Unites States of America v. Apple, Inc. et al

Filing 201

RESPONSE to Public Comments on the Proposed Penguin Final Judgment. Document filed by Unites States of America. (Attachments: # 1 Exhibit Kohn Comment, # 2 Exhibit NACS Comment, # 3 Exhibit Steerads Comment)(Fairchild, Stephen)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA

Plaintiff
v.
APPLE, INC. et al

Defendants

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Civil Action No.12-CV-2826 (DLC)

PUBLIC COMMENTS SUBMITTED TO THE UNITED STATES BY STEERADS INC.
CONCERNING A PROPOSED FINAL JUDGMENT AND SUPPORTING STIPULATION
AND COMPETITIVE IMPACT STATEMENT AS TO DEFENDANT THE PENGUIN GROUP
IN THE ABOVE-CAPTIONED MATTER
PRELIMINARY STATEMENT

On December 31, 2012, Plaintiff, United States, gave notice in the Federal Register, 77 Fed.
Reg. 77,094, pursuant to the Antitrust Procedures and Penalties Act 15 U.S.C. § 16 (b) - (h)
(“APPA”). The notice informed the public that the United States had filed a proposed Final
Judgment as well as supporting Stipulation and Competitive Impact Statement in the United States
District Court for the Southern District of New York. The proposed Final Judgment is a settlement
agreement as to Defendant, The Penguin Group (“Defendant”), in the above-captioned matter. The
notice issued in the Federal Register invited public comments. Steerads, hereby, files public
comments for the consideration of the Assistant Attorney General, Department of Justice / Antitrust
Division (“AAG”).
On April 11, 2012 the United States filed a civil antitrust action against Apple Inc.
(“Apple”) and five publishers of print and e-books1 (“Publisher Defendants”), in the above

1

Hachette Book Group, Inc., HarperCollins Publishers L.L.C., Holtzbrinck Publisher, LLC, Penguin Group
(USA), Inc., and Simon & Schuster, Inc. Complaint, ¶¶ 12-17.

-2captioned matter. The Complaint charged that Publisher Defendants infringed Section 1 of the
Sherman Act (15 U.S.C. § 1) by conspiring to fix prices for trade e-books in the United States.
Complaint, ¶¶ 99-100. In a public notice issued on April 24, 2012, the United States announced a
settlement with defendants Hachette Group Book, Inc., HarperCollins Publishers L.L.C., and Simon
& Schuster, Inc. 77 Fed. Reg. 24,518 (April 24, 2012). The Court entered the proposed consent
judgment against settling defendants (“Original Judgment”). Competitive Impact Statement, Section
I. On December 31, 2012 the United States published another public notice, this time announcing
a settlement with Defendant, in the above-captioned matter (“Penguin Final Judgment” or “PFJ”).
Ibid.
In summary, terms and conditions imposed on Defendant in PFJ are clear, thus enforceable.
Relief sought is inadequate, however, for “[u]nder the provisions of section 5 (a) of the Clayton Act,
15 U.S.C. 16 (a), the Penguin Final Judgment has no prima facie effect in any subsequent private
lawsuit that may be brought against the Defendants” (italics omitted). Competitive Impact Statement,
Section V. We respectfully submit that consent to PFJ should be withdrawn, unless Defendant
agrees on a compensatory provision, or “asphalt clause”. We proposed the same remedial provision
as to the Original Judgment.2
For the record, Steerads is a corporation governed by the laws of the Province of Québec,
Canada, having its principal place of business at 3535 Queen Mary Street, Suite 200, Montréal,
Québec, H3V 1H8, Canada, and an office in the United States, at 461 22nd Street West, Suite E, New

2

Similarly, we propose an “asphalt clause” as to PFJ, since “Penguin has now agreed to settle on substantially
the same terms as those contained in the Original Judgment. ... The language and relief contained in the Penguin Final
Judgment is largely identical to the terms included in the Original Judgment”. Competitive Impact Statement, Sections
I and III.

-3York City, New York 10111, USA.

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www.steerads.com. Steerads is privately owned by residents of the Province of Québec; no shares
of the company are publicly traded. Daniel Martin Bellemare, Avocat (Québec Bar)/ Attorney at
Law (Vermont Bar), has prepared public comments on behalf of Steerads, pro bono.
COMMENTS

We respectfully submit that consent to PFJ should be withdrawn, unless Defendant agrees
on a remedial provision, or “asphalt clause”. An “asphalt clause” is tantamount to a waiver of the
statutory limitation in the APPA depriving consent judgment of prima facie effect. An “asphalt
clause” is warranted, considering: (i) The standard of review governing entry of consent judgment
under the APPA, as set forth in United States v. Microsoft Corp., 56 F.3d 1448 (1995) (Silberman,
C.J.); (ii) the gravity of the antitrust offense, a per se offense under Section 1 of the Sherman Act;
and (iii) the strength of the case against Publisher Defendants.
We have proposed identical relief as to the Original Judgment. At this stage, we submit
that PFJ should incorporate an “asphalt clause”, also. An “asphalt clause” is appropriate in this
case, despite the response filed by the United States in the U.S. District Court for the Southern
District of New York on July 23, 2012, in opposition thereto. Like the Original Judgment, PFJ, as
it stands, provides inadequate relief; it lacks relief that would facilitate recovery of damages by
persons injured in their business or property. The prospect of a substantial damage award is an
effective deterrent against future antitrust violations. Deterrence can be achieved by way of consent
judgment, but only to the extent it provides adequate relief.

-4I. LEGAL STANDARD

The United States may seek entry of consent judgment in district court; the court enters the
consent judgment after a determination that it is in the public interest. 15 U.S.C.§ 16 (e) (1). An
interpretation of the APPA must be consistent with the doctrine of separation of powers, in particular
the Executive Branch’s constitutional responsibility to “take Care that the Laws be faithfully
executed”. U.S. Const. art. II, § 3. See Microsoft Corp., 56 F.3d, at 1462. (“A decree, even entered
as a pretrial settlement, is a judicial act, and therefore the district judge is not obliged to accept one
that, on its face and even after government explanation, appears to make a mockery of judicial
power. Short of that eventuality, the Tunney Act cannot be interpreted as an authorization for a
district judge to assure the role of Attorney General”).
The AAG has broad prosecutorial discretion regarding the advisability to settle a case as
well as to terms and conditions of settlement. The same is true of conduct of litigation: the AAG
is sole responsible for drafting a complaint or indictment, and for deciding how a particular matter
should be prosecuted. Microsoft Corp., 56 F.3d, at 1459 (“[S]ection 16 (e) (1)’s reference to the
alleged violations suggests that Congress did not mean for a district judge to construct his own
hypothetical case and then evaluate the decree against that case”).3
A higher level of deference is warranted when a proposed consent judgment is submitted for
entry to a district court pre-trial, Microsoft Corp., 56 F.3d, at 1460-61; post-trial, a district judge
may engage in more thorough review. United States v. E.I. du Pont de Nemours & Co., 366 U.S. 316

3

See also Merger Enforcement Guidelines, § 1 (August 19, 2010). (“These Guidelines are not intended to
describe how the Agencies will conduct the litigation of cases they decide to bring. Although relevant in context, these
Guidelines neither dictate nor exhaust the range of evidence the Agencies may introduce in litigation”).

-5(1961). Relief is of the essence in antitrust litigation. California v. American Stores Co., 495 U.S.
271, 295 (1990) (Kennedy, J.) (divestiture order available to private plaintiff in suit under Clayton
Act Section 16 subject to traditional equitable defenses). The executive and judicial branches have
respective constitutional mandates in a proceeding initiated in district court for entry of a proposed
consent judgment; however, the judiciary remains the ultimate authority over whether entry of a
proposed judgment is in the public interest.
A district court must determine whether a proposed consent judgment is adequate. 15 U.S.C.
§ 16 (e) (1) (A). Such a mandate calls for meaningful review, within the limits imposed by the
Constitution. Judicial review of proposed consent judgment entails neither a “wide-ranging
inquiry”, Microsoft Corp., 56 F.3d, at 1459, nor an “unrestricted evaluation of what relief would
best serve the public”. United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454
U.S. 1083, 102 S.Ct. 638, 70 L.Ed. 2d 617 (1981) cited in Microsoft Corp., 56 F.3d, at 1458.
Nevertheless, relief must be adequate: allegations in a complaint and relief sought in proposed final
judgment must be symmetrical. Microsoft Corp., 56 F.3d, 1461. Otherwise, a proposed consent
judgment “[falls] outside the reaches of the public interest”. Microsoft Corp., 56 F.3d, at 1461.
II. ANALYSIS

Terms and conditions incorporated in PFJ are clear and enforceable; so are compliance
mechanisms. The AAG conducted a good faith investigation, and uncovered that Publisher
Defendants conspired in violation of Section 1 of the Sherman Act. A detailed Complaint setting
out Publisher Defendant’s illegal activities was filed in district court, thereafter. Despite a good
faith effort to prevent Defendant from further participating in an illegal cartel, an important issue
remains: whether relief sought in PFJ fits the gravity of those claims alleged in the complaint. This

-6issue is central to the judicial inquiry the district court must conduct under the authority of the
APPA.
Unfortunately, there is no symmetry between relief sought in PFJ and the antitrust case
stated in the Complaint. Accordingly, we submit that consent to entry of PFJ should be withdrawn,
unless it contains an “asphalt clause”. Given the strength of the case stated in the Complaint and
the gravity of antitrust violation alleged therein — a nation wide price fixing conspiracy — PFJ
should provide relief commensurate therewith.
A.
Judging by the claims in the Complaint, the AAG has conducted an in-depth investigation.
We assume from the claims and relief sought in the Complaint that there is compelling evidence of
a serious antitrust offense. Evidence of an agreement is paramount to prove a violation of Section
1 of the Sherman Act. Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 763 (1984) (Powell,
J.) (“On a claim of concerted price-fixing, the antitrust plaintiff must present evidence sufficient to
carry its burden of proving that there was such an agreement”). See also Matsushita v. Zenith Ratio
Corp., 475 U.S. 574, 593 (1986) (Powell, J.). Proving the existence of an agreement in violation of
Section 1 of the Sherman Act may be an unsurmountable obstacle to prosecution.
But in this case, arguendo, there is substantial evidence of collusion in furtherance of a vast
price-fixing conspiracy. In fact, the Complaint points toward direct evidence of a conspiracy.
Complaint, ¶ 38. Solid evidence of a conspiracy to fix prices for e-books is supported, allegedly,
by conversations intercepted during meetings, phone calls, and lunches; besides, evidence is to be
found in emails and memoranda. Complaint, ¶¶ 37-40, 42-44, 49-51, 53-54, 57-58, 62-64, 69-73,
82, 87. The evidence above indicates, also, that those who participated in the illegal cartel had

-7“knowledge of the anticipated consequences” that would flow from their course of action. United
States v. United States Gypsum Co., 438 U.S. 422, 446 (1978) (Powell, J.). See also In Re:
Electronic Books Antitrust Litigation 859 F.Supp. 2d 671, 683 (2012) stay denied 2012 U.S. Dist.
LEXIS 90190 (S.D.N.Y., June 27, 2012).
Publisher Defendants have agreed to fix retail prices in the relevant market, out of fear that
“lower retail prices for e-books might lead eventually to lower wholesale prices for e-books, lower
prices for print books, or other consequences the publishers hoped to avoid”. Complaint, ¶ 3. The
agreement is horizontal, quintessentially: an agreement among competitors to preserve the wholesale
price structure for print and e-books, by setting retail prices for the latter. See United States v. Sealy,
Inc. 388 U.S. 350, 353-54 (1967) (Fortas, J.); United States v. Topco Associates, Inc. 405 U.S. 596,
608-609 (1972) (Marshall, J.). See also In Re: Electronic Books Antitrust Litigation 859 F.Supp.
2d, at 685.
In order to maintain the price structure for print and e-books at the wholesale level,
Publisher Defendants agreed on a scheme to control trade e-books’ retail prices in the United States,
using hardcover book list prices as a benchmark. Complaint, ¶ 68. To that end, “Publisher
Defendants teamed up with Defendant Apple”. Complaint, ¶ 3. The agreement between Publisher
Defendants was reached and implemented at retail “with no purpose except stifling of competition”.
White Motor Co. v. United States, 372 U.S. 253, 263 (1963) (Douglas, J.). Thus, we are in presence
of “a classic conspiracy in restraint of trade”. United States v. General Motors, Corp., 384 U.S. 127,
140 (1966) (Fortas, J.).

-8The agreement detailed in the Complaint is a naked horizontal price agreement, a per se offense
under Section 1 of the Sherman Act. Complaint, ¶ 99. Direct and indirect price fixing alike fall
under the per se standard. See United States v. Trenton Potteries Co., 273 U.S. 392 (1927) (fixing
price certain for commodity); United States v. Socony-Vaccum Oil Co., 310 U.S. 150 (1940)
(agreement among oil refiners to purchase surpluses on spot market to prevent price fall); Catalano,
Inc. v. Target Sales, Inc., 446 U.S. 643 (1980) (agreement to fix credit terms); Arizona v. Maricopa
County Med. Soc'y 457 U.S. 332 (1982) (agreement to fix maximum amount for claims under health
insurance plan).4
The trade e-books retail cartel is consolidated nation wide by vertical price-fixing. A
resale price maintenance scheme was implemented by way of a so-called “agency model”, whereby
Publisher Defendants set retailers’ pricing policy in the relevant market, according to terms and
conditions set forth in Apple Agency Agreements. Complaint, ¶¶ 5-7. By implementing the agency
model market wide,

Apple gained two advantages: (i) Firstly, a competition-proof retail

environment for the sale of e-books; (ii) secondly, guaranteed profit margins (30% commission and
most favored nation pricing commission). Complaint, ¶ ¶ 56, 60, and 65.
Publisher Defendants count among the Nation’s five most important trade e-book publishers
out of a total of six; they enjoy market power within the relevant market. Complaint, ¶¶ 29 and
101. The practice of resale price maintenance alleged in the complaint is suspicious under the rule
4

“The ostensible maximum prices included in the Apple Agency Agreements’ price schedule represent, in
practice, actual e-book prices. Indeed, at the time the Publisher Defendants snatched retail pricing authority away from
Amazon and other e-book retailers, not one of them has built an internal retail pricing apparatus sufficient to do anything
other than set retail prices at the Apple Agency Agreements’ ostensible cap”. Complaint, ¶ 90. The Agency Agreements
imposed on retailers by Publisher Defendants, through Apple, are nothing but an “actual or potential threat to the central
nervous system of the economy”. Socony-Vaccum Oil Co., 310 U.S., at 224 n. 59.

-9of reason, the legal standard for assessing the legality of vertical price-fixing. Leegin v. PSKS, Inc.,
551 U.S. 877, 897 (2007) (Kennedy, J.) (“Resale price maintenance should be subject to more
careful scrutiny ... if many competing manufacturers adopt the practice”) (references omitted). See
also Robert H. Bork The Antitrust Paradox (1978) at 294 (“[P]resence of an industry-wide pattern
of resale price maintenance should, as in the case of the dealer cartel, attract government attention”);
In Re: Electronic Books Antitrust Litigation 859 F.Supp. 2d, at 692-693.
The vertical price fixing scheme challenged in the complaint under Section 1 of the Sherman
Act is in all likelihood illegal. This kind of restraint “give[s] rise to an intuitively obvious inference
of anticompetitive effect”. California Dental Ass’n v. Federal Trade Commission 526 U.S. 756, 781
(Souter, J.). Pursuant to an “abbreviated or quick look analysis under the rule of reason, an observer
with even a rudimentary understanding of economics could conclude that the arrangements in
question would have an anticompetitive effect”. Ibid, at 770 (quotes omitted). A vertical price
fixing agreement designed to maintain a two-tier horizontal price fixing scheme (wholesale and
retail) is, by any standards, inimical to market principles protected by antitrust laws. See In Re:
Electronic Books Antitrust Litigation 859 F.Supp. 2d, at 692-693.
B.

In comments submitted last June, we argued that the Original Judgment should have prima
facie effect. Steerads (ATC-0374). The United States filed a response in U.S. District Court for the
Southern District of New York in opposition to an “asphalt clause”, on the ground that we
“[misread] the [APPA], which allows the use of a final judgment or decree as prima facie evidence
in other proceedings, but not if the consent judgment or decree is entered before any testimony has
been taken. Because no testimony has been taken in this litigation, the proposed Final Judgment

-10would not constitute prima facie evidence in any private litigation, regardless of how the decree is
worded” [brackets, quotes, italics and statutory references omitted]. Response of Plaintiff United
States to Public Comments on the proposed Final Judgment (July 23, 2012) at 46. We disagree.
For reasons stated in earlier comments, we submit that consent to PFJ should be
withdrawn, unless an “asphalt clause” is incorporated therein. In short, an “asphalt clause ... gives
a consent decree the effect of a litigated decree. It states that the defendant will not deny in any court
that the consent decree holds him prima facie liable in treble damages to any person who can prove
injury from the conduct alleged in the complaint” (italics omitted). Mark J. Green, Beverly C.
Moore, Jr., and Bruce Wasserstein, The Closed Enterprise System (1972) at 205 (citing United
States v. Lake Asphalt & Petroleum Co., 1960 Trade Cases ¶ 69,835 (D. Mass.); United States v.
Allied Chemical Corp., 1961 Trade Cases ¶ 69,923 (D. Mass.); United States v. Bituminous Concrete
Ass’n, 1960 Trade Cases ¶ 69,878 (D. Mass.).
An “asphalt clause” would compel Defendant, simply, to waive all statutory limitations set
forth in the APPA (15 U.S.C. § 16 (a)) — specifically, the provision preventing consent judgment
from having prima facie effect. The proposed relief establishes a mere presumption in favor of
persons injured by Defendant’s conduct; Defendant would then have the burden of rebutting the
presumption while the burden of persuasion would remain on those seeking damages. Fed. R.
Evidence 301. See also Herbert Hovenkamp Federal Anittrust Policy (4th Ed.) (§ 16.8d.) (“[The]
prima facie evidence rule applies only to matters that were put in issue, explicitly decided and
necessary to the outcome. Even then, the statute creates only a rebuttable presumption in the
plaintiff’s favor”). The presumption is not conclusive, refuting any argument that an “asphalt
clause” would be unfair to Defendant.

-11Consumers were overcharged in the amount of tens of millions of dollars as a result of
Publisher Defendants’ conduct. Complaint, ¶ 10. Neither PFJ nor the Original Judgment provides
compensatory relief. A multidistrict class action was filed by class representatives “on behalf of
themselves and others who paid higher prices for their electronic books ... as a direct and foreseeable
result of defendants’ allegedly unlawful conduct”. In Re: Electronic Books Antitrust Litigation, 859
F.Supp. 2d 671, 673 (S.D.N.Y. 2012) stay denied 2012 U.S. Dist. LEXIS 90190 (S.D.N.Y., June 27,
2012). The U.S. District Court for the Southern District of New York denied defendants’ motions
to dismiss, ruling instead that “the Complaint survives the test imposed by Rule 12 (b) (6) and states
a Sherman Act violation”. Ibid., at 689.
In addition, sixteen (16) state attorney generals have filed civil actions, parens patriae. Those
civil actions are pending in the U.S. District Court for the Western District of Texas. 859 F.Supp
2nd, at 680. The multidistrict antitrust class action provides an opportunity to send a clear message
that price fixing is unprofitable. An asphalt clause is the best way to achieve deterrence, at very low
cost to the Department of Justice. It would maximize allocation of scarce resources available to
enforce antitrust laws; judicial resources would be saved, too. Antitrust plaintiffs would enjoy a
presumption; this would simplify the adjudication of a nation wide complex multidistrict class
action. An “asphalt clause” is the most indicated and effective relief under the circumstances.5

5

On February 8, 2013, the United States Department of Justice announced in a news release that it had
reached a settlement with MacMillan, in the above captioned matter. Justice Department Reaches Settlement With
Macmillan in E-Books Case, (February 8, 2013). On the same day, MacMillan’s CEO, John Sargent, explained in an
online written statement to “authors, illustrators and agents” why the company had agreed to settle the case.
www.jurist.org “Macmillan Settles e-Books Case With DOJ” (February 08, 2013)[tor.com blog]. Mr. Sargent
explained that MacMillan “ agreed to settle our case with the DOJ ... because the potential penalties became too high
to risk even the possibility of an unfavorable outcome”. He added: “Our company is not large enough to risk a worst
case judgment. In this action the government accused five publishers and Apple of conspiring to raise prices. As each
publisher settled, the remaining defendants became responsible not only for their own treble damages, but also possibly
for the treble damages of the settling publishers (minus what they settled for). A few weeks ago I got an estimate of the

-12There is another issue: collateral. Parklane Hosiery Co. v. Shore 439 U.S. 322 (1979).
Under the rule governing collateral estoppel, “a defendant who had a full and fair opportunity to
litigate issues in one proceeding could be precluded from relitigating them in a later collateral
proceeding to which he is also a party” (emphasis added) Hovenkamp, supra, § 16.8d. A legal
doctrine “more powerful than Clayton § 5 (a)”, collateral estoppel has “a broader domain”. Ibid.
PFJ is a pre-trial settlement. As stipulated in PFJ’s Whereas clause: “ this judgment does not
constitute any admission by Penguin that the law has been violated or of any issue of fact or law,
other than the jurisdictional facts as alleged in the Complaint are true”. Defendant did not have a
“full and fair opportunity” to litigate any claims in the Complaint; therefore, a condition precedent
to the application of collateral estoppel is absent.
C.

We share the AAG’s concern to “quickly restore retail price competition to consumers”.
Competitive Impact Statement, Section IV. Still, expediency shall not trump efficient and vigorous
enforcement, especially where the antitrust violation unearthed is serious, and the amount of
interstate commerce involved substantial. The Clayton Act provides preliminary injunction relief,
15 U.S.C. § 25 — a speedy and effective remedy. Arguendo all four requirements for the issuance
of a preliminary injunction are met: Likelihood of success on the merits; likelihood of irreparable
harm; the balance of equities favors granting a preliminary injunction; and, the public interest in
maintaining competition in the relevant market. Winter v. Natural Resources Defense Council, 555

maximum possible damage figure. I cannot share the breathtaking amount with you, but it was much more than the entire
equity of our company”. Ibid.

-13U.S. 7, 20-21 (2008) (Roberts, C.J.).6
Another important point deserves comments. The AAG is reviewing currently a proposed
joint venture between Defendant and Random House Inc., the largest book publisher in the United
States. Justice Department Reaches Settlement With Penguin Group (USA) Inc. in E-Books Case
(December 18, 2012). The terms of the proposed venture are unknown to the public; but, it raises
serious antitrust concerns, no matter the motivations behind it. Merger Enforcement Guidelines
(August 19, 2010) § 7.2. (“The agencies presume that market conditions are conducive to
coordinated interaction if firms representing a substantial share in the relevant market appear to have
previously engaged in express collusion affecting the relevant market, unless competitive conditions
in the market have since changed significantly”).7
The joint venture under review could affect the effectiveness of PFJ. Texaco Inc. v.
Dagher, 547 U.S. 1, 7 (2006). (“As a single entity, a joint venture, like any other firm, must have
the discretion to determine the prices of the products it sells, including the discretion to sell a product
under two different brands as a single, unified price”). See also, Brooke Group Ltd. v. Brown &
Williamson Tobacco Corp. 509 U.S. 209, 227 (1993) (Kennedy, J.). (“Tacit collusion, sometimes
called oligopolistic price coordination or conscious parallelism, describes the process, not in itself
unlawful, by which firms in a concentrated market might in effect share monopoly power, setting
their prices at a profit-maximizing, supracompetitive level by recognizing their shared economic
interests and their interdependence with respect to price and output decisions”). See however,

6

A preliminary injunction would have strengthened the bargaining position of the AAG, considerably. Usually,
a preliminary injunction seals the fate of an antitrust case.
7

Arguendo Defendant played a significant role in the implementation of the agreement to fix prices in the
relevant market. Complaint, ¶¶ 41-43, 49, 57, 59, 62, 64, 70,72-73, 86-88.

-14American Tobacco Co. v. United States 328 U.S. 781, 804-808 (1946) (Burton, J.).
The proposed joint venture could hardly yield procompetitive benefits, as each entity has
ample financial resources and technical expertise to compete on its own. Those entities can develop
new products and innovate without cooperation. Defendant and Random House have a very high
burden: they ought to provide clear and convincing evidence of economic necessity. Texaco Inc.,
547 U.S., at 6 n.1. (“We presume for purposes of these cases that [this] is a lawful joint venture.
Its formation has been approved by federal and state regulators, and there is no contention here that
it is a sham”).
Consent judgment is a valuable enforcement mechanism. We agree that consent judgment
saves litigation costs and delays. Response of Plaintiff United States to Public Comments on the
proposed Final Judgment (July 23, 2012) at 46; it is speedy and may be cost effective. Consent
judgment should be used selectively, however. A settlement agreement embodied in a consent
judgment is more appropriate in a situation where the government’s case is “weak ”, Microsoft
Corp., 56 F.3d, at 1461; or, where the practice’s anticompetitive effect must be assessed under the
rule of reason. This is not such a case.
CONCLUSION

For the foregoing reasons we respectfully submit that consent to the PFJ should be
withdrawn, unless Defendant agrees on an “asphalt clause” .

-15Submitted this February 14 , 2013.

Daniel Martin Bellemare
DANIEL MARTIN BELLEMARE
ATTORNEY AT LAW

Vermont Bar # 3979
Québec Bar 184129-7
1010 Sherbrooke Street West Suite 2200
Montréal, Québec,
Canada H3A 2R7
Tel: [phone]
[e-mail]
Counsel to Steerads Inc.
_____/s/_________
BENJAMIN MASSE

3535 Queen Mary Street Suite 200
Montréal, Québec
Canada H3V 1H8

President Steerads Inc.

TO:

John R. Read
Chief, Litigation III Section,
Antitrust Division, Department of Justice
Washington D.C. 20530