John Paczkowski

Recent Posts by John Paczkowski

The Incredible Shrinking Apple E-Book Remedy

If Apple was hoping for leniency from the judge ruling on potential remedies in its e-book price-fixing case, it’s looking increasingly likely that it may get some.

During a hearing in a New York federal court on Tuesday, Judge Denise Cote narrowed the scope of the penalties the Department of Justice wants leveled upon Apple, saying she doesn’t want them to intrude too much into the company’s business operations.

“I want this injunction to rest as lightly as possible on how Apple runs its business,” Cote said. “I want Apple to have the flexibility to innovate.”

To that end, Cote said she does not support broad government oversight of all of Apple’s content distribution deals beyond e-books, nor does she feel that imposing new requirements that would force Apple to allow rival e-book retailers like Amazon to link to their own e-bookstores from iOS apps is wise.

“I don’t want to do more than is necessary here. The App Store was only an incidental part of this trial,” Cote said, adding that the benefits of such a sanction aren’t worth the “disturbance” they would cause to Apple’s management of the App Store.

But on another sanction, an external monitor charged with evaluating Apple’s internal antitrust policies, Cote took a harder line, saying she’s skeptical of the company’s commitment to changing its behavior.

“Apple has been given several opportunities to demonstrate to this Court that it has taken the lessons of this litigation seriously,” Cote said. “I am disappointed to say that it has not taken advantage of those opportunities. I invited and expected a detailed and persuasive presentation of the steps Apple was committed to take to ensure that the government need never again expend its resources to bring Apple into court for violations of the country’s antitrust laws. Apple’s August 19 letter to the government is its most detailed response in this regard and it is inadequate. I have been reluctant to appoint a monitor for several reasons. But I believe based on the record before me now that I should. I believe that a monitor with a carefully defined role can help ensure that competition is restored and preserved.”

Caveat: The monitor would have a far more limited mandate than the one proposed by the government. It would simply oversee Apple’s internal antitrust compliance policies and employee training on them, and only on a limited basis. Hardly the sort of empowered, roving monitor the DOJ requested.

So it looks like Apple may have won itself a fair bit relief from the proposed sanctions it has described as “wildly out of proportion to the issues and evidence in the case.” Clearly, it hasn’t completely sold Cote on the more “modest” injunction it proposed earlier this month, but it’s certainly given her cause to dial the DOJ’s proposed remedies way back. Which raises the question: given the diminishing penalties in the case, what did government go to trial for?

Apple and the Justice Department are to submit revised proposed penalties to Cote today. She hopes to issue a ruling on them next week.

Apple still intends to appeal.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik