HOW YOU LIKE DEM APPLES: Apple Tells the DOJ to Shove This Settlement
In April, the U.S. Department of Justice (DOJ) accused Apple Inc. (NASDAQ:AAPL) and numerous publishers of scheming to fix eBook prices. The government filed an antitrust lawsuit against them but the majority of them soon settled. Not Apple — they were ready for a fight.
The company boldly responded this week to the government’s accusations. Its lawyers said the case against Apple is “fundamentally flawed as a matter of fact and law” and that the thought of it trying to lessen competition and and fix prices is “absurd.”
The U.S. government’s complaint accuses Apple and the publishers, including Simon & Schuster, HarperCollins, Penguin and Macmillan who prefer the “agency model” which allows them to set their own eBook prices, of conspiring to fix these prices in a fight against Amazon Inc. (NASDAQ:AMZN).
Meanwhile, the online giant prefers a wholesale model that enables it to set eBook prices. The DoJ has alleged that Apple and the publisher posse came together and tried to get rid of the competition in the eBook retail market.
Apple has argued that the government “sides with monopoly, rather than competition, in bringing this case. Furthermore, it thinks the government “sides with monopoly, rather than competition, in bringing this case. The Government starts from the false premise that an eBooks ‘market’ was characterized by ‘robust price competition’ prior to Apple’s entry.”
Prior to the iBookstore, Apple said, “there was no real competition, there was only Amazon.”
The company also believes that its entry into this market has benefited consumers by challenging Amazon and giving them a choice with “innovative features, such as color pictures, audio and video, the read and listen feature, and fixed display.” It has also argued that it is providing additional power to the publishers, notably self-publishing and the smaller publishing houses.
In a read through Apple’s response, it accuses the government of quoting Walter Isaacson’s book, “Steve Jobs.” Apple said, “The Government’s selective citation to hearsay from a small portion of Apple’s former CEO’s biography is irrelevant and has no place in this litigation.”