Apple slams government’s proposed punishment in ebook pricing case

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As expected, Apple has expressed its strong disagreement with the federal government’s proposed remedies in the ebook pricing case, which the government outlined in a court filing released Friday morning.

In July, a federal judge found Apple guilty of conspiring with publishers to fix ebook prices.

Apple’s full court filing is embedded below and is available here as a PDF. Apple calls the proposed injunction “a draconian and punitive intrusion into Apple’s business, wildly out of proportion to any adjudicated wrongdoing or potential harm,” and claimed it is “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.”

The government’s injunction seemingly forces Apple to abandon its in-app purchasing restrictions, at least for digital bookstores, by “allowing Amazon, Barnes & Noble, and other ebook app providers to offer a simple, costless means for readers to purchase e-books directly from the third party.” As Publishers Marketplace notes, it also “essentially [asks] the court to make Apple reconstruct its contracts across all of its iTunes businesses to disallow agency-style pricing.”

Apple, of course, disagrees with this, arguing that the government’s injunction is far too broad to fit the circumstances. It says that it “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,” and adds that “Without any basis in the evidence or the Court’s findings, the proposed regulation of the App Store is simply outrageous and cannot be included in an injunction.”

As for the government’s desire to regulate other forms of digital content in iTunes, Apple says that is an “absurdly broad proposal is not only disconnected from any evidence adduced at trial or findings made by this Court, but would open Apple up to liability in virtually every content market for the actions of content producers, over which it has no control.”

At the end of the filing, Apple spends a little time (two paragraphs) discussing what it thinks a reasonable injunction would be. Not surprisingly, it doesn’t think that much is needed, but it suggests that if there has to be a punishment, this could be it:

“A potentially valid injunction could include: (1) reasonable limitations on Apple’s ability to share information (akin to the publishers’ consent decrees.)…(2) a prohibition, tracking the publishers’ consent decrees, on retail price MFNs in agreements with the publisher defendants; and (3) reasonable antitrust training obligations for Apple, lasting a reasonable term. No further relief can be justified under the legal standard governing antitrust injunctions or the Constitution.”

Filing:

Apple’s response to DOJ proposed injunction
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