The Department of Justice surprised Apple attorneys this week by reportedly placing a last-minute request to make the March 22nd hearing on the San Bernardino case an evidentiary hearing. The hearing change will allow for witness cross-examination based on previous court declarations, and each side will be allowed to question their own witnesses.
Update: Bill Gates has told Bloomberg that he was “disappointed” by the ways his views were presented, and he does not back the FBI’s side of this particular case, and that the matter should be decided by the courts.
Apple is locked in a battle with the FBI over whether or not it should create a tool to access data on a locked iPhone 5c used by one of the San Bernardino gunmen, but as some have expected, that’s only one of many cases in which Apple is involved. The Wall Street Journal reports this evening that the Department of Justice is seeking data from at least 12 other iPhones in criminal cases.
Some law enforcement officials are frustrated that Apple and other tech companies appear to be winning the PR battle over data privacy, reports the NYT.
Some Justice and F.B.I. officials have been frustrated that the White House has not moved more quickly or been more outspoken in the public relations fight that the tech companies appear to be winning, the law enforcement officials said, speaking on the condition of anonymity because they were not authorized to discuss the private conversations.
The comments came in the wake of a DOJ drugs and guns investigation where the agency obtained a court order to obtain iMessages between suspects, and Apple responded that it was unable to comply as end-to-end encryption is used, meaning that Apple has no way to decrypt the communications. Tim Cook said of iMessages a year ago that the content is “encrypted and we don’t have the key.”
There has long been tension between Apple and law enforcement agencies over encryption, Apple arguing that its customers right to privacy outweighs the right of law enforcement agencies to intercept communications – a stance strengthened by the Snowden revelations into large-scale electronic surveillance by governments. Law enforcement officials have become increasingly strident and hyperbolic in their statements on the subject.
United States Attorney General Eric Holder said last year that less stringent protection would still “adequately protect personal privacy,” FBI Director James Comey claimed that Apple’s encryption was “putting people beyond the law,” the DOJ suggested that iPhone encryption could eventually lead to the death of a child” and Manhattan district attorney Cyrus Vance, Jr, said that the iPhone would be “the terrorists’ communication device of choice.”
Allegations that Apple is engaging in anti-competitive practices in the run-up to the launch of its rebranded Beats streaming music service are now being investigated by the Department of Justice, according to “multiple sources” cited by The Verge.
The claim is that Apple has been attempting to use its influence to persuade music labels to pull out of deals with free, ad-supported services like Spotify and YouTube in order to reduce competition and increase demand for its own paid service. The European Commission launched an investigation into these same allegations last month …
Following preliminary approval it received in August, Apple has been granted the final court approval it needed in its $450 million ebook settlement, according to a Reuters report.
During a hearing in Manhattan, U.S. District Judge Denise Cote approved what she called an “unusual” accord. It calls for Apple to pay $400 million to as many as 23 million consumers if the company’s appeal of a ruling finding it liable for antitrust violations is unsuccessful.
U.S. District Judge Denise Cote previously expressed concern over the proposed settlement citing a clause in the agreement that she called “most troubling”, but today called the settlement agreement “within the range of those that may be approved as fair and reasonable.”
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Apple and the government have long been engaged in a bitter war of words over encryption and security practices employed in Apple’s iOS devices, but a new Wall Street Journal report indicates that the Department of Justice is really starting to take the rhetoric to the next level.
According to the Journal, a DOJ official actually told Apple executives during a meeting last month that in the future the Cupertino company could eventually be directly responsible for the death of a child.
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The Wall Street Journal reported today that the United States Department of Justice has been using planes equipped with devices that pose as cellular towers (called “dirtboxes”) to collect data from suspected criminals’ cell phones—and capturing data from innocent bystanders in the process.
The devices are capable of capturing data from “tens of thousands” of phones over the course of a single flight. Because most cell phones are designed to automatically connect to the tower with the strongest signal, these dirtboxes can easily fool phones into latching onto its signal.
Apple is facing a new class-action lawsuit from iBooks customers over price-fixing practices according to Reuters. As has been previously argued, Apple conspired with book publishers to hike the prices of ebooks, a violation of U.S. anti-trust law. The Department of Justice won its case against Apple for the same reason last year, and Apple is currently in the middle of appealing that case.
This new lawsuit is a civil case being brought by customers affected by the price-fixing scheme. Today U.S. District Judge Denise Cote ruled that the customers suing could do so as a group despite Apple’s objections. The actual trial will be scheduled for later this year.
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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:
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Photo: appleheadlines.com
Following the Department of Justice’s proposed settlements for the iBooks court case, Apple has submitted a response to the court that clearly shows the company is in no way interested in the suggested changes. The 31 page document is summarized quite well by the initial introduction:
Plaintiffs’ proposed injunction is a draconian and punitive intrusion into Apple’s business, wildly out of proportion to any adjudicated wrongdoing or potential harm. Plaintiffs propose a sweeping and unprecedented injunction as a tool to empower the Government to regulate Apple’s businesses and potentially affect Apple’s business relationships with thousands of partners across several markets. Plaintiffs’ overreaching proposal would establish a vague new compliance regime—applicable only to Apple—with intrusive oversight lasting for ten years, going far beyond the legal issues in this case, injuring competition and consumers, and violating basic principles of fairness and due process. The resulting cost of this relief—not only in dollars but also lost opportunities for American businesses and consumers—would be vast.
Here is the response in its entirety (via TNW):
After reaching settlements with just about every publisher involved in the long-running Apple/Amazon e-book price fixing case, The United States Department of Justice today published its proposal to end the case with Apple after finding the company guilty of conspiring to fix ebook prices during trial earlier this month:
“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 Department of Justice’s 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.”
Among the key points in the proposal:
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(via <a href="http://www.ap.org" target="_blank">AP</a>)
The U.S. Department of Justice has released its case against Apple in the alleged ‘ebooks pricing fix’ case (via CNET) that claims Apple made deals with book publishers to manipulate the price of ebooks.
The Justice Department believes Apple moved to raise ebook prices before Apple launched the iPad and the iBookstore so the company could benefit at the cost of the consumer.
Notably, everyone mentioned in the complaint has settled out of court ahead of this week’s trial, but Tim Cook has remained adamant that Apple is innocent of any wrongdoing.
Apple’s iBookstore has established deals with all of the major book publishers and sells ebooks on its proprietary store for viewing on Apple’s iOS devices including the iPhone, iPad, and iPod touch.
As we noted this morning, Tim Cook echoed this message at last week’s D11 conference:
The e-book case to me is bizarre. We’ve done nothing wrong there, and so we’re taking a very principled position. … We’re not going to sign something that says we did something we didn’t do. … So we’re going to fight.
The Justice Department released all 81 slides outlining its case against Apple, which you can view in its entirety below.
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In the ongoing e-book price fixing case with the Department of Justice, in which Apple is accused of conspiring with publishers to fix eBook pricing and cut out Amazon, Apple has again responded to the DOJ’s claims detailing the “tough negotiations” it went through with publishers. To further prove its point that it was not colluding with publishers to fix e-book pricing, Apple said it “one-on-one” and “contentious negotiations” at a time when publishers were already considering methods of getting Amazon to increase pricing:
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The U.S. Department of Justice announced a settlement in April with three of the publishers involved in the eBook price-fixing antitrust suit against Apple. Hachette, HarperCollins, and Simon & Schuster were part of the settlement, which would allow Amazon to return to its previous wholesale model and the publishers to set and reduce prices for eBook titles freely. PaidContent provided an update today on the case by reporting Apple has filed a document with the Southern District of New York. It called the proposed settlements with the three publishers “fundamentally unfair, unlawful, and unprecedented.” Apple argued that since it is not settling, the settlement would unlawfully end contracts those publishers have with Apple.
The proposed settlement would require the three settling publishers — HarperCollins, Hachette and Simon & Schuster — to terminate their existing agency pricing contracts with Apple. Apple says that isn’t fair: “The Government is seeking to impose a remedy on Apple before there has been any finding of an antitrust violation.” This case, the company states, revolves around “an alleged conspiracy to force Amazon to adopt agency.” So a settlement “enjoining collusion or precluding publishers from forcing agency on Amazon would be appropriate,” but Apple is entitled to defend its contracts in court.
Apple is hoping the courts decide to reject the settlements or delay a ruling until after the June 2013 trial. Apple also discussed Amazon’ role in the case. It claimed the government has “unwittingly placed a thumb on the scales in favor of Amazon”:
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[tweet https://twitter.com/#!/bloombergnews/status/190075312703410178]
Bloomberg is reporting that the United States has filed an antitrust lawsuit in a New York district court against Apple and publishers Hachette SA, HarperCollins, Macmillan, Penguin, and Simon & Schuster over alleged eBook price-fixing. The news follows reports from Reuters yesterday that the U.S. Department of Justice was preparing to launch a lawsuit against Apple and five major publishers accused of colluding to fix and increase the price of eBooks.
According to the report, all the parties named in the suit—except Macmillan, Penguin, and Apple— are willing to settle to avoid legal costs. The Department of Justice could announce “unspecified” settlements as early as today.
At the core of the settlement discussions is the agency model introduced with the iPad in 2010. The deal with publishers was described by Steve Jobs to biographer Walter Isaacson:
“We told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway…. They went to Amazon and said, ‘You’re going to sign an agency contract or we’re not going to give you the books.’ “
The model allows publishers to set their own prices as long as Apple gets a 30 percent cut and a guarantee that the same content is not offered lower elsewhere, but the Department of Justice is trying to return to Amazon’s wholesale model by giving retailers like Amazon control over pricing. Bloomberg explained:
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The U.S. Department of Justice will sue Apple as early as tomorrow morning over allegations of fixing eBook prices with five major publishers, according to Reuters. The five publishers, which are also in question, will be looked at later in the week.
The Justice Department is investigating alleged price-fixing by Apple and five major publishers: CBS Corp’s Simon & Schuster Inc, HarperCollins Publishers Inc, Lagardere SCA’s Hachette Book Group, Pearson and Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH.
A lawsuit against Apple, one of the parties not in negotiations with the Justice Department for a potential settlement, could come as early as Wednesday but no final decision has been made, the people said.
The news of a lawsuit comes just weeks after the Department of Justice launched a probe into Apple and the five publishers. We will keep you updated with any more news about this case.
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