Apple loses appeal in e-book antitrust case - Part 3

This is the third and final comment in a series on the Second Circuit’s June 30 decision in the Apple e-books antitrust case.

The Second Circuit's decision in the Apple e-book case contains a rather acrimonious exchange between Judge Debra Livingston (author of the majority opinion) and Judge Dennis Jacobs (the dissenting judge) - which is a bit unfortunate, as there is much to harvest from their debate. The judges directly address each other - and are unsparing in their disdain for the other's theory of the case. Livingston may have the better of the argument (and she in part writes for the majority), but there is much to value in Jacobs's dissent as well. This is the final comment in a series examining the Apple e-book case (Part I and Part 2 of the series examine the background and the majority theory of liability, respectively). This comment examines Judge Jacobs's dissent and the ideas behind it.

Let's first look at the rather broad zone of agreement between Jacobs and the majority of the panel. Jacobs has no illusions about Apple's bruising conduct - he accepts Apple's forceful role in moving e-book distribution towards commissioned agency pricing. But he doesn't view Apple's conduct (when considered together with the e-book publishers) as constituting per se price fixing. Rather, he believes that any agreement among Apple and the e-book publishers should be evaluated according to the Rule of Reason - and he would further find that application of the Rule, given the Amazon-imposed market structure for e-books prior to Apple's iPad introduction, compels discharging Apple of antitrust liability (recall the e-book publishers had settled with the government prior to the litigation, accepting that they at least engaged in questionable pricing behavior).