updated 11:57 am EDT, Fri August 9, 2013
Sign of companies operating too closely in unison, DoJ suggests
The US Department of Justice has filed a response to the book publishing industry's defense of Apple in light of possible settlement terms that could impose strict restrictions on Apple, and which the publishers suggest might alter the terms of their own settlements over allegations of fixing e-book prices. DoJ attorney Lawrence Buterman contends that the unified defense shows that the publishers have "banded together once again," as they did when conspiring to inflate prices and undermine Amazon. The publishers' motion "only highlights why it is necessary to ensure that Apple (and hopefully other retailers) can discount ebooks and compete on retail price for as long as possible," the filing reads.
Apple has previously protested the DoJ's proposed settlement, calling it "draconian and punitive." For two years the company would have to allow rival e-book sellers like Amazon and Barnes & Noble to link to their own storefronts in apps -- potentially diverting people away from the iBookstore, and bypassing the 30 percent cut Apple takes from in-app purchases, although e-book vendors already get around this by making their iOS apps just one more means of reading pre-purchased content. More critically, however, the DoJ is asking that Apple cancel its existing e-book deals with the five implicated publishers, and forego entering new ones for another five years. On top of that, the company would be blocked from signing agreements with other content providers "that are likely to increase the prices at which Apple's competitor retailers may sell that content."
The company is asking for a stay on court proceedings, something which the DoJ opposes. More recently Apple has argued that witnesses from Amazon and Google who testified at trial have "serious credibility issues." Later today, Apple and the DoJ will further discuss the potential penalties.