Department of Justice Seeks Punishments, Government Oversight Of Apple’s iTunes And App Store

| by Asia Smith
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After winning an antitrust lawsuit against Apple last month, the Department of Justice proposed on Friday that they would seek steep punishments from the technology giant that would, among other things, provide federal oversight to regulate the company’s content sales.

In July, a federal judge found Apple guilty of illegally conspiring with five major publishers to raise e-book retail prices. U.S. District Judge Denise Cole said on July 10 that the company had played a “central role” in the conspiracy. DOJ officials suggested on Friday that Apple should be forced to terminate its contracts with the five book publishers, barred from future contracts that may control e-book retail prices, and required to allow Apple iPhone and iPad users to purchase e-books directly from other retailers such as Amazon and Barnes & Noble.

The DOJ proposal would further require Apple to utilize a court-appointed monitor (paid for by Apple) that would enforce new regulations and ensure that Apple continues to abide by the regulations for a minimum of 10 years.

“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,” said Bill Baer, assistant attorney general in charge of the DOJ antitrust division. “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.”

Additionally, the DOJ has requested that a federal judge require government oversight of iTunes and the App store as a means of protecting competition in media markets beyond the book publishing industry.

Apple expressed vehement resistance to the DOJ’s suggestions, stating in a court filing submitted on Friday that the proposals are “a draconian and punitive intrusion into Apple’s business, wildly out of proportion to any adjudicated wrongdoing or potential harm.” The filing further argued that “these overbroad and vague terms violate principles of equality and antitrust law, as well as Apple’s constitutional rights to fair notice of judicial penalties.” The five publishers involved in the original suit settled the allegations with the DOJ in court, but Apple riskily chose to seek trial and may now be forced to pay the consequences.

Sources: RT, Washington Post, NPR