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Publishers slam DOJ penalty in Apple eBook price fixing case

A number of publishing houses are speaking out against the Department of Justice's recent decision to ban Apple from brokering pricing deals for eBooks and other content as punishment for an eBook price-fixing scheme, calling the penalties imposed too light.

The DOJ issued its recommendation recently, but several weeks after a New York district judge found that the Cupertino-based firm was guilty of fixing the prices of its electronic books, forcing customers to pay substantially higher prices than those being charged by competitors.

Now some heavyweight publishers have joined together to file a legal brief opposing the agency's proposal, which would end Apple's agreements with five major publishers: Hachette Book Group, HarperCollins, Macmillan, Penguin, and Simon & Shuster.

"The provisions do not impose any limitation on Apple's pricing behavior at all," the group said in the filing. "Rather, under the guise of punishing Apple, they effectively punish the Settling Defendants by prohibiting agreements with Apple using any agency model."

According to the DOJ's recommendation, Apple would also have to allow rivals like Amazon and Barnes & Noble to link their eBook stores within their iOS apps, and appoint a monitor who would make sure Apple is not engaging in behaviour that runs afoul of US antitrust laws.

Apple vowed to appeal the decision, so it remains to be seen if the DOJ's suggestions will be enacted. In response to last week's news, Apple called the agency's proposal "a draconian and punitive intrusion into Apple's business, wildly out of proportion to any adjudicated wrongdoing or potential harm."

The publishing group, however, argued that the DOJ's plan contradicts already negotiated settlements, which allowed them, under certain confines, to enter into agency deals with retailers.

There's no need to worry, though, according to the agency. A spokeswoman said that: "The proposed settlement with Apple, if approved by the court, would prohibit Apple from entering agreements that limit retail price competition during a reset period." It will not, however, "modify the terms of the settlements we reached with the publisher defendants."

Apple did not immediately respond to a request for comment.

This case dates back to April 2012, when the DOJ sued Apple and five publishers over an alleged "illegal conspiracy" involving eBook price fixing. The publishers settled with the government, but Apple fought back and the case went to trial in June.