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CEI Weekly: Justice Department Sues Apple Over E-Books 

Friday, April 13, 2012



Feature: The Justice Department has filed a lawsuit against tech giant Apple and several publishers.

FEATURE: Justice Department Sues Apple Over E-Books


This week, the U.S. Justice Department filed a lawsuit against Apple and several publishers over the companies' E-Book pricing arrangement. Apple currently takes 30 percent from e-book sales on Apple devices--and because of its deal with publishers, competitors like Amazon can't price e-books below specified prices. CEI released a statement calling the suit a mistake. Read the statement here. Also, see Wayne Crews' Forbes column on the issue: "Why is Apple Getting Cored in Washington?"







Crony Capitalism

Fred L. Smith's latest vodcast


Fixing America's Crumbling Underground Water Infrastructure

Bonner Cohen's study


On the Waterfront

Trey Kovacs and Jack Mann's op-ed in The New York Post


Walker's Reforms Stand Up in Court, On Balance Sheets

Iain Murray and Vincent Vernuccio's op-ed in The Washington Examiner


Free-Market Environmentalism? It'll Never Fly, Orville!

Wayne Crews' column in Forbes


A Free Market Defense of Retransmission Consent

Ryan Radia's post on Technology Liberation Front


Apple Investors Shrug Off E-Book Antitrust Lawsuit

Ryan Young's citation in Investor's Business Daily


Critical Drug Shortages Reaching Crisis

Greg Conko's citation by the Heartland Institute


How Will Law Grads Repay Their Loans?

Hans Bader's citation in National Review


Louisiana's Taxpayer-Funded Public Employee Contracts Could Be Opened to Public Scrutiny

Vincent Vernuccio's citation in The Pelican Post


Why the Rush? Re: Solyndra Loan

Marlo Lewis' interview on OneNewsNow







April 12, 2012: Apple, E-Books, and Antitrust


Yesterday the Justice Department sued Apple and five major publishers over their e-book pricing model, alleging price fixing. Associate Director of Technology Studies Ryan Radia thinks the lawsuit is a mistake, and should be dropped.


CEI Today: Law school debt, drug shortages, and CEI's Warren Brookes Journalism Fellowship

LAW SCHOOL DEBT  - HANS BADER Staggering Law School Debts Will Lead to Exploding Debt Disaster for Graduates and Taxpayers

Federal financial aid policies have encouraged law students to borrow increasing amounts to attend law school, despite the glut of lawyers (oddly, government policies encourage more people to go to law school, driving up law school tuition, even as the Obama administration seeks to cut back on vocational education aimed at training the skilled blue-collar workers who are in desperately short supply in much of the country). The result, says law professor Brian Tamanaha, is a “Quickly Exploding Law Graduate Debt Disaster” in which most recent graduates of many law schools will never be able to pay off their staggering student loan debt. > Read the full story on

> Interview Hans Bader


Critical Drug Shortages Reaching Crisis


CEI Senior Fellow Greg Conko explains why forcing drug companies to inform the FDA when a shortage of a key drug is impending would be of little help.

“To some extent, these measures may help, but the FDA has taken some modest steps on its own to address some of the most problematic shortages. And nothing in the legislation is likely to change the fundamental nature of how the agency operates. Nor would any of the bills address the fundamental underlying economic considerations that are the primary cause of the shortages,” Conko told the Heartlander.

Conko says delays in the FDA’s approval process and overly strict regulation of drug manufacturing facilities are the primary culprits for drug shortages.

“Drug shortages are a real problem. But the way to alleviate them is not to eliminate the market signals that incentivize adequate production,” said Conko. “In the end, we would be better off if Congress did nothing at all. Better still, though, would be for Congress to lift the rules that have contributed to the shortages in the first place.” > Read the full news article on

> Interview Greg Conko



The Competitive Enterprise Institute offers a one-year fellowship for journalists seeking to improve their knowledge of the principles of free markets and limited government.  The fellowship is named in honor of the late Warren T. Brookes (1929-1991), a nationally syndicated columnist known for his tradition of reporting from a sound scientific and economic perspective. 

CEI established the Warren T. Brookes Fellowship to inspire new generations of journalists to learn from Brookes’s legacy and to benefit from CEI’s free market, public policy environment. Through the fellowship program, CEI identifies both talented young people and experienced journalists who wish to improve their knowledge of policy issues and free market economics. The fellowship provides an opportunity for young writers to hone their skills while immersing themselves in public policy issues. For more experienced journalists, the fellowship affords a chance to work on longer projects, such as books, or in-depth investigative pieces, without the pressure of regular deadlines.

Previous Warren T. Brookes Fellows have included columnist Reason Magazine senior editor Brian Doherty and science correspondent Ron Bailey, syndicated columnist Michelle Malkin, Washington Examiner columnist Timothy Carney, and best-selling author James Bovard.

Applicants should submit a proposal for a year-long project that is related to CEI’s issue advocacy work, along with résumé, cover letter, and writing samples (op-eds and articles).  The 2012-13 fellowship begins in October, 2012.

For more information or to apply, contact:


Also featuring...

EPA Math: Nothingness in North Dakota Is Worth $12 Million/Year

Sources of Economic Error

Regulation of the Day 217: Being Rude


CEI Today: DOJ's Apple lawsuit, union corruption, and EPA's fight against federalism 

DOJ SUES APPLE  - WAYNE CREWS & RYAN YOUNG Justice Department Should Drop Apple Lawsuit

The Justice Department sued Apple and several publishers on Wednesday, alleging the firms colluded over e-book pricing. CEI policy experts Wayne Crews and Ryan Young believe the lawsuit is a mistake.

Wayne Crews, Vice President for Policy: “The complaint against Apple seems to be that collusion and smoke-filled rooms paved the way to a deal by which Apple gets a 30 percent cut of the publishers' e-books sold for Apple devices, while other vendors are forbidden from selling below that pre-specified price. Such ordinary business deals, you see, involve a now-disparaged free market instrument called a ‘contract.’

“This arrangement appears to have been a normal response to Amazon's deep discounts of e-books below physical book prices. DoJ's solution is presumably to stop free enterprise, and allow Amazon to dominate e-books? Now, thanks to DoJ getting involved, competitors need not respond to to Apple and the publishers to better serve consumers and shareholders.”

 > Read the full comment on

> Interview Wayne Crews or Ryan Young



New York Post:
On the waterfront - Mob stench still fouls New York Harbor

As he tries to clean house at the bloated Port Authority of New York and New Jersey, new PA chief Pat Foye’s thorniest problem will be the docks — where the International Longshoremen Association fights to preserve the old, corrupt ways.

Some of the outrages are outlined in last month’s report from the bistate Waterfront Commission, which found the port’s financial and management practices to be “dysfunctional.” Others have turned up in court testimony.

How bad is it? Consider: Last year, the Port Authority, in accordance with state regulations, asked the ILA for a list of candidates to fill 60 baggage-handler and driver positions. The union’s list turned out to have just one non-white on it.


That prompted the Waterfront Commission, which is mandated to ensure fair-hiring practices, to ask the ILA to certify that it doesn’t discriminate against minorities. > Read more at

> Interview Trey Kovacs


EPA vs THE STATES - WILLIAM YEATMAN How EPA Uses “Sue and Settle” Agreements To Steal Power from the States (and what the Congress is doing to stop it)


In late March, the House Judiciary Committee passed H.R. 3862, the Sunshine for Regulatory Decrees and Settlements Act of 2012, by a 20-10 vote. If enacted, the bill would make it more difficult for the Environmental Protection Agency to negotiate “sue and settle” agreements that effectively exclude States from environmental policymaking, in seeming contravention of the Clean Air Act. By making these “sue and settle” agreements more transparent, H.R. 3862 would spur a welcome rebalancing of American environmental federalism.  > Read the full commentary on

> Interview William Yeatman


Also featuring...

Study Calls for "Cost-Effective" Water Infrastructure Upgrades

A Free Market Defense of Retransmission Consent

San Francisco Judge Dismisses Lawsuit against McDonald’s over Happy Meals


CEI Today: EPA price for nothing, free market environmentalism, and law school subsidies

EPA HAZE RULE  - WILLIAM YEATMAN EPA Math: Nothingness in North Dakota Is Worth $12 Million/Year

How much would you pay for nothing? Personally speaking, I wouldn’t pay a single cent for zero returns, and I think most Americans would agree. It is this shared sentiment that compels me to feel bad for North Dakotans, because EPA is forcing them to pay $12 million annually, for nothing.

I am not exaggerating. EPA last Friday promulgated a final Regional Haze regulation for North Dakota, which requires almost $12 million in annual compliance costs, in exchange for “benefits” that are literally invisible.

I’ve written about the Regional Haze rule many times before on this blog (see here, here, here, and here). It was created by the Congress in 1977 amendments to the Clean Air Act. Its purpose is to improve visibility at federal national parks and wilderness areas. The hallmark of the Regional Haze provision is the unique degree of primacy accorded to the States over EPA. Because Regional Haze is an aesthetic regulation—and not a public health regulation—the Congress intended for the States to be the lead decision makers. > Read the full story on


> Interview William Yeatman


Free Market Environmentalism? It'll Never Fly, Orville!


Much has been written over the role of increased wealth in advancing environmental health: think sanitation, reduced waste, streamlined manure-free transportation; even the green-ness of cities compared to their reputation.

Still, the presumption remains that free market capitalism pollutes and destroys; that “sustainable development” is something other than what markets can do of their own accord.

A problem with this impression is that most areas where environmental destruction is rampant are those where property rights are absent or confused, and a “tragedy of the commons” prevails: Airsheds, watersheds, public lands, endangered species come to mind. > Read the full commentary on

> Interview Wayne Crews


Grow Economy by Cutting Law School Subsidies

Under the Obama administration, the Education Department has poured increasing amounts of financial aid into law schools, while seeking to cut vocational education needed to train certain kinds of skilled factory workers who are in short supply, impeding the expansion of factory operations that would also provide jobs to many unskilled workers.

The leftist law professors who dominate many law schools openly teach law students a
contempt for property rights, the rule of law, and the free-market system, telling them that a lawyer’s role is to be “either a social engineer or a parasite on society.” Many law schools are more like incubators of evil than centers of learning. Based on my experience as a graduate of Harvard Law School, much of what law schools teach their students is useless drivel, as some law professors themselves have conceded. Imagine how much more economic growth there could be if taxpayers no longer subsidized law schools and their indoctrination of students in left-wing group-think. > Read more at

>Interview Hans Bader


Also featuring...

Further Space Property Rights Responses

OFFSHORE WIND SAVES BILLION$*!!! (*but only if you ignore the exorbitant cost of offshore wind)

House Natural Resources Committee Subpoenas Interior Department over Radical Rewrite of Mining Law

Regulation of the Day 217: Being Rude


CEI Today: Collective bargaining case in court, Solyndra audit, and EPA fracking fail

COURT RULES ON LABOR UNION CASE  - IAIN MURRAY AND F. VINCENT VERNUCCIO Walker's reforms stand up in court, on balance sheets

U.S. District Court for the Western District of Wisconsin Judge William Conley ruled that [Wisconsin] could limit collective bargaining for government employees and protect the workers' right to not pay union dues while still keeping their jobs. However, he also ruled that the state could not require unions to be recertified every year or prohibit dues deductions from government paychecks.

The key point was not the merits of Act 10 but the fact that they were not universally applied. The court ruled that the recertification and dues deduction provisions violated the First Amendment and Equal Protection Clause of the Constitution because they exempted public safety unions. They might have been ruled constitutional were they applied to all union members. > Read the full story on

> Interview Iain Murray or Vincent Vernuccio

> Keep up with labor union news at


Treasury OIG: Watchdog Pussyfoots Around Solyndra Debacle

Last week, the Treasury Department’s Office of Inspector General (OIG) released an audit report on Treasury’s role in reviewing, in March 2009, the Department of Energy’s (DOE’s) $535 million loan guarantee to Solyndra, the solar panel manufacturer that filed for bankruptcy in September 2011. Before going belly up, Solyndra burned through $528 million of the $535 million it received from Treasury’s Federal Financing Bank (FFB). Nearly all of the defaulted loan will be paid off by American taxpayers. > Read more at

>Interview Marlo Lewis


EPA Sweeps Another Fracking Fail under the Rug


The EPA recently informed Range Resources that it was dropping its order to a Fort Worth, Texas-based natural gas company to provide drinking water to residents in Parker County.  In its original order, EPA claimed tests had concluded that hydraulic fracturing (a.k.a. “fracking”) operations by the company “caused or contributed to the contamination of at least two residential drinking water wells.”. Although EPA’s subsequent letter to the company did not identify why the Agency was abandoning its case, it would appear that the move is a vindication of the conclusions drawn by the Railroad Commission.

This is the second time in three weeks that EPA has suffered egg on its face for an overreach on fracking regulation. > Read the full commentary on

> Interview William Yeatman