Antitrust Lawyer: Apple Loss to DOJ Will Hurt Company’s Reputation Among Consumers

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

“It’s going to be a very good trial for the Justice Department and a few very bad days for Apple,” said David Balto, a public interest antitrust attorney and former policy director of the Federal Trade Commission, of the upcoming court battle between Apple and the Department of Justice over the issue of alleged ebook price-fixing.

According to Balto, the case, which many in publishing industry feel is a witch hunt against Apple and publishers at the behest of Amazon, is a fairly typical antitrust case and that Apple doesn’t have a very good chance of winning.

“It’s a mainstream case. To beat the Justice Department [in this case] would be like beating the New York Yankees with Babe Ruth,” he said. “It’s not impossible but they have an extraordinary uphill battle.”

Should Apple lose the case, as Balto predicts, it could hurt their reputation among consumers, he said, citing Microsoft’s antitrust bouts in the late 1990s.

In 1998, the United States sued Microsoft accusing it of being a monopoly and violating both Sherman Antitrust acts. The case centered on Microsoft’s bundling of its Internet Explorer browser with its Windows software, a practice that was credited with Microsoft winning the browser wars at the time.

According to Balto, some of the testimony in the case hurt Microsoft’s brand among consumers.

“What we heard first in the Microsoft case was Bill Gates talk about how he wanted to cut off Netscape’s airwaves and kill a competitor and I think we’re going to hear similar stuff from Steve Jobs,” he said, adding, “Microsoft has suffered for many years because of the bad reputation that came about from what we all learned about them in their antitrust trial.”

To Balto, this antitrust case is an important one for the U.S. and consumers.

“There are a few cases that will have as dramatic an impact on consumers as this case,” he said. “Not only will it bring balance back to the ebook market, which millions of consumers care about, but more importantly it will establish the rules of the road for electronic commerce and prevent these types of cartels from being formed in the future.”


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