Bob Kohn Appeals Macmillan, Penguin eBook Settlements – Could he be a Cats-Paw for the Publishers?

Never onebob1[1] to take NO for an answer, RoyaltyShare founder Bob Kohn filed an appeal today over the recently approved settlement agreements between Macmillan and Penguin and the DOJ.

It seems that Mr. Kohn wasn't satisfied when Judge Denise Cote ignored his amicus curae pre-trial filing in September 2012, and he wasn't satisfied when the judge shot him down when he made the same arguments in a post-trial session last month, becasue he was back _again_ last week with a new filing that made the same old arguments.

This time around it's an appeal filing, and not the 5 page comic which Mr. Kohn filed in September of last year.

If you're just tuning in, for the past 15 months Bob Kohn has been arguing that the publishers and Apple didn't break the Sherman Anti-Trust law when they conspired in late 2009 to raise ebook prices and force Amazon to let the publishers set the retail price.

Instead, what they did was completely legal because they were collectively responding to Amazon's supposed violations of anti-trust law: to wit, the alleged predatory pricing which everyone has assumed occurred before agency pricing.

Yes, it's the old "two wrongs make a right" argument. There is some legal basis for this argument in anti-trust law, but in order to make the argument you also have to present evidence to support it, and Bob Kohn ain't got none.

Mr. Kohn is claiming that the alleged predatory pricing was an anti-trust violation. But since he has no evidence of predatory pricing and since the publishers have no evidence (they certainly didn't present any at trial) to show the same, Mr. Kohn has been pestering the judge to force the DOJ to reveal the results of their investigation into Amazon's pre-agency pricing.

Twice he has pestered the judge on this topic, and he's been shot down twice so far. How much do you want to bet that he will be shot down a third time?

I would say the odds are pretty good, but then again this is the type of issue which could overturn the case on appeal. It's entirely possible that an appeal court judge might rule that Judge Cote should have considered this point.

But I also do not think that appeal has a good chance of being accepted.  The original complaint (aka indictment) filed by the DOJ said that Amazon's ebook operation was consistently profitable, and Judge Cote reiterated that statement in the September 2012 ruling (PDF) which signed off on the settlement agreement between the DOJ and S&S, Hachette, HarperCollins:

Even though the $9.99 retail price point was close to the wholesale price at which Amazon purchased many e-books, the Complaint alleges that Amazon’s e-books business was “consistently profitable.” In order to compete with Amazon, other e-books retailers also adopted a $9.99 retail price for many titles.

Also, I would have you note that Bob Kohn is arguing this point in defense of 5 publishers who _settled_ rather than try to make this argument themselves. That includes Macmillan, which settled while still claiming that they had done nothing wrong.  If Macmillan had the evidence to support Kohn's argument don't you think they would have gone to trial and defended themselves?

And that's not all. I would like to remind you that the original indictment against Apple and the 5 publishers was filed by the US Dept of Justice in cooperation with over 40 state's attorneys general. Do you really think that all of the hundreds of lawyers involved simply forgot to consider the points which Bob Kohn has raised repeatedly?

And that's not even the best part. Mr. Kohn is not in any way involved with the 5 publishers in question, so he has literally no legal basis to file an appeal. But never mind that, he argues that if he is not given standing to appeal, the settlements will not face any appeal scrutiny at all on behalf of consumers.

Funny, I thought that the DOJ and state's attorneys general were acting on behalf of the consumers/public?

I don't know about you but at this point I have to wonder exactly why Bob Kohn is continuing to beat this dead horse. I suspect that he is being egged on by one or more of the 5 publishers. They cannot be seen to pursue this argument themselves but I am sure they would be happy if Kohn succeeded.

Update: I've already been yelled at once this morning and told that I obviously OBVIOUSLY don't know Bob Kohn, so my speculation could be off. But that does not change the fact that at this point we need to consider exactly what Mr. Kohn is trying to accomplish.

PW

4 thoughts on “Bob Kohn Appeals Macmillan, Penguin eBook Settlements – Could he be a Cats-Paw for the Publishers?

      1. Thought so.
        I’d say his crusade is neither about publishers or readers but about him.
        Or the Judge…
        He might be stalking her. ;)

  1. Nate, Kohn’s been turned down at least once by the appeals court on the basis of standing–he’s not a party to the case, so he has no standing to appeal the ruling. (Simply being a consumer who buys (or doesn’t buy) eBooks doesn’t give you the right to appeal Judge Cote’s ruling.) Macmillan and Penguin Random House are free to appeal, because they’re parties to the case, but Kohn isn’t, and it’s likely that any further filings by Kohn will be disregarded for the same reason.

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