Wednesday, May 16, 2012
Ruling in e-books class action is blow to defense in DOJ antitrust suit
U.S. District Judge Denise Cote could not have sent a stronger message to Apple, Penguin, and Macmillan in an opinion Tuesday denying their motions to dismiss a private e-books antitrust class action: E-books collusion claims, in both the private case and the Justice Department's antitrust suit, are not going away unless the defendants agree to settle them. The judge, who is presiding over all of the e-books antitrust litigation, roundly rejected the legal defenses Apple and the publishers advanced and brushed aside their suggestions that Amazon is the real monopolist villain in the e-books market.
The publishers were hoping that the class action didn't meetthe high pleading standard for antitrust complaints under the U.S. Supreme Court's ruling in Bell Atlantic v. Twombly, but Cote found there were plenty of the specific, well-supported allegations of collusion that Twombly demands. (As an aside, Cote's ruling, which cites a 2nd Circuit Court of Appeals decision from April and other recent Twombly interpretations, is more evidence that the Supreme Court ruling isn't as daunting a standard as the antitrust bar once thought.) Cote cited, in particular, a passage from Walter Isaacson's biography of Steve Jobs, in which Jobs describes the publishing industry's distress at Amazon's pricing policies and its concerted attempts to break Amazon's grip; various publishers' meetings with Amazon to complain about its policies; and publishers' apparently concerted attempts to withhold books from Amazon before Apple entered the business. Those added up to a plausible case of collusion, Cote found.