Facing charges that it has conspired with publishers to fix the pricing of electronic books, Apple has resorted to a little seen legal tactic much favored by Al Pacino in 1979’s And Justice For All known as “This whole trial is out of order.” Rejecting the accusations in its latest filing, the company went so far as to describe the entire antitrust lawsuit as “fundamentally flawed.” Them’s just may be fighting words, I believe.
The company stands accused of illegally working with five publishers in early 2010 to artificially inflate e-book prices upwards just as it was launching its iPad product and iBooks app. The initial complaint from the US Justice Department notes that Apple’s digital publishing prices were higher than competitor Amazon’s long-standing price of $9.99 per book, as well as including a quote attributed to the company’s late co-founder Steve Jobs in which he speaks about wanting to “create a real mainstream e-books market at $12.99 and $14.99.”
However, Apple’s latest filing in a Manhattan court yesterday pushes back against the Justice Department, claiming that Jobs’ words were not “accurately characterized,” and describing the pricing decisions as “classic procompetitive conduct” in an area where none had previous existed: “The Government sides with monopoly, rather than competition, in bringing this case,” the filing reads, adding that “The Government starts from the false premise that an eBooks ‘market’ was characterized by ‘robust price competition’ prior to Apple’s entry. This ignores a simple and incontrovertible fact: before 2010, there was no real competition, there was only Amazon.” It continues, arguing that the company facing what is terms as “hindsight legal attack for a business strategy well-recognized as perfectly proper” suggests that the government is pushing the “wrong message” to the market. As such, the filing explains, “The government’s complaint against Apple is fundamentally flawed as a matter of fact and law.”
Additionally, the entry of Apple into the e-book market “spurred tremendous growth in eBook titles, range and variety of offerings, sales, and improved quality of the eBook reading experience. This is evidence of a dynamic, competitive market.” The message being sent is clear: What Apple did not only wasn’t illegal price-fixing, it was for the good of the industry and the reader, and now the company is being picked on by the authorities for its troubles.
It’s not quite the Chewbacca Defense, but it may as well have been for all the effect it seems to have had on the Justice Department. When contacted for comment by Reuters, a spokesperson simply referred the news agency back to the original complaint against Apple, suggesting that nothing has changed.
Apple is currently joined by two of the five named publishers – Macmillan and the Penguin Group – in fighting the case while, perhaps somewhat damagingly to Apple’s case, the remaining three publishers – HarperCollins, Simon & Schuster and Hachette Book Group – have already settled out of court.
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