Friday, June 15, 2012
Posted by D. Daniel Sokol
Anant Raut (Pepper Hamilton LLP) asks "Siri: What is Antitrust?"
ABSTRACT: The DOJ's antitrust lawsuit against Apple and various book publishers, alleging an unlawful conspiracy to raise eBook prices,evoked a swift and visceral reaction online. Mac-o-philes the world over did a double take at their tablet screens and began posting furiously about the DOJ specifically and antitrust in general.
Two things became apparent.
One, most people have no idea what antitrust actually does. And the fault rests squarely on us, as antitrust practitioners. Antitrust is a terrible word. It starts with a negative prefix. Nearly half of it is spent preparing the listener for what it is not. Talk about it for too long, and people's eyes begin to glaze over, and excuses are made about refreshing one's drink or the lateness of the hour. Two, the people who like Apple really, really like Apple. While that's easy to mock, it's an incredible story to think about. By the late '90s, under the dial-a-Dell model, computers had become a commodity business. Apple went in the other direction, investing in style and making computers a premium product. Apple became expensive and chic, like Bang & Olufsen if Bang & Olufsen had targeted a demographics two generations younger.
Nor was Steve Jobs content with turning a handsome profit merely on the sale of computers; it was his vision to use his stylish showpiece consumer products to upend a variety of staid industries (which would, in turn, increase sales of said stylish showpiece consumer products). While it may be easy to dismiss some of the Mac-o-Philes' criticisms with the always-infuriating "oh, they just don't understand antitrust," they are entirely right about one thing: The model Apple sought to apply in the eBook industry is the same iTunes model it has applied elsewhere without challenge under the antitrust laws.