Friday, September 21, 2012

By settling in Europe, did Apple and the e-book publishers admit liability in the USA?

I've written a fair bit about the Apple e-books litigation, but I've focused on the US mostly. But that's not been the only place they've been called to the carpet. The EU Competition Commission had its own concerns and launched its own inquiry.

On September 19, Apple and 4 e-book publishers reached a settlement to resolve the EU issues. Similarly to the USA, the EU has opened the proposal up to public comments. And the terms of that proposed settlement are telling for what will happen in the USA as well, for one very important reason:

By accepting this settlement they show that they can't actually believe the arguments they raised when contesting the US publisher settlement.

I've written about the publisher settlement a few times (and linked to the page below in case you're interested). One complaint has been that the settlement forced the publishers to terminate their agency publishing agreements with Apple. But here, Apple and the publishers accept that the settling publishers will terminate their agency agreements. And in fact, many of the proposed terms from the US settlement with respect to the agency clauses reappear here in the EU, with everyone accepting them: 5 years without most-favored-nations clauses, other retailers can sell e-books at whatever price they want without interference for 2 years, etc.

In the USA, this was an illegal overreach by the Department of Justice. In Europe, it's something they accept even without trial.

Yes, this is not a technical admission that they engaged in illegal behavior. The proposed settlement makes it clear that Apple and the publishers have not admitted guilt. But the fact of the settlement, if it's entered, may be admissible into evidence in the USA, and even if it's not you can bet that the DOJ will try to find a way to bring it up. And any non-privileged conversations leading up to the decision to settle will also come into evidence. Sure, it's possible the jury will be able to distinguish between the technical differences between the EU competition law standards (which exist to protect competitors) and US antitrust standards (which exist to protect competition).

But it's also possible they won't.

Links to LegalMinimum bundle for Apple e-books litigation posts:
Text of EU settlement documents


Thanks for commenting. Posts and comments aren't legal advice; requests for legal advice in the comment probably won't get answered. Sorry to have to do this but someone someday is going to make me glad I did...