Publishers Protest DOJ's Proposal for Apple iBooks Conviction

Apple in CourtFive major publishers filed a protest against the U.S. Department of Justice's (DOJ) proposed remedy for Apple in the company's iBooks pricing antitrust conviction. HarperCollins, Hachette, Simon & Schuster, Penguin Random House, and Macmillan filed court documents arguing that the DOJ's proposal would retroactively alter the terms of their own settlement with the DOJ in the same case.

Apple was accused of colluding with the above-mentioned companies when it brought iBooks and iPad to market in 2010. According to the DOJ, Apple served as a ringleader in organizing a horizontal pricing scheme with those publishers. They ended up settling before the case went to trial, but Apple fought on...

...and was convicted by Judge Denise Cote.

As part of the process, the DOJ proposed a series of remedies. Included in that proposal were sweeping controls over all of Apple's iTunes businesses, as well as a prohibition against Apple from entering deals with publishers that involve either the agency pricing model or deals involving the most favored nation clause.

It's the last element that the publishers are protesting. The Wall Street Journal reported that court documents filed by the publishers said that imposing this punishment would undo the settlement terms they had already reached with the DOJ.

"The provisions do not impose any limitation on Apple's pricing behavior at all; rather, under the guise of punishing Apple, they effectively punish the settling defendants by prohibiting agreements with Apple using an agency model," the documents said.

I've got news for them: that was kind of the point. The DOJ thinks the agency model is of the devil and must be eliminated. That was a big part of this trial from the get-go.

Apple has also protested the DOJ's proposal, calling it draconian, unprecedented, punitive, and overreaching.

Judge Cote has not publicly reacted to the proposal, nor has she responded to the publishers' filing. Apple and the DOJ similarly have not commented on the publishers' opinion.