Ars Technica reports that Apple has made a 31-page filing (PDF) regarding the Department of Justice’s antitrust proceedings against it and publishers Macmillan and Penguin, the only two of the “agency five” not to settle. Apple’s filing is about what we might have expected from the corporation—it insists that Amazon was the monopolist, Apple negotiated the agreements with publishers separately and individually, and furthermore that agency pricing has not harmed consumers.

Apple also insists that it didn’t have anything to do with Amazon’s decision to adopt agency pricing: "Apple is not privy to Amazon’s motivations when it adopted the agency model, but enabling entry and introducing new competition, which is all Apple did, cannot be a violation of the antitrust laws."

That Apple is taking this stance is hardly a surprise; it’s already said much the same things in public  statements. And considering how much money it has in the bank, Apple is in a great position to defend itself in court to the bitter end.

I wish the preliminaries would get over with. I want to see what happens when the courtroom maneuvering actually starts.


  1. “Apple insists … that agency pricing has not harmed consumers.”

    So there’s no harm in being systematically ripped off? I’m sure Apple would sing a different itune if it were happening to THEM.

  2. Apparently in AppleWorld “enabling entry and ensuring competition” means “ensuring that new and small players can’t get any product to sell for six months and are prevented from offering promotions.”

  3. There seems to be very little attention being paid to the “most favored nation” clause in Apple’s agreement with publishers. Is this clause tantamount to collusion? I would think that this would be pivotal in this case.

    There is also the implicit assumption that the agency model applies only to the big publishers. As I understand it, this applies to self-publishing authors. So, are they co-conspirators as well?

  4. @Frank Lowney: The DOJ is only suing for *conspiracy* not for Agency pricing. They’ve made that very clear. They aren’t suing Smashwords and the other small publishers using it for the same reason they aren’t suing Random House; they weren’t part of the conspiracy. Mind you, Random House *knew* of it and said nothing publicly, even when they were being pressured via Barnes and Noble. Tells you they liked the idea of raising prices on consumers but were smart enough not to cross the legal line.
    The collusion comes from Apple serving as the hidden communications hub to pass messages between the other five conspirators, as quoted in the filing’s emails: none of the colluding publishers was willing to raise prices alone so Apple rounded up commitments from all the players and let them know the others would be raising prices too. That is *classic* hub and spoke conspiracy.
    As for Apple’s defense statements; what else can they claim?
    They *have* to claim business as usual.
    The alternative?
    “Yes, we’re guilty but without colluding to raise prices we’d have had to *compete* with Amazon and Barnes and Noble and Sony and Kobo and Fictionwise–Fictionwise!–when we’re above such petty things. Heck! We’re the most valuable company of the planet! We’re above your petty laws! Bwah-hah-hah!” 😉
    Not likely, right?
    They already tried to get the case summarily dismissed with those arguments and failed.
    Now they have to put some substance behind their posturing or settle.
    The same way they settled their other federal collusion lawsuit:
    Which they are still fighting on the class-action side:

    Mind you, it does look like, at Apple, collusion *is* a routine business practice.