DOJ Backtracks on Apple Punishment Recommendations

The U.S. Department of Justice backtracked from harsh penalties it recommended the U.S. Southern District Court impose on Apple as punishment for colluding to fix the price of ebooks.

In early August, the DOJ filed a proposed punishment with the court that, if adopted by Judge Denise Cote, would have drastically changed how Apple sold content through iTunes, the iBookstore and its app store and how digital content was sold in apps.

In the new documents, the DOJ is requesting that Apple be forced out of agency pricing agreements for five years (as opposed to ten) and that the government not regulate sales in the iTunes store and the app store. In its original filing, it seemed as if the DOJ wanted the court to bar Apple from charging a 30% commission for sales made within apps (a commission that could be applied to ebooks in a Kindle app, for instance). In its latest filing, the DOJ writes that Apple does not in fact charge this commission and did not backtrack on language around the commission. It still is requesting that Apple be forced to allow links to competitor ebook retail sites within competitor apps without having to compensate Apple for any subsequent purchases.

The DOJ also adopted a suggestion by Judge Cote that the government force publishers to negotiate new ebook contracts with Apple on a staggered schedule to prevent any group negotiation. Publishers that settled first would have the first opportunity to negotiate.

For the publisher negotiation schedule as well as a more in-depth discussion of the punishment proposal, see Publishers Lunch. According to Pub Lunch, Apple is expected to file a response before the end of the day.

Related: Should the U.S. Government Be Allowed to Run the Ebook Industry

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2 thoughts on “DOJ Backtracks on Apple Punishment Recommendations

  1. Jimmy Weber

    This seems like an infringement on the historical capitalist system of business in America. Nobody was forced to sign any contract or to buy any book. The more we keep government out of business decisions the better.

    Reply
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