Publishers tell court that Apple’s punishment in e-book case is unfair

On Wednesday afternoon, five US publishing companies told the District Court for the Southern District of New York that they objected to a recent proposal made by the Department of Justice (DoJ) to punish Apple for allegedly fixing prices on e-books. Apple was found guilty in July of conspiring to raise e-book prices, although the company says it will appeal the decision.

The five publishers—HarperCollins, Lagardere, Hachette, Simon & Schuster, Penguin Random House, and Macmillan—were all defendants along with Apple in the price-fixing case, but all five agreed to settlement terms, which included collectively paying back $164 million to consumers who were overcharged.

The DoJ's proposal suggested that Apple be prevented from discriminating against rival e-book app makers, like Amazon and Barnes & Noble, by requiring them to pay a 30 percent fee on e-book sales as "in-app purchases." But more important to the e-book publishers, Apple would also be forced to abolish the “agency model,” in which publishers are allowed to set prices for e-books, rather than Apple buying copies of e-books wholesale and selling them off. (For a full description of how the e-book price-fixing worked, see our previous story on the issue, "How Apple led an e-book price conspiracy—in the judge’s words.")

Now, the five publishers say that in forbidding Apple from letting publishers name e-book prices, the prosecutors are double-dipping, essentially punishing the publishers—who say they've settled and paid their debt to society—twice.

"The provisions do not impose any limitation on Apple's pricing behavior at all; rather, under the guise of punishing Apple, they effectively punish the settling defendants by prohibiting agreements with Apple using an agency model," the publishers' objection read.