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Apple shouldn't be 'rewarded' with less severe punishments for ebook price fixing, says DoJ

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Justice Department suggests publishers want to go back to their old ways


Apple doesn't deserve the less harsh, shorter term punishments dealt to publishers involved in the ebook price-fixing case, according to a filing by the Justice Department. Without saying as much directly, the letter from DOJ lawyer Lawrence Buterman hints that things may have worked out more favorably for Apple — at least in terms of repercussions — had the company opted to join the five implicated publishers in settling earlier. "Apple should not be rewarded with the same terms received by those that chose to settle to avoid the risks of litigation," it reads. The filing serves as a response to objections raised by Hachette, HarperCollin, Macmillan, Penguin and Simon & Schuster over the DOJ's proposed penalties against Apple.

Publishers very much favor the "agency model" that Apple embraced with its iBookstore, which placed ebook pricing power in their hands rather than letting Amazon and Barnes & Noble set their own cost structure. And while they've already agreed to abandon the agreements for a period of two years, the companies maintain that forcing Apple to avoid such deals for five years goes too far. 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" the publishers wrote yesterday.

Justice Department insists penalties are 'necessary'

But the Justice Department insists the proposal is "necessary" to prevent Apple from reverting to its old ways. One thing's clear: the DOJ isn't pleased to see the publishing industry again uniting so soon after the major case. "There is reason to believe the publisher defendants may be positioning themselves to pick things back up where they left off as soon as their two-year clocks run," the letter says. This in and of itself justifies Apple's five-year penalty, which Buterman says will "ensure that Apple (and hopefully other retailers) can discount ebooks and compete on retail price for as long as possible." Judge Denise Cote will have both Apple and the Justice Department in the court room today to further discuss the proposed terms.