July 23, 2012, 12:35 PM — A proposed settlement of the U.S. Department of Justice's e-book price-fixing case against three large publishers would damage the U.S. publishing industry and would single out Apple for restrictions on e-book pricing, lawyers for the tech firm wrote in comments to the agency.
The proposed settlement -- between the DOJ and three of five publishers the agency charged in April with price fixing -- is "a threat to ebook competition," lawyers for Apple wrote in comments to the DOJ. "In a misguided attempt to reshape the market according to its own preferences, the government seeks to impose a business model that will result in dramatic and long-lasting harm."
Apple, also a defendant in the case, has declined to settle the case and is scheduled for trial in June 2013. Apple, Barnes and Noble and the American Booksellers Association were among the organizations filing comments opposed to the proposed settlement between the DOJ and publishers Hachette Book Group, HarperCollins Publishers and Simon and Schuster.
The settlement, if approved in court, would require the publishers to allow retailers to set their own prices for e-books. The settlements would also prohibit the publishers from discussing pricing with competitors for five years and prohibit them from constraining retailer efforts to offer discounts for two years.
About 800 of the 868 comments the DOJ received were opposed to the settlement, the agency said. Many people and groups opposed to the settlement said it would allow Amazon.com to lower prices and create an e-book-selling monopoly.
"The role of Amazon as protagonist in all of this is troubling," Apple's lawyers wrote. "Amazon is by any measure or standard the industry monopolist, a dominant presence in the ebook and physical book marketplace. It routinely uses its leverage across both markets to impose its will on authors and publishers. That is undeniable."
Before a new e-book selling model involving Apple and book publishers, independent book sellers were getting underpriced by Amazon.com, added lawyers from the American Booksellers Association. Before the new pricing model, "indie bookstores were concerned that Amazon had a 90 percent share of the growing e-book market, and that this one retailer was selling e-books at a price far lower than indie stores could even purchase these e-books for resale," the association's lawyers wrote.