DOJ: Apple shouldn't 'be rewarded' with same terms as publishers
The Department of Justice, which recently won an antitrust case against Apple, also says publishers could revert to their own tricks as soon as their limitations expire.
"Apple has been found to have orchestrated and facilitated a...price-fixing conspiracy -- amongst these very publisher defendants," Justice Department attorney Lawrence Buterman wrote in a letter dated Thursday but made available for viewing Friday. "Apple should not be rewarded with the same terms received by those that chose to settle to avoid the risks of litigation."
Apple and the Justice Department will appear in court later Friday to present arguments about steps the company has to take to resolve antitrust issues. Judge Denise 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.The Justice Department argued Friday that the court isn't limited in the remedies it can place on Apple based on the settlements the government reached with publishers before the trial began. And the government also said that "there is reason to believe the publisher defendants may be positioning themselves to pick things back up where they left off" as soon as their two-year sanction period runs out.
"Indeed, the very fact that the publisher defendants have banded together once again, this time to jointly oppose two provisions in the proposed final judgment that they believe could result in lower e-book prices for consumers, only highlights why it is necessary to ensure that Apple (and hopefully other retailers) can discount e-books and compete on retail price for as long as possible," Buterman wrote.
The Justice Department last week issued its proposals for ways "to halt Apple's anticompetitive conduct, restore lost competition, and prevent a recurrence of the illegal activities." The three big pieces of that proposal were that Apple would end its existing agreements with the five major publishers, let other e-book publishers link to their own bookstores in iOS apps, and staff an antitrust monitor to evaluate its business for five years. Apple fired back last week, calling the government's proposals vague, overreaching, unwarranted, and even "draconian."
In a filing Wednesday, the five major book publishers weighed in, arguing that one of those stipulations -- ending the existing agreements -- would completely eliminate a pricing model that's become the industry standard. The publishers also said it would break agreements the Justice Department made with each of them when they settled.
The Justice Department on Friday, however, argued that it "in no way seeks to modify publisher defendants' consent decrees" or punish those companies. All five major publishers settled with the government before Apple's trial began.
The Justice Department noted that its proposed remedies for Apple don't require publishers to take any action whatsoever, but require Apple to not enter into an agreement with any publisher defendant that restricts the iPhone maker's ability to offer discounts and that Apple must terminate any agency agreements made with publisher defendants.
"These are requirements that the United States believes to be necessary to rid the e-book market of the effects of a successful, long-running price-fixing conspiracy, and to restore this market to competitive health," the Justice Department wrote.