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Apple hits Amazon with a well-timed zinger

If U.S. District Judge Denise Cote needed a reminder that she backed the bully in the 2013 e-book antitrust ruling that made her infamous on the Internet, Apple and Hachette on Tuesday engineered a doozy.

On Monday, Judge Cote received from Apple and 30 states attorneys general the terms of the deal they’ve cut — presumably a dollar amount in millions — to settle the separate civil case that rode like a room full of expensive suits on Cote’s decision. Apple has promised to take its appeal to the Supreme Court, if necessary. (See: The big ‘if’ in Apple’s e-book settlement.)

A few hours after the deal was made public, a reporter with good connections with Apple PR posted a screen shot of Hachette titles being discounted on Apple’s iTunes bookstore. “Apple is happy,” Peter Kafka wrote on Re/Code, in a widely retweeted headline, “to sell you the Hachette books Amazon won’t stock.”

It was the second high-profile zinger in a month aimed at Amazon. In May, a front-page story in the New York Times reported that the e-commerce giant, to extract concessions from Hachette, had begun delaying delivery of some of the publisher’s titles, removing others from its online bookstore, and in some cases — including J.K. Rowling’s new novel — refusing pre-orders altogether.

“How is this not extortion?” Dennis Loy Johnson of Melville House tweeted in the Times story. “You know, the thing that is illegal when the Mafia does it.”

Amazon, for its part, told AppleInsider that the Hachette stalemate is a standard part of negotiations designed to benefit consumers:

“Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers in the medium and long term,” it said.

Amazon controlled 90% of the e-book market in 2010 when Hachette and four other publishers signed contracts with Apple that replaced the industry’s wholesale model, in which Amazon set the prices of e-books, with an agency model in which the publishers did.

The plot quickly thickened. The price of e-book bestsellers rose overnight. The DOJ filed antitrust charges. The publishers settled. Apple fought, and lost last year in a high-profile trial in which Judge Cote — who had overseen the publishers’ settlements — played judge and jury. Her ruling, which empowered the monopolist and punished the new entrant, seemed to many critics — including the editors of the Wall Street Journal — to turn U.S. antitrust law on its head.

Ironically, it was Cote herself who set the timeline by which the media spotlight is getting shined and re-shined on her. To prevent the publishers from negotiating collectively, her final judgement specifies a rolling schedule by which their contracts with Amazon expire. This summer it’s Hachette that is getting squeezed, and trying to rally the press to its cause. We could be hearing from the others, one after another, soon enough.

Read Philip Elmer-DeWitt’s Apple coverage at or subscribe via his RSS feed.