Justice Department seeks lighter e-book penalties but scolds Apple

Los Angeles TimesAugust 24, 2013 

Even as federal antitrust lawyers proposed a slight reduction in their proposed penalties in the Apple Inc. e-book case, they stepped up their criticism of the company for continuing to insist that it did nothing wrong.

In a filing made Friday, the U.S. Justice Department agreed to shorten the length of its proposed injunction on Apple from 10 years to five.

But the Justice Department said it is still requesting that a judge impose the same range of penalties, which include appointing a third-party antitrust monitor, restrictions on deals that Apple can strike with publishers and new requirements to let competitors link to their own e-book stores from their apps.

Most interesting, however, is the tone of exasperation contained in the latest filing. The Justice Department and Apple apparently had some discussions about terms of a compromise set of penalties at the behest of the judge. But in those talks, the Justice Department says, Apple continued to push for minor penalties as it insisted it was not at fault.

"In response to the Court's instruction that the parties meet and confer in an attempt to arrive at a mutually-acceptable injunction, Apple proposed to plaintiffs a series of terms that impose virtually no limitations on the company's conduct beyond those already in place through the Publisher Defendants' settlements," the Justice Department filing says. "In fact, in several respects, Apple's post-trial proposed

injunction is less restrictive than the injunctions agreed to by the Publisher Defendants as part of their pre-trial settlements.

Last year, the Justice Department accused Apple and five major publishers of conspiring to fix e-book prices after the Cupertino, Calif., company entered the market with the launch of the iPad in 2010.

All five publishers settled, but Apple chose to fight on, claiming in filings and in court that its deals were legal.

This summer a federal judge disagreed with Apple and handed down a sweeping ruling in favor of the Justice Department. The judge is now considering what penalties to impose.

In the Friday filing, the Justice Department says Apple simply can't be trusted, given its reluctance to acknowledge the outcome of the case.

"They resist proposed changes intended to strengthen their internal compliance processes, refuse to undertake basic efforts aimed at restoring price competition in the marketplace, and even decline to commit to not repeating their anti-competitive practices in other content markets," the Justice Department filing says. "Quite simply, Apple wants to continue business as usual, regardless of the antitrust laws.

"Under these circumstances, this Court should have no confidence that Apple on its own effectively can ensure that its illegal conduct will not be repeated. There must be significant oversight by someone not entrenched in Apple's culture of insensitivity to basic tenets of antitrust law."

Apple had not yet filed its response.

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