Platform Competition, the Apple Ebooks Case and the Meaning of Agreement to Fix Prices

The Economics of Adaptation and Long-term Relationships (Edward Elgar, March 2019); ISBN: 978 1 84980 037 2

Posted: 3 May 2019

Date Written: March 29, 2019

Abstract

Looking out on the devastation wrought by the English Civil Wars, political philosophers found themselves contemplating how to harness collective action to obviate problems of collective irrationality. With the advent of competition law more than two centuries later, American courts were situated to take up certain manifestations of collective action: those that obtain from “conspiracy” to restrain trade. Building on the game theory advances of 1950, economists found ways to characterize the governance of antitrust conspiracies as the mechanisms by which conspirators harness collective action among themselves to obviate, or at least mitigate, their own problems of collective irrationality (profit-diminishing competition). Characterization of the governance of conspiracies can impose structure on the meaning of “agreement” in the antitrust case law to unreasonably restrain trade. From a governance perspective, the district court’s analysis of “agreement” in the Apple eBooks price-fixing case, 952 F.Supp.2d 638 (S.D.N.Y. 2013), would appear truncated to the point of being stillborn.

Keywords: antitrust conspiracy, collusion, collective action, strategic uncertainty, Amazon, Apple Inc.

JEL Classification: K21, D74, D43

Suggested Citation

Williamson, Dean V., Platform Competition, the Apple Ebooks Case and the Meaning of Agreement to Fix Prices (March 29, 2019). The Economics of Adaptation and Long-term Relationships (Edward Elgar, March 2019); ISBN: 978 1 84980 037 2, Available at SSRN: https://ssrn.com/abstract=3363649

Dean V. Williamson (Contact Author)

Independent ( email )

Washington, DC
United States

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