Apple calls DoJ e-books settlement proposal ‘draconian’ and ‘punitive’


Earlier today, the Department of Justice filed new court documents, offering Apple a settlement for its e-book price fixing case. The iPad-maker was found guilty last month of conspiring with 5 major book publishers to raise e-book prices.

In the filing, the DoJ essentially asked that Apple completely restructure its e-book business model. And unsurprisingly, it filed its own brief this afternoon, calling the proposal a “draconian and punitive intrusion into Apple’s business…”

The Next Web has the brief:

“Plaintiffs’ proposed injunction is a draconian and punitive intrusion into Apple’s business, wildly out of proportion to any adjudicated wrongdoing or potential harm. Plaintiffs propose a sweeping and unprecedented injunction as a tool to empower the Government to regulate Apple’s businesses and potentially affect Apple’s business relationships with thousands of partners across several markets.

Plaintiffs’ overreaching proposal would establish a vague new compliance regime—applicable only to Apple—with intrusive oversight lasting for ten years, going far beyond the legal issues in this case, injuring competition and consumers, and violating basic principles of fairness and due process. The resulting cost of this relief—not only in dollars but also lost opportunities for American businesses and consumers—would be vast.”

Among other things, the DoJ’s proposal called for Apple to allow major retailers like Amazon to link to their external bookstores from within their apps and sell e-books without being subject to the customary 30% in-app purchasing charge.

But Apple says that its in-app purchasing commission policy has nothing to do with the conspiracy charges the court found it guilty of. And it feels that such broad terms would affect its dealings with developers, and other content providers.

“Plaintiffs’ proposed injunction would require Apple to carve out an exception to its blanket rule—applicable to the more than 850,000 apps in the App Store—that a commission applies to in-app sales of digital goods. And it would allow e-book retailers to make such sales commission-free…

Apple is under no duty to allow other retailers to offer apps on the iPad in the first place, much less on terms that subsidize their operations.”

Apple has asked the court to either reject the DoJ’s proposed injunction entirely, or drastically narrow its scope. A hearing to discuss the proposal and Apple’s rebuttal is set for next Friday, August 9. Stay tuned, this is going to get really interesting.