).Dropbox is trying to work around Apple's excessive rules, but the whole thing seems a bit crazy. At some point you have to wonder when Apple is going to trip various antitrust rules about using its dominant position on the platform to hurt other companies. It seems developers are eventually going to recognize that, even with Apple's giant market, it might just be easier to focus on more reasonable and open platforms.
Once the user is in Safari it is possible for the user to click "Desktop version" and navigate to a place on Dropbox site where it is possible to purchase additional space.
Apple views this as "sending user to an additional purchase" which is against rules.
by Mike Masnick
Wed, Apr 18th 2012 9:20am
from the the-DRM-they-required dept
Making Amazon such a dominant player in the market was a huge mistake -- and it was totally avoidable. We'd already seen the exact same thing happen with music and iTunes, where the labels originally required DRM, and Apple complied, locking many people into iTunes (a lock-in that was eventually taken away). We couldn't figure out why the publishers were so stupid to give Amazon such power, but it sounds as though it was a combination of technological illiteracy and an irrational fear of "piracy" trumping business sense.
Author Charlie Stross has a great blog post discussing a variety of issues around the history of Amazon and how it became such a dominant player in the market, in which he notes:
However, as subsidiaries of large media conglomerates, the executives who ran the big six had all been given their marching orders about the internet: DRM restrictions would be mandatory on all ebook sales, lest rampant piracy cannibalize their sales of paper books.Once the publishers realized (way too late) that they'd turned Amazon into something of a monopsonistic buying power, they struggled to figure out what to do -- and the end result appears to look something quite like collusion -- which is why they're being sued today by the Justice Department. As the details of the lawsuit make clear, the deal with Apple wasn't just a deal to bring another competitor into the market, but one that was explicitly designed to increase prices for consumers.
(This fear is of course an idiotic shibboleth—we've had studies since 2000 proving that Napster users back in the bad old days spent more money on CDs than their non-pirate peers. The real driver for piracy is the lack of convenient access to desirable content at a competitive price. But if your boss is a 70 year old billionaire who also owns a movie studio and listens to the MPAA, you don't get a vote. Speaking out against DRM was, as more than one editor told me over the past decade, potentially a career-limiting move.)
As Stross notes, this was plan B. And it has now failed. That means that it's time for Plan C -- and the only reasonable plan C to get out from under Amazon's thumb is to drop DRM:
It doesn't matter whether Macmillan wins the price-fixing lawsuit bought by the Department of Justice. The point is, the big six publishers' Plan B for fighting the emerging Amazon monopsony has failed (insofar as it has been painted as a price-fixing ring, whether or not it was one in fact). This means that they need a Plan C. And the only viable Plan C, for breaking Amazon's death-grip on the consumers, is to break DRM.I know there's been some talk about whether or not Apple or Amazon is the more "evil" party in the ebook world -- but it really seems like the publishers dug their own graves here. In their desperation to avoid the dreaded word "piracy," they never bothered to understand the real issues or the obvious results of focusing so strongly on DRM. Handing Amazon so much power was stupid. Colluding with Apple to try to get away from that original stupid decision was potentially even more stupid. The only real path to fixing things is to go back and fix the original stupid decision, and recognize that piracy is a hell of a lot less of a "threat" than handing over the entire market to a single player (or even just two major players).
If the major publishers switch to selling ebooks without DRM, then they can enable customers to buy books from a variety of outlets and move away from the walled garden of the Kindle store. They see DRM as a defense against piracy, but piracy is a much less immediate threat than a gigantic multinational with revenue of $48 Billion in 2011 (more than the entire global publishing industry) that has expressed its intention to "disrupt" them, and whose chief executive said recently "even well-meaning gatekeepers slow innovation" (where "innovation" is code-speak for "opportunities for me to turn a profit").
And so they will deep-six their existing commitment to DRM and use the terms of the DoJ-imposed settlement to wiggle out of the most-favoured-nation terms imposed by Amazon, in order to sell their wares as widely as possible.
If only they'd realized this originally -- just as tons of people had warned them.