The United States offered to ease the terms of a proposed civil
injunction against Apple Inc for conspiring to raise ebook prices, but
the company said the revised proposal is still designed to "inflict
punishment" and must be rejected.
(Also see: US proposes remedy for Apple ebook price-fixing)
At issue is how to ensure that Apple
does not violate antitrust law, following a July 10 ruling by U.S.
District Judge Denise Cote in Manhattan that it had conspired with five
major publishers to undermine pricing by rivals including Amazon.com
Inc, which dominates the market for electronic books.
(Also see: Apple conspired to raise prices of ebooks, rules judge)
the government is overreaching by insisting that it hire an external
monitor, let ebook retailers add hyperlinks to their own websites in
their ebook apps without charge, and face limits on how it negotiates
for other content including movies, music and TV shows.
Cote must approved any injunction.
a court filing, the U.S. Department of Justice, joined by 33 U.S.
states and territories, suggested halving the length of its previously
proposed injunction to five years from 10, with leave to seek as many as
five one-year extensions if needed.
At Cote's suggestion, they
also recommended that Apple hold staggered negotiations with the
publishers starting in two years, hopefully minimizing the chance of
future collusion, and removed previously proposed language that they
said Apple had claimed would hurt its ability to run its popular App
But in rejecting other changes that the company wanted, and
while expressing a desire not to "unnecessarily harm Apple," the
governments said the Cupertino, California-based company's continuing
refusal to admit it did anything wrong warranted tough medicine.
simply, Apple wants to continue business as usual, regardless of the
antitrust laws," the filing said. "This court should have no confidence
that Apple on its own effectively can ensure that its illegal conduct
will not be repeated. There must be significant oversight by someone not
entrenched in Apple's culture of insensitivity to basic tenets of
Letter and spirit of law
In a separate
court filing, Apple said the proposal for an external monitor "exceeds
the bounds of even criminal price-fixing cases," and reflects an effort
"to use this civil injunction to inflict punishment, which is
The company said its own proposed remedies are
stringent enough, and enable it to remain "one of the world's most
innovative companies, while acting consistently with both the letter and
spirit of the antitrust laws."
Apple has said it is appealing from Cote's July 10 ruling.
five publishers, all of which have settled with regulators, include
Lagardere SCA's Hachette Book Group Inc, News Corp's HarperCollins
Publishers LLC, Penguin Random House LLC, CBS Corp's Simon &
Schuster Inc, and Verlagsgruppe Georg von Holtzbrinck GmbH's Macmillan.
Cote has scheduled a May 2014 trial to determine damages, which could total hundreds of millions of dollars.
had ordered both sides to hold talks to resolve their differences over
an injunction, but the talks failed. The governments said some of
Apple's proposals were even less restrictive than what the publishers
Gina Talamona, a Justice Department spokeswoman, was
not immediately available for comment. Tom Neumayr, an Apple spokesman,
was not immediately available for comment.
The case is U.S. v. Apple Inc et al, U.S. District Court, Southern District of New York, No. 12-02826.
© Thomson Reuters 2013