Creeping tentacles of the antitrust octopus

Creeping tentacles of the antitrust octopus

Having been found liable for violating the Sherman Act in the e-books case, Apple will now be subjected to whatever remedies the court chooses. As the prevailing party, the Department of Justice has filed its wish list for so-called injunctive relief (orders that regulate conduct). Money damages, which could approach $500 million, will be the subject of a separate proceeding.

According to its recent filing, the DOJ wants the federal court (among other things) to:

  • Prohibit a broad range of contracts and information-sharing between Apple and content providers (such as book publishers, music publishers, movie and TV distributors, and the like) having to do with prices;
  • Forbid any agreements that are “likely” to influence the prices at which others (besides Apple) sell movies, TV shows, books, music, etc.;
  • Forbid agreements that allow the content provider to set prices;
  • Force Apple, without compensation, to market apps that link to its rivals’ e-bookstores;
  • Force Apple to modify or terminate many of its present contracts;
  • Require Apple to snitch on inform authorities about any companies it thinks could be prosecuted for antitrust violations in content sales, and
  • Require Apple to cover the costs of hiring two stool pigeons an in-house “Antitrust Compliance Officer” and an “External Compliance Monitor.” These will be highly paid, well-connected individuals who (armed with blanket court-ordered access to documents and personnel) will be empowered to look over Apple executives’ shoulders, second-guess their competitive decisions, and run to the authorities in Washington with tales of any conduct that could support another antitrust attack against Apple (not just pertaining to e-books but to any line of business Apple engages in). As Apple’s lawyers put it, the DOJ “effectively requests a decade-long roving mandate to parse all of Apple’s business conduct, across all of its myriad businesses, for antitrust compliance.”

Confusing? Paralyzing? Well, yeah—that’s part of the point, in my opinion. It’s also galling, because Apple is being penalized for its business virtues.

In any event, you tell me how the innovative Apple of Steve Jobs’s eye can possibly thrive under such a regime. Arguably, Microsoft couldn’t, under similar circumstances (see here and here).