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

Filing 286

MEMORANDUM OF LAW in Support re: 285 MOTION for Entry of Judgment under Rule 54(b) and 15 U.S.C. § 16(b)-(h).. Document filed by Unites States of America. (Attachments: # 1 Exhibit A - Proposed Macmillan Final Judgment, # 2 Exhibit B - Certificate of Compliance)(Fairchild, Stephen)

UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
__________________________________________
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UNITED STATES OF AMERICA,
)
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Plaintiff,
) Civil Action No. 12-CV-2826 (DLC)
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v.
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) ECF Case
APPLE, INC., et al.,
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Defendants.
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__________________________________________)
MEMORANDUM IN SUPPORT OF MOTION BY THE UNITED STATES
FOR ENTRY OF THE PROPOSED MACMILLAN FINAL JUDGMENT
Pursuant to Section 2(b) of the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16(b)(h) (“APPA” or “Tunney Act”), the United States moves for entry of the proposed Final
Judgment as to Defendants Verlagsgruppe Georg von Holtzbrinck GmbH and Holtzbrinck
Publishers, LLC d/b/a Macmillan (collectively, “Macmillan”). The proposed Final Judgment as
to Macmillan (“proposed Macmillan Final Judgment”), attached as Exhibit A, may be entered at
this time without further hearing if the Court determines that entry is in the public interest. The
Competitive Impact Statement filed by the United States on February 8, 2013 (Docket No. 175),
and Response to Comments filed by the United States on May 24, 2013 (Docket No. 261),
explain why entry of the proposed Macmillan Final Judgment is in the public interest. The
United States has attached to this Memorandum as Exhibit B a Certificate of Compliance setting
forth the steps taken by the parties to comply with all applicable provisions of the APPA, and
certifying that the statutory waiting period has expired.

I.

BACKGROUND

On April 11, 2012, the United States filed a civil antitrust Complaint alleging that Apple,
Inc. (“Apple”) and five of the six largest publishers in the United States (“Publisher
Defendants”) conspired to raise prices of electronic books (“e-books”) in the United States in
violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. This court entered a Final Judgment
(“Original Final Judgment”) as to three settling Publisher Defendants, Hachette Book Group,
Inc., HarperCollins Publishers L.L.C., and Simon & Schuster, Inc., on September 6, 2012
(Docket No. 119), and entered a Final Judgment (“Penguin Final Judgment”) as to Defendants
The Penguin Group, a division of Pearson PLC, and Penguin Group (USA), Inc. on May 17,
2013 (Docket No. 259).
On February 8, 2013, the United States reached a settlement with Macmillan on
substantially the same terms as those contained in the Original Final Judgment and the Penguin
Final Judgment, and filed the proposed Macmillan Final Judgment and a Stipulation signed by
the United States and Macmillan consenting to the entry of the proposed Macmillan Final
Judgment after compliance with the APPA (Docket No. 174).
II.

COMPLIANCE WITH THE APPA

The APPA requires a sixty-day period for the submission of public comments on a
proposed Final Judgment. See 15 U.S.C. § 16(b). In compliance with the APPA, the United
States filed its Competitive Impact Statement (“CIS”) with the Court on February 8, 2013
(Docket No. 175); published the proposed Final Judgment and CIS in the Federal Register on
February 25, 2013, United States v. Apple, Inc., et al., 78 Fed. Reg. 12874; and summaries of the
terms of the proposed Macmillan Final Judgment and CIS, together with directions for the
submission of written comments relating to the proposed Final Judgment, were published in the

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Washington Post and the New York Post for seven days beginning on February 21, 2013 and
ending on February 27, 2013. Macmillan filed the statement required by 15 U.S.C. § 16(g) on
April 15, 2013 (Docket No. 202). The sixty-day period for public comments ended on April 28,
2013. The United States received one comment, the response to which was filed with the Court
on May 24, 2013 (Docket No. 261), and published in the Federal Register on June 4, 2013, see
78 Fed. Reg. 33437. The Certificate of Compliance filed with this Memorandum as Exhibit B
recites that all the requirements of the APPA have now been satisfied. Following any briefing by
other parties, as permitted by the Court’s February 19, 2013 Order (Docket No. 180), it will be
appropriate for the Court to make the public interest determination required by 15 U.S.C. § 16(e)
and to enter the proposed Macmillan Final Judgment.
III.

STANDARD OF JUDICIAL REVIEW

The Clayton Act, as amended by the APPA, requires that proposed consent judgments in
antitrust cases brought by the United States be subject to a sixty-day public comment period,
after which the Court shall determine whether entry of the proposed Final Judgment “is in the
public interest.” 15 U.S.C. § 16(e)(1). In making that determination in accordance with the
statute, the Court shall consider:
(A) the competitive impact of such judgment, including termination of alleged
violations, provisions for enforcement and modification, duration of relief sought,
anticipated effects of alternative remedies actually considered, whether its terms
are ambiguous, and any other competitive considerations bearing upon the
adequacy of such judgment that the court deems necessary to a determination of
whether the consent judgment is in the public interest; and
(B) the impact of entry of such judgment upon competition in the relevant market
or markets, upon the public generally and individuals alleging specific injury from
the violations set forth in the complaint including consideration of the public
benefit, if any, to be derived from a determination of the issues at trial.
15 U.S.C. § 16(e)(1).

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In its Opinion and Order finding that the Original Final Judgment satisfied the
requirements of the Tunney Act, this Court articulated the public interest standard under the
APPA. See United States v. Apple, Inc., 889 F. Supp. 2d 623, 630-32 (S.D.N.Y. 2012). The
public has had the opportunity to comment on the proposed Macmillan Final Judgment as
required by law. As explained in the CIS and the Response to Comments, entry of the proposed
Macmillan Final Judgment meets the standard articulated by the Court and is in the public
interest. The United States therefore requests that, following any briefing by other parties, this
Court enter the proposed Macmillan Final Judgment. 1
IV.

CONCLUSION

For the reasons set forth in this Memorandum, the CIS, and the Response to Comments,
the Court should find that entry of the proposed Macmillan Final Judgment is in the public
interest and enter the proposed Macmillan Final Judgment.
Dated: June 12, 2013
Respectfully submitted,

s/Mark W. Ryan
Mark W. Ryan
Lawrence E. Buterman
Stephen T. Fairchild
Attorneys for the United States
United States Department of Justice
Antitrust Division
450 Fifth Street, NW, Suite 4000
Washington, DC 20530
[phone]
[e-mail]

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Because the proposed Macmillan Final Judgment does not apply to all defendants in this action, it may be entered
only if the Court “expressly determines that there is no just reason for delay.” Fed. R. Civ. P. 54(b). This Court has
already entered Final Judgments as to four Publisher Defendants and there is no reason for the Court to delay entry
of the proposed Macmillan Final Judgment, completing the entry of relief as to all Publisher Defendants in this case.

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CERTIFICATE OF SERVICE
I, Stephen T. Fairchild, hereby certify that on June 12, 2013, I caused a copy of the
Memorandum in Support of Motion of the United States for Entry of the Proposed Macmillan
Final Judgment to be served by the Electronic Case Filing System, which included the
individuals listed below.

For Apple:
Daniel S. Floyd
Gibson, Dunn & Crutcher LLP
333 S. Grand Avenue, Suite 4600
Los Angeles, CA 90070
[phone]
[e-mail]

For Hachette:
Walter B. Stuart, IV
Freshfields Bruckhaus Deringer LLP
601 Lexington Avenue
New York, NY 10022
[phone]
[e-mail]

For Macmillan and Verlagsgruppe Georg
Von Holtzbrinck GMBH:
Joel M. Mitnick
Sidley Austin LLP
787 Seventh Avenue
New York, NY 10019
[phone]
[e-mail]

For HarperCollins:
Paul Madison Eckles
Skadden, Arps, Slate, Meagher & Flom
Four Times Square, 42nd Floor
New York, NY 10036
[phone]
[e-mail]

For Penguin U.S.A. and the Penguin Group:
Daniel F. McInnis
Akin Gump Strauss Hauer & Feld, LLP
1333 New Hampshire Avenue NW
Washington, DC 20036
[phone]
[e-mail]

For Simon & Schuster:
Yehudah Lev Buchweitz
Weil, Gotshal & Manges LLP (NYC)
767 Fifth Avenue, 25th Fl.
New York, NY 10153
[phone] x8256
[e-mail]

Additionally, courtesy copies of this Memorandum in Support of Motion of the United
States for Entry of the Proposed Macmillan Final Judgment have been provided to the following:

For the State of Connecticut:
W. Joseph Nielsen
Assistant Attorney General
Antitrust Division
Office of the Attorney General
55 Elm Street
Hartford, CT 06106
[phone]
[e-mail]

For the State of Texas:
Gabriel R. Gervey
Assistant Attorney General
Antitrust Division
Office of the Attorney General of Texas
300 W. 15th Street
Austin, Texas 78701
[phone]
[e-mail]

For the Private Plaintiffs:
Jeff D. Friedman
Hagens Berman
715 Hearst Ave., Suite 202
Berkeley, CA 94710
[e-mail]
[phone]

s/Stephen T. Fairchild
Stephen T. Fairchild
Attorney for the United States
United States Department of Justice
Antitrust Division
450 Fifth Street, NW, Suite 4000
Washington, DC 20530
[phone]
[e-mail]

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