Apple Continues to Fight in Wake of E-book Settlement

Apple issued a statement yesterday in which the company criticized the Department of Justice as being “fundamentally unfair, unlawful and unprecedented.” The accusation came in the wake of the DOJ’s support of a government-proposed settlement made in an effort to resolve the recent controversy over the practice of setting fixed e-book prices. Apple lambasted the DOJ for trying to rewrite its negotiated contracts without due process.

From the introductory paragraph of the statement, it is clear that Apple has entered the ring sporting gloves from the get-go and will not go down without a fight. You can read the whole statement here.

The settlement – which is not yet settled and will go to trial – would order the three publishing companies involved (HarperCollins, Hachette, and Simon & Schuster) to rip up their already-bargained-for pricing contract with Apple, which Apple feels is absolutely unjust.

Says the company, “The government is seeking to impose a remedy on Apple before there has been any finding of an antitrust violation.” Apple went further to insist that the act of the court pivots around “an alleged conspiracy to force Amazon to adopt agency.” The company continued to make comments suggesting that Amazon is a monopolist in the industry, including mentioning that their contracts have not “forced any publisher to adopt agency with other retailers [and that] many independent publishers [have agency pricing agreements with Apple and wholesale agreements with Amazon.”

Furthermore, in a footnote of the statement, Apple states that a lot of the public comments made about the anticipated settlement:

“expressed concerns about the possibility that the Government has unwittingly placed a thumb on the scales in favor of Amazon, the industry monopolist. Amazon was the driving force behind the Government’s investigation, and it told a story to the Government that has yet to be scrutinized…In all, the Government met with…fourteen Amazon employees – yet not once under oath. The Government required that Amazon turn over a mere 4,500 documents, a fraction of what was required of others.”

In other words, says Apple, the settlement is moot and the case should be rejected – otherwise ruling should be postponed until the trial. The trial is scheduled to occur in a bit less than a year, in June of 2013.


If you are unfamiliar with this case, here’s a little background info: When Apple’s popular iPad began flying off the shelves, publishers started to swing in the direction of an “agency model” for their e-books, a model which authorizes publishing companies to fix prices, as opposed to retailers setting those prices which is known as a “wholesale model. The agency model is sometimes considered a form of protection for the products involved, especially in the case in e-books which can basically be reproduced infinitum and therefore have no real essential value at this point.

However, the Federal Government filed an antitrust lawsuit against Apple earlier this year, claiming that the company was trying to unfairly swell the value of e-books, and Apple had been fighting ever since.