Apple Should Win Its E-Book Appeal

Apple’s appeal is important to more than the company.

The Second Circuit has the opportunity to consider the appropriate antitrust rules governing competition between marketing platforms—an important legal and economic issue that federal Judge Denise Cote ignored. Is it illegal for companies subject to a dominant marketer of their product -- in this case Amazon -- to meet and determine how to protect their interests? The court did acknowledge the legitimate fears of the publishers that to challenge Amazon’s policies alone would lead to Amazon’s retaliation, as it did with Macmillan and Hachette. Now the Second Circuit has the opportunity to provide guidelines about how firms like Apple, interested in providing platform competition but needing a critical mass of producers to do so, can compete without running afoul of the antitrust laws.

What Apple and the major booksellers did to get a foothold in a market dominated by Amazon was not restraint of trade. It was competition, and progress.

[Priest teaches antitrust law at Yale Law School.]