The two competing theories of law that ran through Apple’s e-book antitrust trial cut right through the appellate court ruling issued today.
Apple lost the appeal, as it lost the original case in a singe-judge bench trail two years ago. This one was a split decision, 2-1, that laid the legal fault lines bare.
And from the harsh language in both the majority decision and the dissent, it sounds like the three judges had a helluva fight.
Two of the judges agreed with District Judge Denise Cote’s 2013 decision. She held that anybody involved in a conspiracy that results in higher prices to consumers has violated the Sherman Antitrust Act. Period. No ifs, ands or buts.
Judge Dennis Jacobs, writing the dissent, took Apple’s side. He argued that market conditions (i.e. Amazon’s e-book monopoly) mattered, as did the fact that Apple was a book distributor, not a book publisher, and that recent court decisions have given vertical players more leeway in their negotiations with horizontal competitors.
“In arriving at this startling conclusion,” sniped Debra Ann Livingston, writing for the majority, “the dissent makes two fundamental errors.”
Judge Jacobs sniped right back, calling the majority’s theory of the case “primitive as a matter of antitrust doctrine and illiterate as a matter of economics.”
Apple could ask the full Second Circuit to rehear the case, or take it directly to the Supreme Court.
Apple declined to tip its hand, but having fought the case this far, the company doesn’t seem inclined to give up now.
This is the statement it released to Fortune:
“Apple did not conspire to fix e-book pricing, and this ruling does nothing to change the facts. We are disappointed the Court does not recognize the innovation and choice the iBooks Store brought for consumers. While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010 and are assessing next steps.”
My colleague Jeff John Roberts, who thinks an appeal to the Supreme Court is unlikely, has the text of the decision and the dissent. See Apple conspired with book publishers, appeals court confirms.