Publishers fight Apple e-book ruling

Woman selecting e-book Apple has been ordered to terminate agreements with publishers, which include retail price deals HarperCollins, Simon & Shuster and Penguin are among publishers who have filed a complaint against restrictions imposed on Apple by a US court.

Last month Apple was found guilty of conspiring with publishers to fix the price of e-books bought via iTunes.

It was ordered to terminate deals with five major companies and allow other e-book retailers to sell to iPad and iPhone users for the next two years.

The publishers say they are being punished by the restrictions.

Under agreements put in place between Apple and companies including Hatchett and Macmillan, electronic book price-fixing took place, creating unfair competition for other retailers, the court ruled last month.

At the time most of the publishers reached separate settlements totalling more than $150m (£96m) but Apple said it would fight the "false allegations".

According to the Associated Press news agency, the publishers' complaint says: "The provisions do not impose any limitation on Apple's pricing behaviour at all.

"Rather, under the guise of punishing Apple, they effectively punish [publishers that settled in the case]."

Garner analyst Van Baker told AP that the ruling seemed "heavy-handed".

"It is basically putting a stake through a portion of Apple's business, and I confess to being surprised by that," he said.

"It strikes me as a pretty heavy-handed solution to the issue."

In European Antitrust Fight, Google Needs to Appease Competitors

The European Commission on Wednesday formally said for the first time that Google’s proposal for addressing antitrust concerns did not go far enough, and demanded that it come up with more far-reaching remedies or potentially face a fine of up to $5 billion.

 
It was a significant setback for Google, which in April struck a deal with the commission to settle its three-year antitrust investigation by making certain changes in the way it displays answers to search inquiries. But the deal was contingent on feedback from Google’s rivals. The commission determined that the proposal was inadequate, and said the company needed to do more to address rivals’ concerns.
The about-face followed an outcry from Google competitors during the market testing phase of the inquiry, in which the commission asked for feedback on the proposal.

 
“What they discovered in the market test was that overwhelmingly, everyone said the settlement was inadequate and doesn’t solve the problem,” said a person with knowledge about the feedback competitors gave the commission, but who spoke anonymously because the filings were not public.

 
Joaquín Almunia, the European Union competition commissioner, said at a news conference, “I concluded that the proposals that Google sent to us months ago are not enough to overcome our concerns.” He said he had written to Eric E. Schmidt, Google’s executive chairman, “asking Google to present better proposals.”
A Google spokesman, Al Verney, said on Wednesday that it would “continue to work” with the commission to settle the case. He added that Google was confident that its earlier proposal “clearly addresses” the commission’s concerns.

 
Mr. Almunia did not give Google a deadline for presenting a new set of concessions, according to a person with direct knowledge of Mr. Almunia’s letter who spoke anonymously. So the case, which both sides had hoped to close this year, could continue for several months or more.

 
The main issue is the way Google, which, according to comScore, handles 86 percent of Web searches in Europe, orders its search results. Regulators have been investigating whether Google favors its own services — like travel, local business, mapping and shopping — over those of competitors. Regulators have also examined whether it disadvantaged competitors by including material from other Web sites in search results and whether its advertising business complied with European antitrust law.

 
Google managed to avoid antitrust charges in the United States, where it has two-thirds market share, after a two-year investigation of similar issues. Google has faced a more hard-line approach in Europe, where critics have accused the antitrust authorities of relying too much on outside complaints from competitors rather than on evidence of consumer harm. That is somewhat of a sore point for European officials, who insist they share the same goals as the Americans when it comes to consumers.

 
In April, Google proposed to change its search results to clearly label results from some of its own properties, like Google Plus Local, and in some cases to show links from rival search engines. It also proposed giving competitors more control over how it used information from their sites in its vertical search results and making it easier for small businesses to transport their ad campaigns to other search engines.
The proposal was the first time Google had agreed to legally binding changes to its search results, and went much further than the minor concessions it made to the Federal Trade Commission in its inquiry.

 
Still, the proposal would not have required Google to change the algorithm that produces its search results. Also, if it had been accepted, Google would have escaped a possible fine of about 10 percent of its annual global revenue of about $50 billion and a formal finding of wrongdoing that could limit its ability to expand in Europe. 

The 'Butler' Fight: Harvey Weinstein's Mixed Track Record in His MPAA Feuds (Analysis

When it comes to battling the MPAA, Harvey Weinstein’s default position is to go into all-out attack mode. While other movie companies usually sort out their differences with the Motion Picture Association of America behind the scenes, Weinstein stages major public relations campaigns like the one he is currently conducting to attempt to win the right to call Lee Daniels’ upcoming movie The Butler.

But do they actually work?

Typically, Weinstein, one of the toughest moguls in Hollywood, portrays himself as the scrappy underdog standing up for some higher principle. While the current dispute revolves around whether The Weinstein Co. and Warner Bros. have played by the rules of the MPAA’s Title Registration Bureau, to which both companies subscribe, Weinstein is making every effort to turn the business dispute between movie companies into a major civil rights fight. “I’ve gone through this all my life,” Weinstein said Tuesday morning during an appearance on CBS This Morning. “My dad taught me to fight injustice. This is unjust.”

STORY: Harvey Weinstein Talks 'Butler' Dispute at 'Fruitvale Station' Screening

Over the years, Weinstein’s scorched-earth tactics have resulted in a mixed record of success. Sometimes he wins, managing to overturn NC-17 ratings in favor of less restrictive R ratings on movies ranging from 1994’s Clerks to 2010’s Blue Valentine. And sometimes he loses, failing to convince the ratings appeals board to downgrade its original NC-17 designations on films like 1995’s Kids or soften the R rating it gave to 2010’s The King’s Speech and 2012’s Bully.

Win or lose, though, the very public disputes almost always result in a torrent of publicity, which Weinstein’s critics say is his real objective. (Among Weinstein and the show’s hosts, the CBS Morning News appearance included three reminders that The Butler is scheduled for release Aug. 16, while also including a clip from the film.) But all that free press doesn’t necessarily translate into big bucks at the box office.

VIDEO: Harvey Weinstein Claims 'The Hobbit' Is Behind 'The Butler' Title Fight

Director Kevin Smith’s Clerks, for example, grossed $3.2 million domestically back in 1994, and that meant the low-budget, black-and-white indie was a solid success but not a runaway phenomenon. Blue Valentine, despite earning an Oscar nomination for its star Michelle Williams, grossed just $12.4 million worldwide. On the other hand, Michael Moore’s 2004 documentary Fahrenheit 9/11, which unsuccessfully appealed an R rating "for violent and disturbing images," went on to become the top grossing documentary of all time, collecting $222 million worldwide.

Sometimes, Weinstein has even used a ratings dispute as part of a movie’s awards campaign. While going head-to-head with the MPAA over Fahrenheit 9/11’s rating, the expert campaigner also took out ads inviting Academy members to screenings with the come-on, “Before the MPAA makes their decision, MAKE YOURS.”

Most of Weinstein’s MPAA battles have revolved around the Classification & Ratings Administration. But he’s also had previous run-ins with the Title Registration Bureau as well.

STORY: 'The Butler' Fight: David Boies Claims WB Extortion in New Letter

In 1995, Warner Bros. objected when Weinstein sought to release Michael Radford’s Italian-language film stateside under the title The Postman, a title Warners had registered for an upcoming Kevin Costner movie of its own. Weinstein backed off, releasing the movie as Il Postino (The Postman). The following year, Sony objected when the Weinstein brothers released Wes Craven’s horror spoof, Scream, because Sony had released a movie called Screamers earlier that year. Despite TRB sanctions, reported at the time to amount to $1,500 per day per screen on which the movie was playing, the Weinsteins stuck to their guns. And Disney, which was then the parent company of the Weinsteins’ Miramax Films, ultimately came to an undisclosed private resolution with Sony.

By now, the Weinstein battle plan is familiar -- and so when the current controversy over The Butler broke into the open last week, insiders at both Warners and the MPAA shook their heads and claimed the dispute was “just Harvey being Harvey.” Both sides, pending an appeal, have dug in. Warners believes it has the MPAA rules on its side, but the Weinstein forces are convinced that they can embarrass Warners and the MPAA into making concessions by arguing that the studio is trying to stand in the way of a racially uplifting film.

As familiar as his tactics have become, there is no underestimating them.

One of Weinstein’s first moves is always to call in high-powered lawyers, although the clashes rarely result in any actual litigation. In the cases of both Clerks and Kids, Weinstein enlisted Alan Dershowitz, famous for defending Claus von Bulow, a case that became the basis for the movie Reversal of Fortune. To appeal an NC-17 rating given a now-obscure 1994 movie called The Advocate, Weinstein drafted the late William Kunstler, who defended the Chicago Seven in the late ‘60s. David Boies, who is representing Weinstein Co. in The Butler case, also, working alongside Hollywood attorney Bert Fields, handled the unsuccessful appeal on The King’s Speech rating. Both Boies and Fields can command hourly fees in excess of $1,000.

Second, Weinstein and his allies ratchet up the rhetoric. “This rating for The King’s Speech is arbitrary and irrational. In my view, it violates The Weinstein Company’s right to freedom of speech under the state and U.S. constitution. It should strike fear in the heart of every director and producer,” Fields said during The King’s Speech dust-up. Boies has called Warners refusal to grant Weinstein Co. the right to call its movie The Butler “a transparent attempt to hold a major civil rights film hostage to extort unrelated concessions from TWC” -- a charge that Warners called “deeply offensive and untrue.” Weinstein said Tuesday that two Warners executives had asked him to give up his share of profits from The Hobbit movies to settle the matter. (The Weinsteins are entitled to back-end money from the first Hobbit movie and are locked in a dispute with Warners over whether they can share in the proceeds from the second and third installments.) Warners also called that assertion untrue.

But Weinstein -- whether he wins or loses -- generally gets away with such tactics because he usually has the press on his side, especially when he is tilting with the MPAA’s ratings regulations. Historically, the MPAA has often been slow to articulate its rationales, which to much of the media often look overly restrictive, penalizing language and sexual imagery while letting violence run wild.

Plus, Weinstein also has cultivated various media outlets over the years to be sure his views will have a ready platform. Pro-Weinstein items have often appeared on Page Six of the New York Post. And at May’s Cannes Film Festival, he enlisted Deadline.com’s Michael Fleming and Pete Hammond to moderate buyer presentations for upcoming Weinstein Co. movies. When Weinstein was ready to take The Butler dispute public, his camp leaked to Fleming the private letters to Warners and the MPAA.

But as heated as the battles often become, Weinstein also has shown himself to be a pragmatic businessman once the dust settles. In a number of cases when the MPAA has ruled against him on ratings, he’s simply gotten out the scissors for which he is famous and edited down the films to get a less restrictive rating.

When the 2012 documentary Bully got stuck with an R rating for six uses of the F-word, Weinstein Co. agreed to edit out three instances of the word and the MPAA then agreed to rerate it PG-13. And in the case of the Oscar-winning The King’s Speech, after the movie had played 12 weeks in theaters, during which it earned the bulk of its business, Weinstein decided to mute two uses of the F-word, and the MPAA agreed to a new PG-13 rating.

'The Butler' Fight: David Boies Claims WB Extortion in New Letter

In the latest salvo in The Butler title standoff, The Weinstein Company's litigator David Boies has responded to Warner Bros. by threatening a restraining order and continuing to press an antitrust violation claim.

"[N]one of this controversy would have occurred if Warner Bros. had not repudiated its representations and agreements not to object to 'The Butler' in a transparent attempt to hold a major civil rights film hostage to extort unrelated concessions from TWC," Boies wrote in an e-mail dated July 5 and obtained by The Hollywood Reporter.

The public battle between the studios erupted last week. The MPAA's Title Registry Bureau ruled in an arbitration on Tuesday that TWC couldn't use the title, The Butler, for the 2013 release because a 1916 short in the Warner Bros. Library shares the same name.

ANALYSIS: Few Options for Weinstein Co. in Wake of MPAA 'Butler' Ruling

The move followed months of back-and-forth between the two studios after TWC failed to "clear" the title before moving forward with its release plan for the White House-set drama directed by Lee Daniels. The film is scheduled to hit theaters August 16.

Boies sent letters to Warner Bros. litigator John Spiegel and the MPAA threatening litigation over the ruling. Daniels personally appealed to Warners CEO Kevin Tsujihara in a public letter claiming that changing the title "would most certainly hurt the film by limiting the number of people who would ultimately see this important story."

The film stars Forest Whitaker as a longtime White House butler and also features performances by Robin Williams, Oprah Winfrey, John Cusack and Liev Schreiber.

TWC is appealing the arbitrator's ruling, though as THR has noted, it could face an uphill battle. Its antitrust argument -- that the arbitrator's ruling restricts competition since the 1916 film "has not been shown in theaters, television, DVDs, or in any other way for almost a century," in Boies words -- also might be problematic.

The full text of Boies' latest letter to Spiegel is below:

Dear Mr. Spiegel:

Although you do not directly respond to my inquiry, I assume that you are the counsel who should be notified in the event it is necessary to seek a TRO.

I will not try to respond to your version of the facts in part because it is so inaccurate and incomplete that such an exercise would be extensive, and in part because your letter appears to be a press release masquerading as a lawyer's letter. However, I briefly note your lack of response to three critical points.

First, if an anticompetitive "permanent" allocation of titles (and words used in titles) among competitors is a product of a horizontal agreement, that is an antitrust violation, not a defense.

Second, the purported order that TWC not use titles that it has already cleared pursuant to the MPAA's own rules and procedures demonstrates that it is Warner Bros. and the MPAA that are at odds with established custom, practice, and procedure.

Third, none of this controversy would have occurred if Warner Bros. had not repudiated its representations and agreements not to object to "The Butler" in a transparent attempt to hold a major civil rights film hostage to extort unrelated concessions from TWC.

Same Sex Marriage Fight Shifts Back To States

Allan Hoyle of North Carolina (center) protests gay marriage outside the Supreme Court.

The dual victories the Supreme Court handed to gay-marriage supporters Wednesday seemed to temporarily shift the focus of the fight from Washington to the states.

For instance, one of the more notable reactions to the Supreme Court decisions overturning the Defense of Marriage Act and upholding a lower court ruling that blocked California's Proposition 8 from taking effect came from the American Civil Liberties Union.

The ACLU announced Wednesday it had hired well-connected GOP political strategist Steve Schmidt, who worked for President George W. Bush and was a senior adviser to Sen. John McCain's 2008 presidential campaign, to lead an effort to gain Republican support for gay marriage in the states. The civil liberties group, which helped represent plaintiff Edie Windsor in the case that overturned DOMA, said it had amassed a $10 million war chest for the effort.

The ACLU said it had also hired Jimmy LaSalvia, founder of the gay-rights group GOProud, in an attempt to add conservatives to its coalition to overturn state bans.

In its statement, the ACLU explained:

"Schmidt's role will be to help spearhead the campaign to strike down state-based laws prohibiting same-sex marriage. The campaign will, over the next four years, challenge legislative and constitutional provisions in states such as Illinois, Oregon, Hawaii, New Mexico, and others. The ACLU aims to spend roughly $10 million through 2016 and will officially announce the initiative with an ad in tomorrow's edition of The Wall Street Journal."

Meanwhile, David Boies, a supporter of Democratic causes and one of two famous lawyers who represented Proposition 8 opponents (the other was Ted Olson, a conservative Republican and former U.S. solicitor general), also made clear that after Wednesday's court rulings he saw the gay-rights battles largely shifting to the states.

In a Bloomberg TV interview, Boies said:

"The next step is to be sure that this marriage equality is extended to every one of the 50 states. The United States Supreme Court made clear today that you have a right to marry, that there is no basis for discrimination."

Boies said his read of the Supreme Court opinions, especially Justice Antonin Scalia's dissent, suggested that even Scalia interpreted the court's majority as ruling that there was "a right to marry in every one of the 50 states."

Boies added: "Tomorrow, we will sit down and figure out what is the way to most quickly bring marriage equality to all 50 states. ... There are people all over this country that are litigating these issues. There are enough people who believe in marriage equality to bring that issue to every state in this country. And hopefully what you will find is that after today's opinion, states will voluntarily adopt marriage equality."

But as much as supporters of same-sex marriage looked to intensify the fight in the states, opponents also placed their hopes on the states to slow or stop any momentum the other side gained.

In their view, the Supreme Court did no such thing as recognize a constitutional right to marry.

At a Capitol Hill news conference, Rep. Tim Huelskamp, a Kansas Republican, said:

"One good thing out of the decision was the court did not declare that there was a constitutional right for same-sex marriage. ... The state of Kansas will be able to maintain its marriage amendment which I helped author a number of years ago."

Rep. Vicky Hartzler, a Missouri Republican, suggested that when it comes to the states, the numbers are on their side:

"Thirty-eight states have affirmed the belief of their citizens that marriage exists between a man and a woman and is a necessary building block of a stable society. The debate over marriage will continue with the states leading the way. We must work to defend the right of Americans to make marriage policy."

House Majority Leader Eric Cantor also pointed beyond Washington to salvage matters for those opposed to same-sex marriage. Though a brief statement, it was significant, since he made no suggestion that the GOP-controlled House would take another run at a same-sex marriage law:

"I'm disappointed in this decision, and the marriage debate will continue in the states."