DOJ Says Publishers Are Again Colluding in Objecting to Proposed Apple Penalty in E-Book Case

With Apple and the U.S. Department of Justice headed back to court today for a hearing on the government's proposed penalties for Apple, GigaOM highlights several developments in the case. Of particular interest is a letter from DOJ attorney Lawrence Buterman arguing that an objection to the proposed penalties by the publishers that were part of the case is direct evidence of why the penalties are needed to protect consumers.

“A necessary component of this Court’s decision finding Apple liable for horizontal price-fixing is that the publishers themselves were engaged in a horizontal price-fixing conspiracy…[There] is reason to believe the Publisher Defendants may be positioning themselves to pick things back up where they left off as soon as their two-year clocks run. Indeed, the very fact that the Publisher Defendants have banded together once again, this time to jointly oppose two provisions in the Proposed Final Judgment that they believe could result in lower ebook prices for consumers, only highlights why it is necessary to ensure that Apple (and hopefully other retailers) can discount ebooks and compete on retail price for as long as possible.”

Apple has called the proposed penalties, which would force the company to allow competitors to bring back direct links to their e-book stores in their App Store apps and nullify existing "agency model" contracts with publishers, "draconian" and "punitive". Apple could also end up being liable for as much as $500 million in damages.

At today's hearing, Apple will also argue for a stay on further court proceedings until its appeal can be heard, proposing that a jury trial be held in October 2014. The DOJ is arguing against a stay and suggesting that an appeal trial should be held beginning in April 2014.

Update: Associated Press reports that Judge Denise Cote has denied Apple's request for a stay of the case pending appeal.

A judge on Friday refused a request by Apple to temporarily suspend her ruling that it violated antitrust laws by conspiring with publishers to raise electronic book prices in 2010.

Judge Denise Cote, ruling from the bench in Manhattan federal court, declined to withdraw the effect of last month's ruling while Cupertino, Calif.-based Apple Inc. appeals.

The maker of iPods, iPads and iPhones continues to fight what it calls "false accusations."