Efficient markets depend on firms acting in their independent business interests. In this case, the District Court’s failure to consider the economics of the vertical agreements between Apple and the Publisher Defendants led it to infer that Apple facilitated and participated in a horizontal price-fixing conspiracy. The District Court never considered evidence and economic reasoning that the vertical agreements were in Apple’s independent business interest in entering e-book retailing, wholly apart from any horizontal conspiracy.
The provisions of the agreements at issue — agency, ‘most-favored-nation’ (MFN) clauses, and price caps—can be instrumental in facilitating new entry, particularly into markets with an entrenched, dominant firm. In this case, the District Court disregarded economic evidence and reasoning that these provisions served Apple’s independent business interest in entering the e-book market, where Amazon was a near-monopolist. The District Court also ignored economic evidence and reasoning suggesting that Apple’s entry into e-book retailing, and not the MFNs, allowed the Publisher Defendants to persuade Amazon to switch from a wholesale to an agency business model.
The District Court also erred in equating price increases for some e-books with harm to competition. Apple’s entry into the e-book retail market dramatically increased competition by diminishing Amazon’s power as a retail monopolist (and its ability to pursue a “loss-leader” strategy that inefficiently priced e-books below their acquisition cost). That increased competition gave publishers more bargaining power, thereby bringing ebook pricing closer to competitive levels. These errors threaten to chill competition by discouraging the use of common vertical contracting techniques that are often essential to facilitating the expensive and risky investments needed for entry into highly concentrated markets. Our antitrust laws should encourage, not penalize, vertical contracting arrangements that facilitate entry and enhance competition.
– Caltech’s Bradford Cornell and NYU’s Janusz Ordover, from an amicus brief defending Apple’s actions in entering the e-books market to challenge Amazon’s dominance. (via Daring Fireball)
CIA seal (Photo credit: Wikipedia)
This is an important story. The Senate Intelligence Committee is responsible for oversight of the CIA. The Committee prepared a lengthy report on the torture policies of the George W. Bush administration, and accessed CIA files at a facility set up by the CIA in Virginia. The CIA had agreed not to track what the Committee was accessing at such facility.
But now it turns out that the CIA was apparently spying on Committee staff after the staff learned that an internal report prepared by the CIA agreed with the still-classified torture report drafted by the Committee. The CIA Inspector General is involved.
The Intelligence Committee, needless to say, is angry. “The Senate Intelligence Committee oversees the CIA, not the other way around,” Sen. Martin Heinrich (D-N.M) said in a press release.
The CIA Inspector General’s Office has asked the Justice Department to investigate allegations of malfeasance at the spy agency in connection with a yet-to-be released Senate Intelligence Committee report into the CIA’s secret detention and interrogation program, McClatchy has learned.
The criminal referral may be related to what several knowledgeable people said was CIA monitoring of computers used by Senate aides to prepare the study. The monitoring may have violated an agreement between the committee and the agency.
The development marks an unprecedented breakdown in relations between the CIA and its congressional overseers amid an extraordinary closed-door battle over the 6,300-page report on the agency’s use of waterboarding and harsh interrogation techniques on suspected terrorists held in secret overseas prisons. The report is said to be a searing indictment of the program. The CIA has disputed some of the reports findings.
Since when does the Intelligence Oversight Committee become subject to CIA oversight?
Image via CrunchBase
This will be a big deal to Apple. Peter Oppenheimer, its current Senior VP and CFO, is set to retire at the end of September. He has been with the company since 1996.
He will be succeeded by Luca Maestri, Apple’s current vice president of Finance and corporate controller.
Apple’s full press release is here.
The Discovery Channel created a new TV series called Klondike, a dramatic historical story based on reality. Its executive producer is Ridley Scott. It is a terrific story and is available here on iTunes.
(via Balloon Juice, where you can find out more about the restaurant.)
Give it a chance. Its not bad. The group is called Babymetal. If you like it, you can hear more at their YouTube channel.
(Photo credit: Wikipedia)
Since the Apple TV was first introduced, Apple has referred to the device as a “hobby.”
But its hobby days are over. According to Tim Cook, the device is now generating over $1 Billion a year in revenue. In addition, Apple TV is the fasted growing hardware device that Apple manufactures.
We cannot guarantee that Android is designed to be safe, the format was designed to give more freedom. When people talk about 90% of malware for Android, they must of course take into account the fact that it is the most popular operating system in the world. If I had a company dedicated to malware, I would also be addressing my attacks on Android.
– Google’s Android Operating System head Sundar Pichai. This is certainly an honest reply.
Reporting from the Guardian:
Britain’s surveillance agency GCHQ, with aid from the US National Security Agency, intercepted and stored the webcam images of millions of internet users not suspected of wrongdoing, secret documents reveal.
GCHQ files dating between 2008 and 2010 explicitly state that a surveillance program codenamed Optic Nerve collected still images of Yahoo webcam chats in bulk and saved them to agency databases, regardless of whether individual users were an intelligence target or not.
In one six-month period in 2008 alone, the agency collected webcam imagery – including substantial quantities of sexually explicit communications – from more than 1.8 million Yahoo user accounts globally.
Yahoo reacted furiously to the webcam interception when approached by the Guardian. The company denied any prior knowledge of the program, accusing the agencies of “a whole new level of violation of our users’ privacy”.
This actually looks pretty good.
Of course, no one outside the NSA knows for sure. But the timeline of the release of the code matches documents created by the NSA and released by Edward Snowden.
Mike Lofgren has written a must-read article wherein he describes what he calls the American “Deep State.” It is composed of hundreds of thousands of contractors and private companies, combined with government bureaucrats. It is a danger to all of us because its operates under its own rules and its members are not subject to recall by the electorate.
Here is an excerpt of the article:
During the last five years, the news media has been flooded with pundits decrying the broken politics of Washington. The conventional wisdom has it that partisan gridlock and dysfunction have become the new normal. That is certainly the case, and I have been among the harshest critics of this development. But it is also imperative to acknowledge the limits of this critique as it applies to the American governmental system. On one level, the critique is self-evident: In the domain that the public can see, Congress is hopelessly deadlocked in the worst manner since the 1850s, the violently rancorous decade preceding the Civil War.
As I wrote in The Party is Over, the present objective of congressional Republicans is to render the executive branch powerless, at least until a Republican president is elected (a goal that voter suppression laws in GOP-controlled states are clearly intended to accomplish). President Obama cannot enact his domestic policies and budgets: Because of incessant GOP filibustering, not only could he not fill the large number of vacancies in the federal judiciary, he could not even get his most innocuous presidential appointees into office. Democrats controlling the Senate have responded by weakening the filibuster of nominations, but Republicans are sure to react with other parliamentary delaying tactics. This strategy amounts to congressional nullification of executive branch powers by a party that controls a majority in only one house of Congress.
Despite this apparent impotence, President Obama can liquidate American citizens without due processes, detain prisoners indefinitely without charge, conduct dragnet surveillance on the American people without judicial warrant and engage in unprecedented — at least since the McCarthy era — witch hunts against federal employees (the so-called “Insider Threat Program”). Within the United States, this power is characterized by massive displays of intimidating force by militarized federal, state and local law enforcement. Abroad, President Obama can start wars at will and engage in virtually any other activity whatsoever without so much as a by-your-leave from Congress, such as arranging the forced landing of a plane carrying a sovereign head of state over foreign territory. Despite the habitual cant of congressional Republicans about executive overreach by Obama, the would-be dictator, we have until recently heard very little from them about these actions — with the minor exception of comments from gadfly Senator Rand Paul of Kentucky. Democrats, save a few mavericks such as Ron Wyden of Oregon, are not unduly troubled, either — even to the extent of permitting seemingly perjured congressional testimony under oath by executive branch officials on the subject of illegal surveillance.
Lofgren also describes the problems caused by the Deep State in this episode of Bill Moyers:
Both the article and the video are worth careful review.