Apple Calls the Proposed eBook Settlement Punitive, Draconian, and Unnecessary
Apple has filed their response to the anti-trust settlement offered by the US Dept of Justice earlier today, and it looks like Apple apparently still believes that they can get away with their anti-trust violations.
The full 31 page filing is available over at Scribd, and it’s truly a baffling document. If this document is to be believed then Apple doesn’t think they deserve to be punished at all (seriously, they argue that they didn’t violate anti-trust law).
Instead Apple describes the proposed settlement as draconian:
Plaintiffs’ proposed injunction is a draconian and punitive intrusion into Apple’s business, wildly out of proportion to any adjudicated wrongdoing or potential harm. Plaintiffs propose a sweeping and unprecedented injunction as a tool to empower the Government to regulate Apple’s businesses and 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. The resulting cost of this relief—not only in dollars but also lost opportunities for American businesses and consumers—would be vast.
Apparently Apple believes that this is all the punishment that is necessary:
- (1) reasonable limitations on Apple’s abilityto share information (akin to the publishers’ consent decrees
- (2) a prohibition, tracking the publishers’ consent decrees, on retail price MFNs in agreements with the publisher defendants
- (3) reasonable antitrust training obligations for Apple, lasting a reasonable term. No further relief can be justified under the legal standard governing antitrust injunctions or the Constitution.
That is a far cry from the proposed settlement, which includes provisions for an end to all agency deals, a 10 year anti-trust monitor to watch Apple for further shenanigans, and a final clause that would require Apple to let Amazon, Kobo, et al add links from inside their apps that led to their ebookstores.
I do have to wonder whether Apple was watching the same trial I was watching, or if Apple had read the ruling, or even if Apple had bothered to read the original indictment. I mean, even the judge thought Apple was probably guilty based on just the initial filings, and she has a legal duty to be impartial.
It is my estimation that the settlement proposed by the DOJ this morning was probably the best offer Apple was going to get. Judge Cote has the authority to order a much more severe punishment. And given Apple’s intransigence I think she might do just that. The punishments could start with fines significantly higher than the ones paid by the settling publishers, but that’s just the beginning.
Judge Cote could decide to order Apple to sell off iBooks in order to make sure the conspiracy does not recur, but that’s not all she can do. The judge might even order Apple to sell off the entire content division: iBooks, iTunes, and everything.
Splitting up companies is a common anti-trust punishment, one which dates back to Standard Oil. Judge Cote might decide that Apple’s intransigence necessitated hitting Apple with an even bigger stick and the biggest stick would be to make Apple give up control of their music, video, ebook, and periodical division.
This last option is a little crazy, I will admit, but it’s not impossible.