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Department of Justice defends original price fixing settlement, calls Apple and publisher comments 'self-serving'

Department of Justice defends original price fixing settlement, calls Apple and publisher comments 'self-serving'


The Department of Justice has said it will move forward with its price fixing case as planned after taking comments from a number of parties, some of which it characterized as "self-serving" in their defense.

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After receiving 868 public comments on its investigation of possible ebook price fixing, the US Department of Justice has responded (PDF) with harsh words for Apple and major publishers, saying that it will continue with the case and settlements as planned. While reiterating many of its original claims, it also argued against its critics, particularly those who believe ebook sellers and publishers were responding to monopolistic behavior by Amazon. Antitrust laws were "enacted to protect competition, not competitors," the statement says, characterizing the complaints of Apple and others as "self-serving."

While the Justice Department maintains that it found evidence of predatory behavior by Amazon "lacking," it says that such behavior would still not justify a conspiracy. "Even if there were evidence to substantiate claims of 'monopolization' or 'predatory pricing,' they would not be sufficient to justify self-help in the form of collusion." It also argues that far from increasing innovation, "Apple's entry into the ebook market was not immediately successful." Instead, Barnes & Noble was responsible for much of Amazon's lost market share, and some innovations Apple has received credit for — like color ebooks — were already in the works.

Central to the case is the agency model, in which publishers set prices and sellers take a cut of the sale price. Publishers like Barnes & Noble have credited the model with stimulating the ebook market and complained that the current settlement goes "overboard" in limiting it. The DoJ, meanwhile, says that publishers who were not charged with collusion can continue to use the model, and defendants can move back to it within two years so long as they do so "unilaterally." Several publishers have already settled, but the Justice Department is still looking at a long legal battle.