The U.S. Department of Justice’s April eBook price fixing settlement with three publishers is “fundamentally unfair, unlawful, and unprecedented,” Apple said in a legal memo Wednesday. The Cupertino company argued that the settlement agreement effectively terminates its contracts with the publishers who have settled and is unjust considering that Apple and the remaining publisher defendants may win a trial on the merits and therefore validate the legality of their original contracts.
Apple and five book publishers were sued by the DOJ in April for allegedly conspiring to increase the price of eBooks and remove Amazon’s ability to offer books at a lower price by prohibiting books offered by Apple’s iBookstore from being sold for less anywhere else.
Apple and the publishers deny any collective agreement and claim that Apple and each publisher independently arrived at the same terms. They further argue that they did only what was necessary to break an Amazon monopoly on the eBook market.
Three publishers — Hachette, HarperCollins, and Simon & Schuster — quickly settled with the DOJ while Apple, Macmillan, and Penguin vowed to fight the government’s charges. Those publishers that settled will be free to return to their previous agreements with Amazon.
Apple’s legal memo now states that the DOJ’s settlement effectively nullifies “a non-settling defendant’s negotiated contract rights” and that doing so is “unfair, unlawful, and unprecedented.”
Apple elaborated by explaining that the DOJ “seeks to terminate and rewrite Apple’s bargained for contracts before a single document has been introduced into evidence, before any witness has testified, and before the Court has resolved the disputed facts. Once its existing contracts are terminated, Apple could not simply reinstate them after prevailing at trial. The Court’s decision would be irreversible.”
Apple and the remaining publishers are set to go trial next summer but with yesterday’s legal memo, the company is hoping that the court either rejects the settlement or at least delays its implementation until after the trial is complete and one side has prevailed on the merits.