Apple 2.0

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DOJ to Apple: You're wrong, wrong, wrong on e-books

July 23, 2012: 4:52 PM ET

With public comments running 10 to 1 against it, the antitrust division refuses to budge

Antitrust staffers at last year's division awards ceremony

FORTUNE -- My bias may be showing, but when I read the document filed Monday by the Justice Department in response to sharp criticism from Apple (AAPL) and others of its e-book antitrust suit (see Apple to DOJ: Bite me), I found the rhetoric surprisingly overheated and, for the government agency charged with enforcing the nation's antitrust laws ... well ... snippy.

  • It dismisses most of the 868 public comments on its proposed final judgement (798 of which opposed it) as self-serving, then singles out for quotation individual letters cherry picked from among the 70 that were supportive.
  • It sidesteps the central criticism -- that the government sided with monopoly (Amazon), rather than competition, in bringing an antitrust case against Apple and five publishers last April. It simply states as a fact that it looked into complaints of Amazon's (AMZN) widely-feared "predatory practices" and found "persuasive evidence" lacking.
  • It uses highly charged language -- "seismic shift," "hobbling retailers," "unfettered competition"  -- yet insists that Apple's arguments be "stripped of [their] rhetoric" before it declares the company wrong, wrong, wrong on every point -- as near as I can tell -- of antitrust law.
  • It points to Google's (GOOG) and Microsoft's (MSFT) new tablets as evidence that the e-book market has thrived since the antitrust suit was filed, as if either company were getting into the market a) in response to the suit or b) primarily to sell e-books.
  • Its opening salvo ...

    Click to enlarge. Source: B&N via DOJ

    "When Apple launched its iBookstore in April of 2010, virtually overnight the retail prices of many bestselling and newly released e-books published in this country jumped 30 to 50 percent—affecting millions of consumers."

    ... is contradicted by the chart above, which it offers as evidence of the anticompetitive effect of Apple's "collusive agreement" with the publishers.

As I say, I may be biased, and I'm certainly not qualified to pass judgment on the finer points of Tunney and Sherman Act law that the DOJ raises.

Moreover, to be fair, I'd be a tad defensive too if public comments were running at better than 10 to 1 against me and I'd been just excoriated on the Wall Street Journal's Op-Ed page in the middle of an election year by one of the President's most powerful allies in the Senate. (See Pressure mounts on the Justice Dept. to drop its Apple e-books suit.)

But you can judge for yourself. PaidContent has provided the a pdf of the DOJ's response -- with key passages helpfully underscored -- here.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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