August 22, 2014

Apple Seeks Trial in Antitrust Ebook Case

From

In a memo filed this week with the Southern District Court of New York, Apple has refused a proposed settlement with three book publishers, and has said that it will instead seek a trail in the antitrust case pressed by the U.S. Department of Justice (DOJ).

The DOJ initially sued Apple, Hachette SA, HarperCollins, Macmillan, Penguin, and Simon & Schuster in April this year, alleging that they had conspired to raise ebook prices in response to pricing changes by Amazon. Hachette, HarperCollins, and Simon and Schuster quickly settled with the DOJ.

But Apple took issue with the terms of the DOJ’s proposed settlement, which would terminate its remaining contracts and prohibit the company from selling ebooks using the agency model—in which publishers set their own pricing—“before a single document has been introduced into evidence, before any witness has testified, and before the Court has resolved the disputed facts. Once its existing contracts are terminated, Apple could not simply reinstate them after prevailing at trial. The Court’s decision would be irreversible. Nullifying a non-settling defendant’s negotiated contract rights by another’s settlement is fundamentally unfair, unlawful, and unprecedented.”

The memo also argues that the government has failed to show how Apple’s contracts have caused harm to consumers, which is traditionally a keystone of antitrust cases.

“Apple is taking a bold stance by ignoring the Judge’s admonition to the parties not to oppose the settlement, other than submitting comments,” attorney and RoyaltyShare CEO Bob Kohn told a reporter for paidContent.org. “Apple makes a good point that the proposed settlement terminates Apple’s agency contracts without a trial and that would be an unprecedented violation of Apple’s right to due process.”

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Matt Enis About Matt Enis

Matt Enis (menis@mediasourceinc.com; @matthewenis on Twitter) is Associate Editor, Technology for Library Journal.

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