Apple Files Brief Calling Department of Justice Remedy 'Draconian' and 'Punitive'

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Following the Department of Justice's release of a proposed remedy to address Apple's e-book price fixing, Apple has filed its own brief (via The Next Web) that calls the plan 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.
The DOJ's remedy would require Apple to terminate its existing agreements with the five major publishers that the company is accused of conspiring with in addition to allowing its e-book rivals like Amazon and Barnes and Noble to offer links to their own bookstores within their apps.

It would also require Apple to allow a third party to monitor its continued adherence to internal antitrust compliance policies and prevent the company from entering into agreements with music, movie, TV show, and book providers that could increase prices for rival retailers.

The App Store section of the proposal is particularly troubling for Apple, as it would potentially allow major e-book retailers like Amazon and Barnes and Noble to link to outside bookstores and sell e-books without being subject to Apple's 30% in-app purchase fee. According to Apple, its App Store is outside of the scope of the case and unconnected to evidence that was presented at trial.
There was no evidence admitted at trial, and certainly no finding by this Court, that Apple's general policy requiring e-book retailers to pay a commission on in-app digital sales was part of the conspiracy that this Court found. Likewise, there is no evidence that Apple conspired to restrain the distribution of e-book apps or to impose less favorable terms on such apps.
In addition to calling the remedy punitive and draconian, Apple argues that the DoJ's terms are "absurdly broad" and that the proposed compliance monitorship would be "unprecedented and unwarranted."

Apple asks the court to reject the proposed injunction entirely, or greatly narrow its scope. A hearing to discuss the proposal is set for August 9.


Article Link: Apple Files Brief Calling Department of Justice Remedy 'Draconian' and 'Punitive'
 

samcraig

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Jun 22, 2009
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Don't do the crime if you can't do the time.

But seriously - I do think there are things that are over-reaching or harsh about the judgement in total. Hopefully there's wiggle room or it can be adjusted accordingly.
 

ggamecrazy

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Jan 31, 2013
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So from the gist of it, us (the consumer) have nothing but to gain from this decision. :cool:

Of course the :apple: Apple stockholder can't say that.
 

myamid

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Sep 25, 2004
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oh for @$#$ sake...

Come on, I'm tired of seeing this tirade about how unfair this is.

Did Apple sign contracts with MFN clauses in them? Yes
Did these clauses force prices to go up? Yes
Are higher prices a benefit to consumers? No
Did Apple knowingly do this with the cooperation of publishers to increase the prices? Yes
Did all these publishers settle and essentially admit guilt? Yes

So over all, it's pretty clear Apple did engage in a form of price fixing, and they were cough in the act. Wanting to get into a new market is all good, but the way they did it was wrong, and they should get punitive damages for it.

Come into a new market with an innovative product or with better prices and the customers will come. Try to force your way into it by forcing existing players to price higher because you took part in a mafia-like agreement to ensure other players can't price below you? That's dishonest, period.
 

WhoDaKat

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May 20, 2006
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I think the whole thing is bunk. The agency model doesn't say you can't sell your books cheaper it just says you have to offer Apple the same price you'd give to your competitors. I guess the DOJ likes to see small business bookstores going under because they can't compete with Amazon who sells things at a loss. Way to go America. Great job.
 

eldervovichka

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Jul 6, 2008
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There is already a White House Petition to help bring the DOJ actions under review. It just started today.

http://wh.gov/lr8uW

I normally don't get involved in this type of thing, but I saw this link in another thread, so I decided to post it here.

Have a wonderful day!

Jeff
 

gibbz

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May 31, 2007
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I agree with this statement from Apple.

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
 

samcraig

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Jun 22, 2009
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I think the whole thing is bunk. The agency model doesn't say you can't sell your books cheaper it just says you have to offer Apple the same price you'd give to your competitors. I guess the DOJ likes to see small business bookstores going under because they can't compete with Amazon who sells things at a loss. Way to go America. Great job.
Huh?

The whole point was that all resellers needed to price their books the same.
 

WhoDaKat

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May 20, 2006
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Come on, I'm tired of seeing this tirade about how unfair this is.

Did Apple sign contracts with MFN clauses in them? Yes
Did these clauses force prices to go up? Yes
Are higher prices a benefit to consumers? No
Did Apple knowingly do this with the cooperation of publishers to increase the prices? Yes
Did all these publishers settle and essentially admit guilt? Yes

So over all, it's pretty clear Apple did engage in a form of price fixing, and they were cough in the act. Wanting to get into a new market is all good, but the way they did it was wrong, and they should get punitive damages for it.

Come into a new market with an innovative product or with better prices and the customers will come. Try to force your way into it by forcing existing players to price higher because you took part in a mafia-like agreement to ensure other players can't price below you? That's dishonest, period.
MFN clauses make it seem like only Apple is getting something. Apple, and other small book stores, heck even the big brick and mortar stores can't compete with or don't want to compete with someone who buys 5 billion of something and then sells them at a loss to steal customers. Apple isn't saying only we get this price, they are saying if X gets this price, we want it to. Whats wrong with that?

The clauses themselves didn't make prices go up, the publishers raised the price on the product they were selling. Check the prices of milk, gas, etc. Prices go up!

Higher prices are not a benefit to consumers, but again prices go up every day, that isn't anti-trust.

Knowingly do what exactly? Sell books at the prices the publishers set?

Mafia like? Thats laughable. Nobody forced the publishers to do anything. They saw an opportunity to make more money and took it. Thats why they settled.
 

Mak47

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Mar 27, 2011
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This is absurd. Publishers are not going to go back to the old model. You can't simply revert an industry back by 3+ years with the stroke of a pen.

But this is what happens when bureaucrats, with no idea how the real world functions, make and enforce laws.
 

samcraig

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Jun 22, 2009
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MFN clauses make it seem like only Apple is getting something. Apple, and other small book stores, heck even the big brick and mortar stores can't compete with or don't want to compete with someone who buys 5 billion of something and then sells them at a loss to steal customers. Apple isn't saying only we get this price, they are saying if X gets this price, we want it to. Whats wrong with that?

The clauses themselves didn't make prices go up, the publishers raised the price on the product they were selling. Check the prices of milk, gas, etc. Prices go up!

Higher prices are not a benefit to consumers, but again prices go up every day, that isn't anti-trust.

Knowingly do what exactly? Sell books at the prices the publishers set?

Mafia like? Thats laughable. Nobody forced the publishers to do anything. They saw an opportunity to make more money and took it. Thats why they settled.
eBooks aren't "bought" in bulk. This is about eBooks. Not books. Do you understand the case? I ask because this is now the second time you're posting something that doesn't make sense.

The clauses most definitely made prices go up. Again - I think you're misinformed.

And the publishers actually made less (they stated so) most of the time with the new deal in place. They did it (most likely) for other reasons which I posted in another thread - which deals with saving the printed book market.

----------

This is absurd. Publishers are not going to go back to the old model. You can't simply revert an industry back by 3+ years with the stroke of a pen.

But this is what happens when bureaucrats, with no idea how the real world functions, make and enforce laws.
They already have?
 

WhoDaKat

macrumors 6502
May 20, 2006
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Huh?

The whole point was that all resellers needed to price their books the same.
Huh?

Apple, and other small business bookstores, don't want to sell books at a loss like Amazon. They can't, well Apple could, but its not their business model. And you shouldn't be forced to lose money in order to do business. That seems more anti-trust to me, but hey I'm not a lawyer.
 

Xytal

macrumors regular
Mar 30, 2010
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This is absurd. Publishers are not going to go back to the old model. You can't simply revert an industry back by 3+ years with the stroke of a pen.

But this is what happens when bureaucrats, with no idea how the real world functions, make and enforce laws.
God, ain't that the truth. I really wish the Government would get their heads out of their rears and actually use some common sense...

I know, I'm asking for a lot there.
 

samcraig

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Jun 22, 2009
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Huh?

Apple, and other small business bookstores, don't want to sell books at a loss like Amazon. They can't, well Apple could, but its not their business model. And you shouldn't be forced to lose money in order to do business. That seems more anti-trust to me, but hey I'm not a lawyer.
Probably a good thing. Especially since you have no idea about the facts of this case.

But by all means - keep ranting.
 

burjeffton

macrumors newbie
Oct 18, 2011
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There is already a White House Petition to help bring the DOJ actions under review. It just started today.
Have you been paying any attention to this DOJ and administration? If the WH isn't going to do anything about benghazi, fast & furious, AP wire tapping, IRS scandal, journalist tapping etc, I don't think they're gonna give 2 jits about what the DOJ is doing with Apple.
 

Gasu E.

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Mar 20, 2004
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Not far from Boston, MA.
Don't do the crime if you can't do the time.

But seriously - I do think there are things that are over-reaching or harsh about the judgement in total. Hopefully there's wiggle room or it can be adjusted accordingly.
No; there are two separate issues-- guilt, and the actual punishment. It would have been totally appropriate for the DOJ to assess monetary damages based on the economic cost. It is totally wrong for the DOJ to force Apple into specific business policies that have nothing to do with repairing the original infraction. Moreover, they cannot even argue that they are forcing Apple to behave appropriately, since they are not requiring Amazon to behave in the same way. As Apple says, this is entirely punitive. DOJ cannot just make up a punishment out of thin air.
 

hayesk

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May 20, 2003
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Come on, I'm tired of seeing this tirade about how unfair this is.

Did Apple sign contracts with MFN clauses in them? Yes
Did these clauses force prices to go up? Yes
Are higher prices a benefit to consumers? No
Did Apple knowingly do this with the cooperation of publishers to increase the prices? Yes
Did all these publishers settle and essentially admit guilt? Yes
Or was it because it was financially advantageous to settle rather than fight it out?

And you didn't ask the question of whether higher prices were a benefit to the authors and the industry as a whole.

I'd also like you to comment if you believe the settlement would simply hand the monopoly to Amazon where they are free to raise the prices to Apple-levels and keep the profits for themselves rather than pay more to the authors, resulting in a healthier industry.

So over all, it's pretty clear Apple did engage in a form of price fixing, and they were cough in the act. Wanting to get into a new market is all good, but the way they did it was wrong, and they should get punitive damages for it.

Come into a new market with an innovative product or with better prices and the customers will come. Try to force your way into it by forcing existing players to price higher because you took part in a mafia-like agreement to ensure other players can't price below you? That's dishonest, period.
Maybe, but that doesn't mean the settlement is fair. It's not like you can just say "Apple was guilty - punish them however you please."