Apple: Ebook Price Fixing Judge Made Mistakes

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Apple is scheduled to appear in court on Friday for a hearing to review the proposed remedies in the U.S. Department of Justice ebook price fixing case, and the iPhone and iPad maker told the Judge overseeing the proceedings that she made mistakes in the way she handled the trial. According to Apple, Judge Denise Cote disregarded critical evidence that showed it didn't collude with book publishers to artificially control retail prices.

Apple says Judge Cote made a mistake when she excluded evidence that helped its defenseApple says Judge Cote made a mistake when she excluded evidence that helped its defense

Judge Cote ruled that Apple and five major book publishers worked together to artificially raise the price of ebooks by forcing retailers into what's known as an agency pricing model where publishers set prices and resellers take a cut. The five publishers that where also named in the case -- Penguin, MacMillan Simon & Schuster, HarperCollins, and Hachette Book Group -- settled out of court and all agreed to terms that limit how they can create contracts with retailers.

Apple said in its letter to the Judge that excluding evidence from Penguin, now part of Random House, which showed that it wasn't conspiring with publishers was a mistake that ultimately hurt its case, according to Bloomberg. The letter also said that emails and other testimony that backed up Apple's claims were ignored.

Apple attorney Orin Snyder said, "These evidentiary issues demonstrate that Apple has a substantial possibility of prevailing on appeal."

As part of its case, the DOJ argued that Apple and the publishers were trying to break Amazon's control over the book market, which is at least partially true. Where they disagreed was on how that was attempted. Apple said it was simply trying to get deals that let it offer competitive prices on ebooks for the iPad, and the DOJ argued that Apple and publishers were trying to artificially raise prices.

Apple, as well as other stores felt they couldn't effectively compete with Amazon because the online retailer was selling books below cost. By changing the way books were sold to retailers, publishers argued, they could create a more even playing field where retailers wouldn't be forced to sell books at a loss just to compete with Amazon.

The DOJ is proposing what Apple sees as draconian measures, adding that it amounts to "punitive intrusion into Apple's business, wildly out of proportion to any adjudicated wrongdoing or potential harm."

The DOJ proposal calls for a ten-year plan where Apple would be closely monitored and essentially prohibited from striking competitive deals. Apple said the proposed remedies go "far beyond the legal issues in this case, injuring competition and consumers, and violating basic principles of fairness and due process."

Apple is appealing Judge Cote's verdict, so if she chooses to impose the remedies the DOJ is suggesting there's still a chance they won't be imposed. Should Apple get her ruling overturned, the DOJ remedies would be tossed out as well.

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6 Comments Leave Your Own

Lee Dronick

Well it will be interesting to see what happens.

xmattingly

I’m still immensely offended by this whole case. Apple does not have a monopoly, and there are MANY other ways to obtain ebooks, let alone reading material. When you have something to sell, you should be able to set your own price. Do we no longer live in a free market society?

John Watson

Apple sought competitive ebook pricing by making everyone pay the same prices regardless of where you bought from. That’s hardly what I would call competition. At that point all you’re buying on is which DRM is less of a hassle to crack.

When you collude to raise prices on things because your own platform wouldn’t be able to compete without that, you risk getting burned. They earned what they got.

daemon

@xmattingly

Collusion to fix prices is illegal.

jameskatt

It would be good to see someone stand their ground on the DOJ attorneys and this judge. They are simply wrong.

They are the ones who would convict a woman who was raped for reporting the rape and set the rapist free.  Amazon is the rapist here.

daemon

@jameskatt:

Seriously? You’re equating Amazon selling books to rape?

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