Thursday, August 16, 2012

Apple Inc.(NASDAQ:AAPL) Considers DoJ E-Book Settlement Illegal

Apple Inc.(NASDAQ:AAPL) has opposed the settlement proposal of the US Department of Justice in a legal memo on Wednesday. The proposal would require the company to take apart its present e-book business structure with three publishing houses.

paidContent was the first one to report Apple’s filing. It was a response to a recent DoJ note in support of a planned settlement that asked the New York district court to put down a decision without any future hearings. The government has placed an argument that a quick fast judgment would be the best decision that can be taken in interest of customers as well as the settling parties as they would not be required to pay fees for ongoing lawsuit.

Apple’s counsel expresses disagreement by writing that the proposed judgment would put an end to Apple’s bargained-for contracts. The decision made by the court would be ultimate and irreversible as the company would not be able to reinstate terminated contracts if it had to win a lawsuit in future.

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The issue seems to be the agency model of Apple that allows a publisher to set e-book pricing in a favorable agreement that forbids the company to offer the same content to other resellers at a lower cost. As per DoJ, Apple and its publishing partner has used the business plan to fabricate inflation of e-book rates. This has hurt consumers.

Apple thinks that a settlement would illegally penalize the company. It is seeking more relief than a negative post-trial outcome would generate.

Apple mentioned that it thinks it is all a big conspiracy to compel Amazon to adopt the agency model.
Two book publishers, who were names in the settlement, has also filed opposition petitions on Wednesday with Penguin taking help of sales figures that support the agency model.

Of late, DoJ has dismissed 868 public comments that were made in favor of Apple’s e-book sales model. 

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