In the wake of US District Judge Denise Cote's ruling that Apple colluded with book publishers to raise the price of e-books, the DOJ yesterday issued a proposal aimed at remedying the alleged damage caused by Apple.
To say that the DOJ proposal is harsh and curiously overbroad would be an understatement. The proposal calls for Apple to put an immediate end to its existing agency-model contracts with book publishers. It also would preclude Apple from "entering into agreements with suppliers of e-books, music, movies, television shows or other content that are likely to increase the prices at which Apple's competitor retailers may sell that content."
What's more, the proposal calls for Apple to allow e-book retailers like Amazon and Barnes & Noble to provide links to purchase e-books from within their own e-book apps.
And as if that weren't enough, the proposal also lays out that Apple should be appointed an external monitor by the court who will oversee Apple's activities going forward and ensure that Apple doesn't violate any antitrust laws. On top of that, the DOJ also wants Apple to hire an internal antitrust compliance officer to train and educate Apple executives and employees about the finer points of antitrust law.
Apple has since filed a brief in opposition to the DOJ's proposed remedy where it naturally objects to nearly all aspects of the proposal.
The brief, first spotted by The Next Web, states in part:
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.
Apple also articulates that the DOJ proposal as it pertains to retailers like Amazon being able to include links to e-books from within iOS apps is far beyond the scope of the issues in the case.
Apple is under no duty to allow other retailers to offer apps on the iPad in the first place, much less on terms that subsidize their operations," the argument says. "Nevertheless, Apple allows all e-book retailer apps that are compliant with its policies-including those offered by Amazon, Barnes & Noble and other competing e-book retailers-to be offered in its App Store. It also permits consumers to download e-books purchased through another e-book retailer's website or bookstore onto its e-reader devices without charge.
Apple concludes by stating that it does not believe it has run afoul of antitrust law, and that the conduct the court found objectionable has since ended and will not happen again. Consequently, Apple writes that no further injunction is necessary, and that should one be issued, it should be "narrowly tailored to redress the specific conduct this Court found anticompetitive."
Say what you will about Apple's actions leading up to the case, but it's hard to read the DOJ's proposal as anything other than absurdly far reaching.
The full ruling can be read below.