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Apple dismisses DOJ's proposed e-book penalties as 'a draconian and punitive intrusion'

post #1 of 121
Thread Starter 
Apple quickly responded to a proposed e-book price fixing settlement from the U.S. Department of Justice on Friday, declaring the suggested penalties "wildly out of proportion to any adjudicated wrongdoing or potential harm."

Summation
Apple's closing slide in its e-book antitrust case. | Source: U.S. District Court


The company behind the iBookstore lashed out at the proposed injunction as a "draconian and punitive intrusion" into its business, asserting that the penalties imposed would 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," Apple wrote in a court filing. "The resulting cost of this relief ??not only in dollars but also lost opportunities for American businesses and consumers ? would be vast."

The comments were made in reaction to a proposed settlement published by the DOJ earlier Friday, suggesting that Apple be forced to allow competitors such as Amazon and Barnes & Noble to link to their own e-book stores within their own iOS App Store software. Apple currently takes a 30 percent cut of all content sold in native iOS apps, and bars developers from circumventing that policy by linking to external websites for content sales.The DOJ has proposed a series of sanctions against Apple after it was found guilty of conspiring to fix e-book prices. Apple has slammed the DOJ proposals as "draconian," "invasive," and "wildly out of proportion."

But the DOJ proposal, made after Apple was found guilty of price fixing e-book titles, would go well beyond the company's iBookstore for iPhone and iPad. The DOJ also suggested that Apple be prohibited from entering agreements with suppliers of "music, movies, television shows or other content that are likely to increase the prices at which Apple's competitors may sell that content."

Apple blasted the proposal for containing, in the company's view, "broad, invasive, and vague provisions that are untethered to the actual findings of antitrust liability in this case." The filing reminds the court that it was of the view that U.S. antitrust laws "should be applied with care," respecting the unique features of any market.

If the court is unwilling to reject the injunction outright, Apple's attorneys suggested that "a narrower and more modest injunction" that is "carefully tailored" to the court's findings be proposed.



The DOJ argued that requiring Apple to link to Amazon, Barnes & Noble and other e-book sellers would allow customers to "easily compare Apple's prices with those of its competitors." The Justice Department also suggested requiring Apple to terminate its existing e-book agreements with the five major book publishers it was found to have conspired with to fix prices.

The proposed sanctions would also prevent Apple from entering new e-book distribution contracts with the five biggest publishers for five years. The proposal is pending court approval.

Apple has already appealed the ruling made by U.S. District Judge Denise Cote. The book publishers were also originally targeted by the DOJ, but unlike Apple, they opted to settle out of court.

The U.S. government took issue with Apple after the iPad maker led the charge in convincing publishers to switch to a so-called "agency" pricing model. That prevented content owners from being able to sell the same titles at a lower price elsewhere, without offering the same price on Apple's iBooks platform.

iBooks


In contrast, the e-book industry prior to the launch of the first iPad was under the "wholesale model" preferred by market leader Amazon. In that model, resellers such as Amazon had the power to set prices, selling titles at or below cost if they chose to do so.

Publishers agreed to the agency model with Apple because it gave them the ability to set book prices as they saw fit. Those companies were dissatisfied with Amazon's low-margin model, which has made it difficult for other booksellers to compete with the online retailer.

Though Amazon has been the dominant e-book seller for years, Apple's agreements with the publishers led to an industry-wide change that increase e-book prices. The Department of Justice saw that as unfair to consumers, which led to the antitrust suit.
post #2 of 121
Interesting to compare this to the punishment (nearly nothing) that Microsoft got about ten years ago when they were declared an abusive monopoly for IE. Allowing links to non-book content is way beyond what should be appropriate. However, they are probably bluffing and making it huge so that Apple will be more willing to negotiate something smaller without as much of a fight.
post #3 of 121
Department of Justice my ass. Department of Injustice is more like it. Glad to see Apple didn't waste any time responding to this trash.
post #4 of 121
Repeat after me, Apple: money greases the wheels of government. Every other corporation knows the law is for sale, so you'd better learn to pay up!
post #5 of 121
One again the US government is flexing its muscles, from that sham trial to these I proposed punishments. The US government will stop at nothing to get a hold of those overseas profits and will put the screws to them in numerous ways to do so. Apple should have contributed more to political campaigns and lobbied more and they would not be in this mess. This is nothing more than a shakedown disguised as "justice". The government is broke and are looking to the private sector for more revenue using the power of the courts as their "enforcers".
post #6 of 121

Doesn't seem like such a vitriolic response is going to do them many favours.  You've already been found guilty Apple, acting like you're the poor little multinational being wronged is pretty pathetic.

 

By all means protest the suggestion if you feel it's disproportionate, but do it with some grace.

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post #7 of 121
Amazon is allowed to sell product at such a low price that it is losing money every quarter. And doing so if kills its competitors (good bye Broders, Barnes and Nobles being the next). Consumer may be happy to see lower prices in a short term. In the longer term wham only Amazon will have survived it will be another story.
post #8 of 121
This just becomes corruption of the highest order!
This is a governmental department trying to run Apples business strategy?
All they want is to Break Apple since Steve Jobs passing, For they were to scared to try
with him there.

Yes Apple has faced an uphill battle all along and continues to-be a well run company
even throughout this.
Laws are made, Rules are laid and many others have broken, colluded and bribed
without much punishment!

So they really wish Apple to stop their business in Media Music, TV, Books etc to help
those poor underwhelmed corporations Amazon among them from a Monopoly?
post #9 of 121
Quote:
Originally Posted by Crowley View Post

Doesn't seem like such a vitriolic response is going to do them many favours.  You've already been found guilty Apple, acting like you're the poor little multinational being wronged is pretty pathetic.

 

By all means protest the suggestion if you feel it's disproportionate, but do it with some grace.

Your brilliant advice is noted.

 

Now, go learn something about the way in which the adversarial system of US justice operates.

post #10 of 121
Quote:
Originally Posted by AppleInsider View Post

The DOJ argued that requiring Apple to link to Amazon, Barnes & Noble and other e-book sellers would allow customers to "easily compare Apple's prices with those of its competitors." The Justice Department also suggested requiring Apple to terminate its existing e-book agreements with the five major book publishers it was found to have conspired with to fix prices.

The proposed sanctions would also prevent Apple from entering new e-book distribution contracts with the five biggest publishers for five years. The proposal is pending court approval.

 

If they have to terminate their current contract and cannot create a new one for 5 years, then wouldn't they be unable to sell any books from those publishers for those five years?  If I understand this correctly, wouldn't that effectively force Apple to call the entire e-book market a big loss?  Someone please correct me if I am wrong.

 

What about my iBook collection?  How does this help consumers?  If I understand this correctly, the DOJ very nearly wants Apple to remove itself from the e-book market, and I don't understand how that can be in anyone's best interest... except for Amazon.

post #11 of 121

There is flagrant price fixing in the oil markets, the industrial metals markets, the precious metals markets, LIBOR interest rate fixing, fixing in the ISDAfix part of the world ... and yet the DoJ found the time to go after ... ebook pricing?!

 

Then they come out with this?  As one Yale professor put it, the telescopes of Planet Washington don't reach the surface of Planet Earth.

post #12 of 121
Quote:
Originally Posted by iSteelers View Post

One again the US government is flexing its muscles, from that sham trial to these I proposed punishments. The US government will stop at nothing to get a hold of those overseas profits and will put the screws to them in numerous ways to do so. Apple should have contributed more to political campaigns and lobbied more and they would not be in this mess. This is nothing more than a shakedown disguised as "justice". The government is broke and are looking to the private sector for more revenue using the power of the courts as their "enforcers".


and your solution is for backdoor sleazy lobbying - bribing your democratically elected government to rule against the will of the people???

 

So your basically saying your willing to trade your freedom for some cash.

 

Good for you. I'm sure that's going to work out wonderful for your nation in the end.

post #13 of 121
Quote:
Originally Posted by rain View Post


and your solution is for backdoor sleazy lobbying - bribing your democratically elected government to rule against the will of the people???

 

So your basically saying your willing to trade your freedom for some cash.

 

Good for you. I'm sure that's going to work out wonderful for your nation in the end.

 

I think it's based on a presumption that Amazon did it, so they only way to fight that is to play dirty too. Not saying I agree, but that's what it feels like had happened.

post #14 of 121
Quote:
Originally Posted by anantksundaram View Post

Your brilliant advice is noted.

 

Now, go learn something about the way in which the adversarial system of US justice operates.

So you think the court sides with whoever shouts loudest?  When a verdict has already been passed?

 

Seems like you're taking the "advsersarial" part of the system and interpreting it as pugil sticks.  That's not how it works.  Reasoned negotiation in the eyes of the court is always seen more favourably by arbitrators.

 

 

Thanks for the sarcasm and dismissiveness by the way, that's always a great sign that I'm talking to someone with a measured point of view.

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post #15 of 121
Doj s actions are beyond infuriating.
This is not the ex soviet union... What the F is happening to this country!
Oh ya.... Obama and his administration are happening to this country!
post #16 of 121

I have read so many articles on this case and I still don't get it.  Can someone explain to me in plain English what Apple did wrong in the eyes of the DOJ?

post #17 of 121
Quote:
Originally Posted by patrickwalker View Post

There is flagrant price fixing in the oil markets, the industrial metals markets, the precious metals markets, LIBOR interest rate fixing, fixing in the ISDAfix part of the world ... and yet the DoJ found the time to go after ... ebook pricing?!

 

Then they come out with this?  As one Yale professor put it, the telescopes of Planet Washington don't reach the surface of Planet Earth.

 

More recently, the Potash market :-)

 

I was under the impression the White house deadline is today to Veto the iphone ban on monday.  No news on that? 

post #18 of 121
Quote:
Originally Posted by Crowley View Post

Doesn't seem like such a vitriolic response is going to do them many favours.  You've already been found guilty Apple, acting like you're the poor little multinational being wronged is pretty pathetic.

 

By all means protest the suggestion if you feel it's disproportionate, but do it with some grace.

So what part of

 

"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," Apple wrote in a court filing. "The resulting cost of this relief ??not only in dollars but also lost opportunities for American businesses and consumers ? would be vast."

 

is "graceless" or "vitriolic" (not counting all the question marks introduced by AI)?

 

"vague new compliance regime" is accurate and measured.

"applicable only to Apple" is true.

"intrusive oversight" is accurate.

etc. etc.

post #19 of 121
Quote:
Originally Posted by Crowley View Post

Doesn't seem like such a vitriolic response is going to do them many favours.  You've already been found guilty Apple, acting like you're the poor little multinational being wronged is pretty pathetic.

 

By all means protest the suggestion if you feel it's disproportionate, but do it with some grace.

 

Ha! Apple is appealing the ruling on that trial, as is their legal right and their responsibility to Apple's shareholders.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #20 of 121
Quote:
Originally Posted by Yojimbo007 View Post

Doj s actions are beyond infuriating.
This is not the ex soviet union... What the F is happening to this country!
Oh ya.... Obama and his administration are happening to this country!

 

Seems to me there is an unending string of large businesses on which various government entities are performing the old "Chicago shakedown". Surely the mob runs Washington now.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #21 of 121
Quote:
Originally Posted by newtomac1997 View Post

I have read so many articles on this case and I still don't get it.  Can someone explain to me in plain English what Apple did wrong in the eyes of the DOJ?
Yes... Doj became amazons crony....
And obama turned this country into a draconian mess. ( govermnent everywhere... Now. Doj wants to.Monitor every business deal apple makes through itunes And choose if they like it or not ). Lol... Sounds like the ex soviet union to me..
This country is in serious trouble.
post #22 of 121
I won't be surprised if some of the DOJ lawyers resign when this is over to work for Amazon.
post #23 of 121
Quote:
Originally Posted by jungmark View Post

I won't be surprised if some of the DOJ lawyers resign when this is over to work for Amazon.
Haha... They already do! So does the whole of doj!
This whole thing is infuriatingly absurd.
post #24 of 121
Quote:
Originally Posted by brutus009 View Post

 

If they have to terminate their current contract and cannot create a new one for 5 years, then wouldn't they be unable to sell any books from those publishers for those five years?  If I understand this correctly, wouldn't that effectively force Apple to call the entire e-book market a big loss?  Someone please correct me if I am wrong.

That was my interpretation as well, but I'm also not sure ... 1confused.gif

post #25 of 121
Obama to american people:
We have a few good things left in this country, .. Lets make a change.. Lets destroy them all! Yes we can"
Hope apple has the balls to see this absurdness smoked!
post #26 of 121
I came here just to see how AppleInsider would somehow skew this as positive news. You do realize... today's Apple fans are the same as Microsoft fans were a decade ago? Some people like what's new. Others are stuck go to what's big today. APple is big today. I am tying this on an Apple machine. But seriously, Apple is just another company now.
post #27 of 121
"draconian and punitive intrusion"

Eric Holder, strongly protesting, says, "Just another case of Republicans trying to create a 'phony scandal!'"
post #28 of 121
Quote:
Originally Posted by bwik View Post

I came here just to see how AppleInsider would somehow skew this as positive news. You do realize... today's Apple fans are the same as Microsoft fans were a decade ago? Some people like what's new. Others are stuck go to what's big today. APple is big today. I am tying this on an Apple machine. But seriously, Apple is just another company now.

 

What Microsoft fans?

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #29 of 121

This ruling solves what? jacks up prices on ipad users? Same thing Apple is guilty of??

Goverment is a bunch of hypocrites...

But see where  Obama gets his biggest campaign money from and you can figure it out.. 

The old squeaky wheel gets the grease.

 

http://www.opensecrets.org/pres12/contriball.php

Huh?
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Huh?
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post #30 of 121
Quote:
Originally Posted by Crowley View Post

Thanks for the sarcasm and dismissiveness by the way, that's always a great sign that I'm talking to someone with a measured point of view.

Excuse me, but to suggest that Apple is being "vitriolic", has been "already found guilty" (as though it's for sure, since the verdict may or may not be thrown out on appeal), acting like a "poor little multinational being wronged", being "pathetic", and showing a lack of "grace" is far from measured.

 

You should not dish it out if you can't take it.

post #31 of 121
Quote:
Originally Posted by patrickwalker View Post

There is flagrant price fixing in the oil markets, the industrial metals markets, the precious metals markets, LIBOR interest rate fixing…

Telecoms, ISPs, power companies…

It's just who pays them off.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply
post #32 of 121

I wonder what the DOJ punishment to the NSA will be for wrongfully eavesdropping on internet traffic without warrants? Oh right, the DOJ apparently signed off on using the constitution as toilet paper

Help! I'm trapped in a white dungeon of amazing precision and impeccable tolerances!

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Help! I'm trapped in a white dungeon of amazing precision and impeccable tolerances!

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post #33 of 121
So before Apple's iBooks Amazon pretty much were able to set the price of the E-books. I am now convinced that there are some real issues with the legal system in America. I cannot say people are being paid off but it would not be the first time something like that happened. Basically if this continues the Americans are trying to break up Apples whole ecosystem. I have to ask why? Apple NEVER collided with the largest eBook retailer (Amazon) to fix prices, they ONLY allowed the book retailers to set the price on THEIR store. If Amazon wanted to use the same model for pricing and CHANGE THEIR model then that was THEIR choice without any influence from APPLE. If I were Apple I would be thinking very carefully of my plans to expand my operations in America and would be suspending all expansion projects in America and then looking to more favourable economic areas. On that front may I suggest Europe? I really hope someone in America stops and rexamines this because I am now beginning to think the other large tech companies have stopped trying to compete and ate now trying every dirty tactic they can find to gain marke share. LONG LIVE APPLE.... DOWN WITH THE GOOGLE, SAMSUNG, AMAZON alliance.

Amazon owned companies http://www.labnol.org/tech/amazon-owed-companies/19605/
Google owed companies http://en.wikipedia.org/wiki/List_of_acquisitions_by_Google
Samsung owed companies and alliances http://en.wikipedia.org/wiki/Samsung_Group

Apple owned companies and alliances: cannot find them. But from memory intrinsity, finger works, are but two

I realise the anti apple stalwarts will flame this, but I'm sorry I cannot see how Samsung can have a jury decide that they broke a patent only to have ONE judge reverse it. Then have other judges reverse and overturn pattents in rapid succession. I REFUSE to believe the USPO is that bad. There is something more going on here. People with these pattents would/should have brought their pattents to the attention of the courts etc before Apple became big. As they did not and only now that Apple has a lot of spare cash are these coming to light then I have to assume its a money grabbing exercise. Sorry I cannot help felling that there is something more going on. Anyway to make me feel bette: no more goggle, Samsung or amazon for me! On a separate note Amazon where is the book I ordered or the cash back please! Of course this is the last time I will ever use you now!
post #34 of 121
Quote:
Originally Posted by nagromme View Post

Repeat after me, Apple: money greases the wheels of government. Every other corporation knows the law is for sale, so you'd better learn to pay up!

Joining in with the principles of one's neighbourhood hoodlums sinks the standards of propriety (degenerating moral behaviour) even further. It takes the principled ones in playing fields, from homes, school yards to corporate boards and public governing bodies to demand standards of propriety in universal matters that govern all civilizations of democratic states, unifying all individuals in an understanding of human rights, allowing each citizen a fair role/participation in the state. It is what supports all social and economic strata to cooperation against the reckless state of anarchy where chaos rules. Are the lessons from WWII forgotten so soon?

nagromme, I am assuming sarcasm was to be understood from your post.

When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

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When I find time to rewrite the laws of Physics, there'll Finally be some changes made round here!

I am not crazy! Three out of five court appointed psychiatrists said so.

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post #35 of 121
Quote:
Originally Posted by brutus009 View Post

If they have to terminate their current contract and cannot create a new one for 5 years, then wouldn't they be unable to sell any books from those publishers for those five years?  If I understand this correctly, wouldn't that effectively force Apple to call the entire e-book market a big loss?  Someone please correct me if I am wrong.

What about my iBook collection?  How does this help consumers?  If I understand this correctly, the DOJ very nearly wants Apple to remove itself from the e-book market, and I don't understand how that can be in anyone's best interest... except for Amazon.

Yes, it seems they want to give Amazon a monopoly. They also want to prohibit Apple from selling TV shows, movies, etc. it seems... where is this all coming from?

Also, why not just make every eBook drm free? That would be consumer friendly. Giving Amazon everything will kill innovation. Next they're going to tell us that Apple did nothing for the music industry.
post #36 of 121
Look, I think the MFN clause was something that Apple used with good intentions for their business, but they could have foreseen it would cause trouble down the road. In Apple other businesses like movies and music Apple did better because they were one of the first to enter the market. Apple tried too hard to protect themselves with entering this new eBook business. They made choices that made sense to them, but they didn't think things through. I just see it as bad judgement in a difficult situation in which the publishers wanted to redefine their position, and Amazon made the playing field for new entrants one of losing money. This was never the case in Apple's other businesses.

In the end, even if Apple did something wrong, I feel the DOJ is handling the situation badly. It makes them look like they have a score to settle. But it happens so many times with the justice department in America; it's all about personal crusades and spite, and more. It shouldn't be about hurting Apple; it should be about trying to correct the balance. This doesn't mean removing Apple entirely out of the equation, as this would create an undesirable market effect. It would be like prohibiting Microsoft from creating a browser, or even worse prohibiting Microsoft from having control over what components go into Windows.
Edited by John F. - 8/2/13 at 2:27pm
post #37 of 121
Quote:
Originally Posted by bwik View Post

I came here just to see how AppleInsider would somehow skew this as positive news. You do realize... today's Apple fans are the same as Microsoft fans were a decade ago? Some people like what's new. Others are stuck go to what's big today. APple is big today. I am tying this on an Apple machine. But seriously, Apple is just another company now.

Apple doesn't have a monopoly in ebooks (amazon), phones (Android is winning) or computers. But other that, they are exactly like Microsoft.
post #38 of 121
Quote:
Originally Posted by bwik View Post

I came here just to see how AppleInsider would somehow skew this as positive news.

Maybe don't come here in the future, then.
Quote:
You do realize… today's Apple fans are the same as Microsoft fans were a decade ago?

We don't realize it, as it isn't the case.
Quote:
Some people like what's new. Others are stuck go to what's big today. Apple is big today. I am tying this on an Apple machine. But seriously, Apple is just another company now.

First, no it isn't. Second, what does any of that have to do with the illegal penalties?

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply
post #39 of 121

A lot of people are discovering Barack and company aren't quite what they expected.

   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

  MA497LL/A FB463LL/A MC572LL/A FC060LL/A MD481LL/A MD388LL/A ME344LL/A

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   Apple develops an improved programming language.  Google copied Java.  Everything you need to know, right there.

 

  MA497LL/A FB463LL/A MC572LL/A FC060LL/A MD481LL/A MD388LL/A ME344LL/A

Reply
post #40 of 121
Quote:
Originally Posted by anantksundaram View Post

Excuse me, but to suggest that Apple is being "vitriolic", has been "already found guilty" (as though it's for sure, since the verdict may or may not be thrown out on appeal), acting like a "poor little multinational being wronged", being "pathetic", and showing a lack of "grace" is far from measured.

 

You should not dish it out if you can't take it.

 

I can take it.

 

It's fair to say that my post wasn't on Apple's side.  That doesn't mean it isn't measured though, and it's not an argument against anyone on this forum.

 

Not really sure what your point is, beyond a lot of quotations.

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