NEW YORK In July, the U.S. Justice Department won its antitrust lawsuit accusing Apple of conspiring with publishers to raise the prices of e-books. Now, the government wants to use its victory to discipline Apple in other markets where it does business, such as movies, music and television shows.
The Justice Department on Friday proposed guidelines to U.S. District Court in Manhattan on how to enforce the July ruling. The guidelines suggest Apple should be forced to terminate its existing agreements with five major publishers and avoid entering into similar future agreements with providers of music, games, movies and TV shows.
The guidelines would put rules in place to prevent Apple from aiding price-fixing among publishers, or retaliating against publishers that refuse to bend to its terms. The Justice Department also suggested that Apple allow Amazon and Barnes & Noble to insert links to their e-bookstores in e-book apps, so consumers can easily compare prices.
"The court found that Apple's illegal conduct deprived consumers of the benefits of e-book price competition and forced them to pay substantially higher prices," William Baer, assistant attorney general for the Justice Department's antitrust division, said in a statement. "Under the department's proposed order, Apple's illegal conduct will cease and Apple and its senior executives will be prevented from conspiring to thwart competition in the future."
In a statement filed by legal counsel Gibson, Dunn & Crutcher, Apple said the government's proposal was a "draconian and punitive intrusion" into its business.
The "overreaching proposal would establish a vague new compliance regime applicable only to Apple with intrusive oversight lasting for 10 years, going far beyond the legal issues in this case, injuring competition and consumers, and violating basic principles of fairness and due process," Apple's lawyer, Orin Snyder, said in the statement. The cost "not only in dollars but also lost opportunities for American businesses and consumers would be vast."
The Justice Department declined to comment.