Publishers and Apple fighting the US’ Department of Justice over agency pricing have hit back, with new filings submitted to the Southern District of New York on Wednesday afternoon (15th August) calling on the trial judge to deny the government’s efforts to ratify the settlement agreements, or defer ruling on them until after trial.
Though it is not clear how much these latest briefs will sway Judge Denise Cote’s decision-making, the submissions do add new colour to the proceedings, with Penguin’s response beginning: “The Emperor has no clothes.” Interestingly, though Judge Cote had previously asked the parties to set out their opposition to the settlement agreements during the public comments period, they have done so in these new submissions in response to the government’s request for the court to wave through consent.
Most serious is Apple’s assertion that its agency agreements with the settling publishers— Simon & Schuster, Hachette Book Group USA, and HarperCollins—cannot be terminated without a trial: “The Government is seeking to impose a remedy on Apple before there has been any finding of an antitrust violation.”
But Penguin and Macmillan also argued against “consent” being given, claiming that the new deals were not in the “public interest”. Penguin said the settlement agreements were “far from typical and reach beyond its claims against the Settling Defendants to impose a regulatory scheme on industry participants who have nothing whatsoever to do with the claims in this litigation”. Macmillan argued that the DOJ’s analysis was faulty, suggesting that the “DOJ’s cavalier assumption that its settlement terms will not result in re-monopolization is also mere ‘speculation’”.
Central to their arguments was the view, as put forward by Penguin, that the DOJ was “cherry-picking” e-book pricing data to support its case and ignoring wider market data. Macmillan argued that the government had “Failed to Consider the Negative Consequences of the Proposed Final Judgment” [sic].
Both Penguin and Macmillan maintained that there was no evidence that e-book prices rose during the period that agency existed, as had been the DOJ’s contention. Macmillan said that the government had not provided “a single economic study or analysis showing why its mandated pricing scheme is necessary to undo the effects of the alleged collusion, or why it is in ‘the public interest’.”
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