DoJ proposes Apple punishment…and it’s a doozy

DoJ proposes Apple punishment…and it’s a doozy

It’s not approved yet, and Apple will appeal…but the Department of Justice (DoJ) is definitely looking to have Apple punished for their behavior in the e-book pricing conspiracy…and it goes way beyond just addressing specific consumer losses.


DoJ press release

gives you the highlights…and some of them will certainly affect some of my readers.

One interesting one: Apple would be prohibited from stopping Amazon (and others) from having links to buy books in their apps (for two years).  That’s a biggie: right now, if you are using Amazon’s Kindle for iPad app, you can’t buy books directly from it…you have to leave it and use a browser. There was a lot of talk about that when that prohibition was put into the Apple Appstore (I wrote about it in Bye-bye, Buy: Apple changes app policy? more than two years ago).

The proposed rules would also go beyond e-books, affecting music and movies in specific ways.

Here are some of the proposals:

  • Apple would have to terminate its contracts with the five publisher co-defendants (who all settled before it was in court). Terminating contracts can cost you big money, since negotiations begin again…and who doesn’t think Apple would be more constrained in negotiating this time?
  • For five years, Apple can’t enter into e-book distribution contracts which would “constrain it from competing on price”…I would think this means no “most favored nation” contracts (“you can’t sell it for less somewhere else), and possibly no Agency Model
  • Apple can’t serve as a conduit of information between publishers. That means they can’t say, “We have three on board with our deal already”, for example. Again, that hurts negotiations
  • Apple can’t retaliate against publishers that don’t adopt an Agency Model (maybe they are okay…I need to read the actual proposal, and we need to see what the court approves)
  • I’m going to quote this one: “Apple will also be prohibited from entering into agreements with suppliers of e-books, music, movies, television shows or other content that are likely to increase the prices at which Apple’s competitor retailers may sell that content.” I doubt Apple expected videos to get pulled into this court case
  • A full-time external compliance monitor would be hired…and Apple would have to pay all of the salary and expenses? I assume somebody like that makes six figures. I was also amused by this part of it: “The antitrust compliance officer will be responsible for training Apple’s senior executives and other employees about the antitrust laws and ensuring that Apple abides by the relief ordered by the court.” Like they didn’t already know the rules…I couldn’t help but be reminded of being sentenced to Traffic School 😉

Again, this is not final, and Apple will almost certainly fight it.

It feels a little to me like the DoJ is trying to seize on a rare legal victory over Apple…like putting Al Capone in Alcatraz for tax evasion. 😉

We’ll keep an eye on it (this one might even affect Apple stock), but feel free to tell me and my readers what you think by commenting on this post.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

6 Responses to “DoJ proposes Apple punishment…and it’s a doozy”

  1. Karen Says:

    Great story and it will be good to follow it.

    Can I also ask you what case you use for your Kindle Fire 8.9. I need to replace the Case Crown n my son’s and can’t figure out which n to get. People complain about all of them!

    Thank you


    • Bufo Calvin Says:

      Thanks for writing, Karen!

      I believe the one I’m using is this one

      CaseCrown Bold Standby Case (Purple) for Amazon Kindle Fire HD 8.9 Inch (Built-in magnet for sleep / wake feature)

      although it looks like the ASIN (Amazon Standard Identification Number) may have changed since I got it.

      I would describe myself as “satisfied” with it…not blow away, but it does the job. Right now, it’s only $7.99, and that’s definitely a plus. 😉 I like the auto-wake and sleep feature, and it does stand up when in a “reading easel” configuration.

      For negatives, the fit is a little loose, so the Fire can slide around in it a bit…that can problematic with a touchscreen. Some apps insist on being in one orientation…which is upside down, depending on how you hold it. A weird thing is that you can’t have it plugged in and in a horizontal easel at the same time (where you plug it in would be on the bottom, the part touching the table, so when you are watching video (streaming or otherwise), you have to be aware of the battery charge use. There is no pocket, but I can keep a few business cards on the bottom side of the Fire.

      It has been reasonably rugged.

      For me, it’s worth the price…

  2. Karen Says:

    Thanks Bufo. I have that case in black and I bought one for my adult son also when I bought him the HD Fire. He has been having problems with the Fire getting really hot and we are trying to figure out if the case could be a problem. He claims he shuts it at night but can still listen to Tune In Radio and I don’t think that should work. The Fire gets really hot and shuts down. Amazon took the info and told me they would call back in 3days. I have owned kindles since the first one and this is the worst service I have received from them.

    Thanks for your help. I love this blog.

    Karen in Seattle .

    • Bufo Calvin Says:

      Thanks for writing, Karen!

      I’m surprised they are making you wait three days! A device which gets hot could explode (I’ve heard of that happening with tablets). I don’t mean explode like a bomb, necessarily, but I would think they would give you a response right away.

  3. Karen Says:

    He was supposed to call me back in 3 hours after I had a chance to call my son and ask more questions about it. He did not do that but sent me an email this morning saying he would call in 3 business days after he talked to a tech person. Then he asked me if he had solved my issue. Really? I will call someone else on Monday. Thanks for your advice.


  4. Round up #194: Detroit libraries, Kindle Fire updates now available from Amazon | I Love My Kindle Says:

    […] other sources. I’ve written before about how far-reaching the DoJ proposal seems to be. The five Agency Model publishers think […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: