Apple says the U.S. Department of Justice’s antitrust suit against it and five U.S. publishers is “fundamentally flawed as a matter of fact and law.” In court documents, Apple argued that the DOJ is siding with Amazon’s ebook monopoly, rather than competition.
The DOJ has accused Apple and the five publishers of conspiring to raise prices for ebooks in 2009 in advance of the launch of Apple’s iBooksstore and iPad in 2010. Three of those publishers have settled with the DOJ (Hachette, Simon & Schuster, and HarperCollins), while Apple, Penguin Group and MacMillan are fighting the charges in court.
The government argues that Apple and the publishers conspired to move the ebook publishing industry to the agency model. In that model, the publishers set the price instead of retailers. The publishers also agree that they will not sell the books cheaper at other retailers.
The publishers used this to renegotiate with Amazon, thus preventing Amazon from dumping ebooks below cost, and ebook prices rose almost overnight. Amazon’s share of the ebook market fell from 90 percent to approximately 60 percent today. Barnes & Noble’s Nook, Apple’s iBooks, and other ebook stores were therefor “competitive” with Amazon, because they were all charging the exact same price.
The DOJ argues this is anti-competitive collusion, but in court documents, Apple has argued that, “Apple’s entry into e-book distribution is classic pro-competitive conduct [that created competition where none existed].”
“For Apple to be subject to hindsight legal attack for a business strategy well-recognized as perfectly proper sends the wrong message to the market,” the company added. “The government’s complaint against Apple is fundamentally flawed as a matter of fact and law.”
Apple’s court filing continued, claiming, “Apple has not ‘conspired’ with anyone, was not aware of any alleged ‘conspiracy’ by others, and never ‘fixed prices.’”
Apple also charged the DOJ with, “[siding] with monopoly, rather than competition.”