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.
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.
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