DOJ wiggles on Apple e-book remedies but not oversight

The US Department of Justice says it's willing to cut the length of an injunction against Apple in half to five years but says having an external monitor is required.

Apple's iBooks will face more scrutiny following the guilty verdict in the e-books trial. James Martin/CNET
The US Department of Justice is willing to wiggle a bit on the remedies proposed for Apple following an e-books trial, but it won't budge on having someone monitor the company.

The government, which in July won an antitrust suit against Apple, initially asked for an injunction of 10 years, but the DOJ on Friday said it's willing to cut that length to five years. It noted that it's trying to limit the possibility that changes in the industry will cause the decree to "outlive its usefulness and unnecessarily harm Apple." At the same time, the DOJ wants the ability to seek a limited number of one-year extensions.

The agency also said it has modified the proposed injunction to require that Apple stagger negotiations with publishers going forward to minimize the possibility of future collusion. And the DOJ has removed language that Apple said would hurt its ability to effectively run its App Store.

However, the DOJ said having an external monitor is required, despite remarks by Judge Denise Cote earlier this month that such oversight may not be needed. It also disagrees with Apple about two other areas -- that Apple allow e-book retailers to provide links to their Web sites without compensating Apple and that the injunction includes provisions that prohibits Apple from taking similar actions in other content markets.

"Quite simply, Apple wants to continue business as usual, regardless of the antitrust laws," the DOJ argued in a court document filed Friday. "Under these circumstances, this court should have no confidence that Apple on its own effectively can ensure that its illegal conduct will not be repeated. There must be significant oversight by someone not entrenched in Apple's culture of insensitivity to basic tenets of antitrust law."

Apple declined to comment.

Cote, of the Southern District of New York, last month ruled that Apple conspired with publishers to hurt competition and raise e-book prices. As a result of that ruling, the court will impose certain sanctions on Apple. Apple and publishers have objected to some of the terms proposed by the Justice Department, and the DOJ and Apple appeared before Cote earlier this month to make their arguments about the remedies.

At that hearing, Cote requested that the two parties try to reach terms acceptable to both of them. She said she would accept a regime balancing Apple's ability to innovate in its App Store with a desire to restore e-book price competition. Cote also said she saw no need for an external monitor to keep an eye on Apple's activities so long as Apple sets up a "vigorous" in-house pro-competition program and can convince the court a monitor isn't necessary.

However, the DOJ in its filing Friday said Apple proposed terms that "impose virtually no limitations on the company's conduct beyond those already in place through the publisher defendants' settlements."

"In fact, in several respects, Apple's post-trial proposed injunction is less restrictive than the injunctions agreed to by the publisher defendants as part of their pre-trial settlements," the DOJ said.

During this month's hearing, Cote also suggested a system of staggering Apple's future e-book negotiations with publishers so they cannot collude, and she chastised both Apple and book publishers for failing to demonstrate that they've seen the error of their ways.

"This was a rough and tumble game played with high stakes...and the consumer suffered," Cote said at the hearing, adding that Apple and the publishers have made no public showing or remorse or contrition. "They are, in a word, unrepentant."

Updated at 8:55 with Apple declining to comment.

 

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