May 25, 2012

Apple tells the DOJ to get real


In a blistering riposte to the Department of Justice lawsuit charging it and five of the Big Six publishing houses with antitrust violations, Apple has called the government’s case “a ‘fundamentally flawed’ endeavor that could discourage competition and harm consumers” by protecting the actual monopoly — Amazon.

According to a Reuters report, “Apple said it has not conspired with anyone or fixed prices for e-books in an effort to thwart Inc’s dominance of that fast-growing market.”

The report, by Jonathan Stempel, further details Apple’s filing:

… Apple argued that its foray into e-books has actually fueled demand for e-books by forcing Amazon and rivals, including Barnes & Noble Inc, to compete more aggressively, including by upgrading e-reader technology.

“Apple’s entry into e-book distribution is classic procompetitive conduct” that created competition where none existed, Apple said in its court papers.

“For Apple to be subject to hindsight legal attack for a business strategy well-recognized as perfectly proper sends the wrong message to the market,” it added. “The government’s complaint against Apple is fundamentally flawed as a matter of fact and law.”

A PC World report by John Ribeiro summarizes Apple’s filing thusly:

… Apple said that without the agency agreements, it would not have entered e-book distribution, given the circumstances of the business as it existed prior to its entry. It had already used the agency model in its App Store, including in sales of books through the store before the iBookstore was set up. But it did not seek to limit e-book retail price competition, did not reach an agreement to cause retail price competition to “cease” and did not agree that “retail eBook prices would increase significantly,” it said in the filing.

In short, as PC World puts it, Apple’s charge is that “The U.S. government has sided with monopoly rather than competition in bringing a case of e-book price-fixing against Apple.”


Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House. Follow him on Twitter at @mobylives