Justice Department scolds Apple while seeking lighter e-book penalties

A Justice Department filing Friday scolded Apple for continuing to deny any wrongdoing in the e-books price-fixing trial it lost this summer. Above, the federal courthouse in New York where the trial has unfolded.
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Even as federal antitrust lawyers proposed a slight reduction in their proposed penalties in the Apple e-book case, they stepped up their criticism of the company for continuing to insist it did nothing wrong.

In a filing made on Friday, the U.S. Justice Department agreed to shorten the length of its proposed injunction on Apple from 10 years to five.

But the Justice Department said it was still requesting that a judge impose the same range of penalties, which include appointing a third-party antitrust monitor, restrictions on deals Apple can strike with publishers and new requirements to let competitors link to their own e-book stores from their apps.


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Most interesting, however, was the tone of exasperation contained in the latest filing. The Justice Department and Apple apparently had some discussions about terms of a compromise set of penalties at the behest of the judge. But in those talks, the Justice Department says Apple continued to push for minor penalties as it insisted it was not at fault.

“In response to the Court’s instruction that the parties meet and confer in an attempt to arrive at a mutually-acceptable injunction, Apple proposed to Plaintiffs a series of terms that impose virtually no limitations on the company’s conduct beyond those already in place through the Publisher Defendants’ settlements,” says the Justice Department filing. “In fact, in several respects, Apple’s post-trial proposed injunction is less restrictive than the injunctions agreed to by the Publisher Defendants as part of their pre-trial settlements.

Last year, the Justice Department accused Apple and five major publishers of conspiring to fix e-book prices after the company entered the market with the launch of the iPad in 2010. All five publishers settled, but Apple chose to fight on, claiming in filings and in court that its deals were legal.

This summer a federal judge disagreed with Apple and handed down a sweeping ruling in favor of the Justice Department. The judge is now considering what penalties to impose.

In the filing on Friday, the Justice Department says Apple simply can’t be trusted, given its reluctance to acknowledge the outcome of the case.


“They resist proposed changes intended to strengthen their internal compliance processes, refuse to undertake basic efforts aimed at restoring price competition in the marketplace, and even decline to commit to not repeating their anticompetitive practices in other content markets,” says the Justice Department filing. “Quite simply, Apple wants to continue business as usual, regardless of the antitrust laws. Under these circumstances, this Court should have no confidence that Apple on its own effectively can ensure that its illegal conduct will not be repeated. There must be significant oversight by someone not entrenched in Apple’s culture of insensitivity to basic tenets of antitrust law.”

Apple had not yet filed its response.


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