The Department of Justice today asked Judge Denise Cote to force Apple to throw out its existing contracts with the five publisher defendants in its ebook price-fixing case and essentially impose a five-year ban on agency model terms.
“Apple shall not enter into or maintain any agreement with any E-book Publisher or supplier of any other form of content (e.g., music, other audio, movies, television shows, or apps where such agreement likely will increase, fix, or set the price at which other E-book Retailers or retailers of other forms of content can acquire or sell E-books or other forms of content,” according to the proposed injunction filed in U.S. District Court.
Under the proposal, Apple would also have to let other ebook retailers provide links to their ebookstores from their iOS apps, “allowing consumers who purchase and read e-books on their iPads and iPhones easily to compare Apple’s prices with those of its competitors.”
Apple’s compliance with the new rules would be overseen by a monitor. And the company would have to hire an internal Antitrust Compliance Officer, who “will be hired by and report directly and exclusively to the Audit Committee of Apple’s Board of Directors.”
We’ll have more on this story Monday.
Members of the Senate Judiciary Committee will wait until after August recess to vote on federal shield law legislation introduced last week. The committee met today to consider the Free Flow of Information Act, but ran out of time before holding a vote.
The Committee is scheduled to reconvene Sept. 12. In the meantime, senators will work to hash out amendments to the legislation. And First Amendment advocates, including the Authors Guild, will continue efforts to support the bill.
From Australia, which is considering a major change to copyright law, comes an eloquent defense of keeping intact a system that enables authors to get paid when schools and the Australian government uses other organizations use their work. Author Linda Jaivin saves her harshest criticism, however, for the proposed addition of a fair use exception to Australia’s copyright law.*
Jaivin, who writes novels and nonfiction books focusing on China, details what a proposed repeal of statutory licenses would mean for her and other authors.
“As a member of the rights management organisation Copyright Agency for many years, I have received payments ranging from a few dollars to nearly one thousand. Among those bodies who have copied my work are universities and the Attorney-General’s Department. The Australian Law Reform Commission’s proposed repeal of statutory licences, which provide this secondary income, will rob me of an important source of revenue…”
Jaivin then gets to the fair use proposal:
“[A]nd the proposed new ”fair use” exception, that would allow even businesses to use copyrighted content without permission, would mean a business could steal the product of years of work, profit from it and still have the gall to call this ”fair.”
If you are going to do this, please at least have the decency to call it by its correct name: ”theft.'”
To allow others to steal and/or profit from intellectual property that we have created is no different than saying it would be OK to smash your way into a designer’s atelier and grab whatever outfits you fancy.
The Commission’s proposal would replace statutory licenses for certain uses, including educational uses, with a system of “voluntary licensing arrangements” worked out by individual content owners (for more on how this would work, see this explanation from Australia’s Copyright Agency). Proponents say a more flexible system is better suited to the digital age. As Jaivin sees it:
“(The new system) will confront writers with the burden of tracking down copyright breaches and of finding the means to prosecute them under law. Few of us have the time, legal expertise or financial wherewithal to do so, so this effectively disempowers us even to pursue what legal rights we would have left.
The ALRC would put the onus of proof of the crime on the victim, which cannot be a good principle of law in any of its aspects.”
*Fair use is a defense to copyright developed by American courts to reconcile copyright protection with free expression. It’s rather vaguely defined and its application varies greatly from case-to-case. Many other countries, including Australia, recognize a similar but much more carefully enumerated exception to copyright known as fair dealing.
With the Senate Judiciary Committee scheduled to take up federal shield law legislation tomorrow, advocates are rallying support for passage of this crucial First Amendment protection
The Authors Guild is part of a coalition of news companies, media trade groups and other free press advocacy organizations that have sent a letter to Judiciary Committee members that says:
“In the wake of revelations that the Justice Department used a warrant to obtain the email content of a Fox News reporter, and secretly subpoenaed Associated Press phone records affecting over 100 journalists and covering over 20 lines (including work, home and cell phones; bureaus in three different cities; and the AP line at the House of Representatives press gallery), a federal shield law is needed now more than ever to prevent government overreach and protect the public’s right to know.”
Those revelations led Attorney General Eric Holder recently to issue new guidelines for obtaining journalists’ records while investigating leaks. The bipartisan Free Flow of Information Act, based on a 2009 bill that made it through committee but failed to become law, would expand on and codify those new DOJ guidelines.
A River Runs Through It: Amazon Gets Reminded of Its Namesake as ICANN Rejects Domain Bid; “.author,” “.book,” Still on Block
As Amazon vies to snag exclusive rights to use top-level domain (TLD) names including “.author,” “.book,” and “.read,” last week it was thwarted in its attempt to buy one suffix it coveted: “.amazon.”
The online retailer applied to purchase the domain name after the Internet Corporation for Assigned Names and Numbers (ICANN) announced plans last year to sell generic top-level domain names (website suffixes such as “.com” and “.org”) to private companies. The New York Times reports that an ICANN committee recommended against selling the river’s name to Amazon after a group of Latin American countries voiced their objections in a letter.
“In particular ‘.amazon’ is a geographic name that represents important territories of some of our countries, which have relevant communities, with their own culture and identity directly connected with the name,” the letter said. “Beyond the specifics, this should also be understood as a matter of principle.”
“Placing such generic domains in private hands is plainly anticompetitive, allowing already dominant, well-capitalized companies to expand and entrench their market power. The potential for abuse seems limitless.
Senators Renew Push for Shield Law; Say Bill Would Codify Justice Department’s New Protections for Journalists
The Senate Judiciary Committee is scheduled this week to consider legislation that would turn into law new Department of Justice guidelines putting greater restrictions on how the government collects journalists’ private information while investigating leaks.
The shield law legislation calls for courts to “apply a balancing test before compelling disclosure” of sources and other information from journalists. It also requires that courts arbitrate government media records requests and that journalists be notified within 90 days of their records being reviewed by the DOJ.
The Authors Guild, which has long backed the enactment of such a law, is part of a coalition of media organizations calling on Congress to use this as an opportunity to strengthen the First Amendment protection of press freedom.
Earlier this month, the DOJ drafted a new policy for investigating journalists in response to outrage over revelations that it secretly collected the phone records of Associated Press reporters and examined emails of Fox News reporter James Rosen in a search for the source of government leaks.
Judge in Apple Case Cites Publishers’ “Frequently Coordinated” Efforts to Upend Amazon’s $9.99 Ebook Pricing
In her ruling against Apple today, Judge Denise Cote cites witness testimony as well as documentary evidence including emails and other records of communication considered during the three-week price-fixing trial. She says circumstantial evidence also “compellingly” supports the idea that Apple gave publishers the means to pull off a pricing conspiracy they couldn’t accomplish on their own.
Here’s the sequence of events as detailed in Cote’s decision:
Late 2008-through 2009: Major publishers who would later be named as defendants along with Apple tried “frequently coordinated their efforts” to pressure Amazon to raise its $9.99 price point for digital books.
U.S. District Judge Denise Cote has ruled against Apple in the Justice Department’s ebook price-fixing case, saying the tech company coordinated a scheme involving five major publishers that were looking for a way to challenge Amazon’s ebook pricing strategy. In a decision issued today, Cote said:
“The plaintiffs have shown that the publisher defendants conspired with each other to eliminate retail price competition in order to raise e-book prices, and that Apple played a central role in facilitating and executing that conspiracy. Without Apple’s orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010.”
Apple released a statement saying it plans to appeal the decision.
“Apple did not conspire to fix e-book pricing,” Apple spokesman Tom Neumayr said. “When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry. We’ve done nothing wrong.”
Cote also called for a trial on damages, noting that the conspiracy caused ebook prices to rise, resulting in some consumers paying more, buying a title other than the one they wanted or forgoing a purchase altogether.
The publishers named as defendants settled with the Justice Department long before the case went to court.
Having gained a dominant share of the market through deep price cutting, Amazon has begun reducing the amount it discounts some scholarly and small press titles, upsetting publishers and authors who worry the increased prices will hurt sales, David Streitfeld wrote in the New York Times on July 4th.
The piece pointed out that with Borders gone, Barnes & Noble shrinking and many independents shuttered, consumers often have no choice but to buy from Amazon. Stephen Blake Mettee, chairman of the board of the Independent Book Publishers Association, was quoted as saying that Amazon is following a tried and true strategy.
“You lower your prices until the competition is out of the picture, and then you raise your prices and get your money back,” he said.
An Amazon spokesperson said the company is actually lowering prices, but declined to comment on specific examples of titles for which the discounts have been reduced. The evidence of Amazon’s price increases, the article acknowledges, is “anecdotal and fragmentary,” but it cites several examples and a marketer for university and independent presses to make the case.
Streitfeld followed his article with a blog post about the subject in which he looked back to the days when “bookselling was a local activity” and major cities would have multiple independents. He also reminded us what’s a stake when we talk about a diverse literary marketplace.
The hippie, black and women’s movements of the 1960s would not have been so successful in challenging authority without the bookstores, which made their ideas widely available and sympathetic in a way that television, for instance, did not.
Noting that most publishers were reluctant to speak with him for the story, Streitfeld quoted Melville House’s Dennis Loy Johnson at length.
Class certification is premature in the Google mass books digitization case, says a federal appellate court. Fair use has to be decided first.
In the latest twist in the litigations over Google’s library-scanning project, The Second Circuit Court of Appeals yesterday vacated Judge Denny Chin’s class certification ruling* of last May in Authors Guild v. Google. The appellate court said that resolution of the fair use issues needed to come first since it would help determine whether “the commonality of plaintiffs’ injuries, the typicality of their claims, and the predominance of common questions of law or fact” merited treating the lawsuit as a class action.
In other words, if Google’s fair use defense requires a book-by-book analysis, then this would weigh against class certification. If a fair use ruling can be made more broadly, then judicial economy is more likely to weigh on the side of class certification.