Department of Justice submits new punishment proposal for Apple, still as ludicrous as the old one

Department of Justice submits new punishment proposal for Apple, still as ludicrous as the old one

The Department of Justice today submitted a reworked punishment for Apple in the recent ebook lawsuit. Their previous proposal among other things, would have changed Apple's App Store policies about linking to outside stores within apps. The revised proposal, while mostly the same to the previous one, focuses more on Apple's in-app purchase policies. The DOJ argues that Apple's policies discriminate against digital goods, according to GigaOM:

At the hearing earlier this month, the DOJ argues, "Apple misrepresented the factual circumstances surrounding this matter, including how the App Store operated and operates…It simply is not true that Apple receives a 30 percent commission from all retailers for all goods sold through apps." It uses the examples of shoes at Zappos and physical books at Amazon — seemingly arguing that Apple should treat physical and digital goods in the same way.

The Department also alleges that Apple's 2011 policy change, which said that apps could not link to outside stores for digital goods, was a retaliatory measure against Amazon for showing that it was easy to switch from iPhone to Android and keep all of your Kindle books. Because of this, the DOJ wants the court to order an end to any agreement that Apple has made with content providers that would fix the price of their content with other retailers. They have also claimed that because Apple has proteseted these measure, that there is cause for worry about what Apple may currently be doing, or what their plans may be, with content like music and televison.

The Justice Department also wants Apple to stagger their negotiations with book publishers, rather than talk to all of them at once. This way, the government feels, there is a lower chance of collusion between the publishers and Apple. The DOJ outlined a schedule for negotiating agency contracts for ebooks between Apple and the various publishers. Hachette could negotiate with Apple 24 months after the judgment, HarperCollins waits 30 months, Simon & Schuster 36 months, Penguin 42 months, and Macmillan waits 48 months.

The tweaked proposal from the DOJ contains slightly softer than the original. Instead of the injunction on agency pricing lasting for ten years as originally proposed, the DOJ says that it could last only five years, with an option for year-by-year extensions if the Department deems it necessary. But they are also insisting that Apple needs an external antitrust monitor, in order to prevent something like this from happening again.

Source: GigaOM

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Joseph Keller

News Writer for Mobile Nations. Fascinated by the ways that technology connects us.

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Reader comments

Department of Justice submits new punishment proposal for Apple, still as ludicrous as the old one


yet another damning piece of evidence presented by the DoJ. Jobs sure did do a lot of stupid things with regards to ebooks.

Wow you guys are so much Apple lovers that you do not realize when the Justice department is doing the right thing. Why shouldn't ebook publishers be able to link to their own stores? This is a good thing and increases competition which you free market advocates should love. I for one hope the Justice Department wins. Apple needs to be tamed.

I'm probably looking at things too simplistically but is this any different than Costa setting up a franchise in your somebody elses store?
Sure they may not use IAP to sell coffees but the rent is all geared to include stuff like that in addition to the terms of lease?

Forcing them to treat digital and physical products is stupidity in it's self they are very different and require dealing properly in different ways

Were you one of the people saying it was "ludicrous" when they were going after Microsoft for antitrust issues with Windows and IE being bundled? The things they went after Microsoft for were a lot less meaningful than these issues with Apple.