As first spotted by GigaOm, the US Department of Justice has submitted a revised remedy proposal in the ongoing ebook case that previously found Apple guilty of conspiring with publishers to control ebook pricing. While much of the proposal remains the same as the proposal it first submitted at the beginning of this month, the report points out that the DOJ has added more information and a Steve Jobs email as an exhibit showing that Apple changed its in-app purchasing policies specifically “to retaliate against Amazon for competitive conduct that Apple disapproved of.”

While referencing the email above in which Steve Jobs and Apple marketing chief Phil Schiller discuss forcing Amazon to go through Apple’s payment system, the DOJ claims Apple “misrepresented the factual circumstances” since it allows other retailers to bypass its 30% cut:

As Apple’s counsel told the Court, “[o]ur view is that if there is a hyperlink, to a particular book, we get from a defendant publisher, we get 30 percent. The same way if there is a hyperlink to buy shoes, we get 30 percent across the board.” (Tr. at 62). These statements are incorrect. Apple misrepresented the factual circumstances surrounding this matter, including how the App Store operated and operates. It simply is not true that Apple receives a 30 percent commission from all retailers for all goods sold through apps. To use Apple’s counsel’s own examples, one can buy shoes today on an iPad using a Zappos app…similarly, one can buy countless goods on an iPad, including physical books, directly from an app…. In both of those situations, the purchases do not go through Apple’s payment system, and Apple does not receive a 30 percent commission on these physical goods

If you haven’t been following along with the DOJ’s ebook case, here’s a quick update:

Apple is the last defendant in the case, as the five publishers initially involved– Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck, Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc–had settled with the courts previously. The publishers agreed to terminate agreements with Apple that would limit ebook price competition and “allow for retail price competition in renegotiated e-book distribution agreements.” After finding Apple guilty, the DOJ published a remedy proposal that would see Apple terminate agreements with publishers involved and refrain from entering contracts that would prevent competition, in addition to allowing retailers to link directly to their ebook stores from within their mobile apps on iOS devices.

Apple responded to the remedy proposal calling it “draconian and punitive,” and a hearing this month following the proposal resulted in the judge denying Apple’s request to temporarily suspend the guilty ruling until an appeal. A trial regarding damages in the case is currently scheduled for May.

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

3 Responses to “Using Steve Jobs email as evidence, DOJ says Apple changed in-app purchase policy to retaliate against Amazon”

  1. Mark Granger says:

    The bit where Steve refers to the iFlow reader as “roadkill” was interesting as well. All of the exchanges between Phil Schiller and Steve Jobs offered real insight into how the company was managed.

    Subject: Re: How Apple Killed the iFlow Reader
    From: Steve Jobs
    Received(Date): Tue, 15 Feb 2011 17:13:29 -0800
    Cc: Eddy Cue , Ron Okamoto , Bruce Sewell
    To: Philip Schiller

    IS their app any good? Lots better than iBooks? Or is this guy just pissed?
    Bottom line – didn’t have a policy and now we do, and there will be some roadkill because of it. I don’t feel guilty. They want to use our payment system, which we have invested a TON of money into creating and maintaining, for free and that’s not going to be possible going forward.



  2. LOL so are they saying Apple as a company should not try to hurt their competitor?

    looks like Amazon’s lobbying money is working it’s magic.


  3. Evan Moore says:

    Here’s the commercial Phillip mentioned in his email