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Publishers protest DOJ’s proposed punishment for Apple, saying it hurts them too

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The five publishers who settled with the federal government in the ebook pricing case objected to the government’s proposed injunction for Apple (s AAPL) in a joint court filing Wednesday. They argue that the injunction modifies the settlements that they already reached with the government, and does more to punish publishers than to punish Apple.

Apple had objected to the proposed injunction on Friday. A federal judge found Apple guilty of conspiring with publishers to fix ebook prices in July.

The publishers — Penguin, Hachette, Macmillan, Simon & Schuster and HarperCollins — already reached settlements with the DOJ that allow retailers to discount their ebooks for two years and prohibit most favored nation clauses for five years. These settlements are already in effect; in fact, retailers have been discounting HarperCollins ebooks for nearly a year now. After two years, the existing settlements allow publishers to return to an agency pricing model where they set an ebook’s price and the retailer can’t discount below that price.

The injunction that the DOJ proposed last week, however, would force publishers to let Apple discount its ebooks for five years, not just two. While the injunction only specifically mentions Apple, it would affect publishers’ contracts with all retailers, including Amazon (s AMZN), because the publishers would not want to offer different terms to Apple than they do to other retailers.

“The provisions [in the injunction] do not impose any limitation on Apple’s pricing behavior at all,” the publishers write. “Rather, under the guise of punishing Apple, they effectively punish the Settling Defendants by prohibiting agreements with Apple using an agency model.” Thus the proposed injunction “directly conflicts” with the settlements that the publishers already reached, and “unreasonably and unnecessarily restrains the Settling Defendants’ independent business decisions beyond the scope and time provided for in their respective consent decrees.”

The publishers conclude that the DOJ is “attempting to impose a specific business model on the publishing industry, despite their express and repeated representations that they would play no such role.” They ask Judge Denise Cote, who is overseeing the case, to reject the DOJ’s proposed injunction.

Here’s the filing.

Publishers protest DOJ’s injunction against Apple

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6 Responses to “Publishers protest DOJ’s proposed punishment for Apple, saying it hurts them too”

  1. It wasn’t a conspiracy to set prices so much as a chance to get out from under Amazon’s thumb. Amazon has already killed the retail book business. Were you sleeping full-time during the past decade or so? The Agency model was the only way they could try to scratch back some of Amazon’s immense pricing power–let alone the fact that Amazon and only Amazon can sell Billions and not pay a penny in taxes. As citizens, that is robbing us all. Does the DOJ do anything? No!

    The publishers should have sided with Apple, but they were very opportunistic and left Apple alone to fight for an alternative to Amazon for books (any kind).

  2. David Thomas

    Good joke, BB. So the DOJ wants to remake a private industry & set all advantages in favor of the one firm that controls over 70% of the market. What’s next, a taxpayer financed bailout of Amazon because it’s too big to fail?

    • Tetracycloide

      You should really be directing your ire at the publishers and Apple if you truly feel Amazon is a bad player in the market (fun fact: controlling 70% of the market doesn’t make you bad for consumers a priori). Had they not broken the law we might be commenting on an anti-trust case of Amazon here but thinks to their rather flagrant price fixing Amazon get’s to be the victim. Even if there were something to go after Amazon over they’ve ruined the chances of that happening for at least the duration of the conspiracy plus the next 2-5 years.

  3. Balthazar B

    Well, then they shouldn’t have entered into a conspiracy to fix prices. What’s next, the Mob protests the government’s prosecution of Whitey Bulger?