Honza Dvorsky On April 11 this year, the US Department of Justice (DOJ) filed a lawsuit against Apple and five book publishers for alleged e-book price gouging and illegal collusion. Immediately after the lawsuit was published, three of the five publishers settled out of court with the DOJ. However, Macmillan and Penguin rejected the accusations and, together with Apple, want to take the case to court, where they will try to prove their innocence.
Action
We have informed you about the details of the lawsuit in the previous article. In practice, this is an attempt by the DOJ to prove that Apple and the five aforementioned publishers worked together to set higher e-book prices globally. Most of the representatives of the mentioned publishers reject these accusations and, for example, the managing director of the Macmillan publishing house, John Sargant, adds: “The DOJ has alleged that collusion by the CEOs of Macmillan Publishing and others was to cause all firms to switch to an agency model. I'm the CEO of Macmillan and I've decided to move the way we sell to an agency model. After days of thought and uncertainty, I made this decision on January 22, 2010 at 4 am on my exercise bike in the basement. It's one of the loneliest decisions I've ever made.”
Apple defends itself
Although the lawsuit mentions an attempt to monopolize the market and set fixed prices by the defendants, Apple defends itself by saying that by putting the ability to determine the price of the product back into the hands of the authors, the market has started to flourish. Until then, only Amazon set the price of e-books. Since the emergence of the agency model in e-books, prices have been determined by authors and publishers. Apple adds that overall interest in e-books has increased, which helps all market participants and encourages healthy competition. The claim that there is nothing illegal about the agency model is also supported by its functioning in the legal sale of music, films, series and applications for several (in the case of music, over 10) years, and this is the first lawsuit in all that time. Therefore, Apple also mentions that if the court loses and the agency model is considered illegal, it would send a bad message to the entire industry. To this day, it is the only widespread method of legal sale of digital content over the Internet.
Special charges
Another part of the lawsuit mentions a secret meeting of the publishers in a London hotel sometime in early 2010 - but it was only a meeting of the publishers. Whether it happened or not, the DOJ itself claims that Apple representatives were not involved. That's why it's strange that this allegation is part of a lawsuit directed at Apple, even though the company had nothing to do with it. The American company's lawyers also contested this fact and are asking the DOJ for an explanation.
Further development of
So the process takes very interesting turns. However, Reuters mentions that even if Apple loses the court, it would have to pay a fine of 'only' 100-200 million dollars, which is not a significant amount considering the company's account, which keeps over 100 billion dollars. However, Apple takes this trial as a fight for principle and they want to defend their business model in court. The next court hearing is on June 22 and we will keep you posted on any further developments in this unprecedented process.
I think that if SJ had lived, they would never have allowed themselves to do this. The weight of his personality was a guarantee that everything was OK. Today I'm going to try how Time can handle it. But this model was set up by SJ and has been working reliably for years.
The fact that 3 out of 5 immediately settled out of court smacks of the fact that the allegations are true. Unfortunately, the truth is often determined only by capable lawyers...
This is how any smaller company that gets pulled over by the DOJ will survive. I don't have the money to prove my truth in court, and if by any chance they lose, it will bankrupt them. Unfortunately, all it takes is for the DOJ to file a claim and most companies run away. It has little to do with guilt.