In antitrust trial, who are Apple’s victims?
Apple is on trial in Manhattan on antitrust charges brought by the U.S. Department of Justice. An obvious question arises: Exactly whose rights were violated by Apple’s conduct? Problem is, there’s no obvious answer.
First, the basics. In early 2010, Apple made contracts with five big publishers of e-books. Apple agreed to sell the e-books retail through its new iBookstore, at prices set by the publishers ($13-$15). In exchange Apple would keep a 30 percent commission on each sale.
That’s basically it. Now, whose rights were violated? The DOJ’s case is based on the idea that the victims were “consumers,” who would now pay higher prices for e-books. Up till then, Amazon had been selling them as loss leaders (around $10, at or below cost) to drive sales of its Kindle e-reader.
But consumers have no right to demand that products be sold at the prices they desire. A prospective buyer’s only right on a free market is to purchase at the offered price. For the government to act as a wish-granting genie, coercively preventing prices from exceeding consumer’s desires, not only violates the property rights of businesses but also, if done consistently, would destroy the pricing mechanism and generate economic chaos.
But of course, nobody believes in principles anymore, least of all antitrust enforcers. They just do as much as they can get away with—or, to be more precise, as much as we the citizens let them get away with—including the persecution of America’s top companies for conduct that has no victims.