DOJ

29 'DOJ' stories March 2012 - June 2012

T-Mobile signs AWS spectrum agreement with Verizon

Jordan Kahn Jun 25 2012 - 8:23 am PT

T-Mobile just announced plans to exchange and purchase spectrum from Verizon Wireless in a deal the carrier claimed would improve its “spectrum position in 15 of the top 25 markets” that covers 60 million people. T-Mobile said the spectrum would help enhance its 4G network and advance the rollout of its LTE service. The agreement includes spectrum that Verizon planned to acquire from several cable companies, so T-Mobile will first have to wait for the Federal Communications Commission and U.S. Department of Justice to approve the deal:

“This agreement will provide T-Mobile with critical AWS spectrum, enhancing both network capacity and performance and allowing us to meet the growing consumer demand for 4G mobile broadband,” T-Mobile CEO and President Philipp Humm said. “This is good for T-Mobile and good for consumers because it will enable T-Mobile to compete even more vigorously with other wireless carriers. We anticipate FCC approval later this summer, in time for us to incorporate this new spectrum into our network modernization and the rollout of LTE services next year.”

We recently updated you on the rollout of T-Mobile’s $4 billion 4G-network plan, including its plan to rollout 4G HSPA+ in the 1900 MHz spectrum to iPhone users “in a large number of markets later this year.” T-Mobile mentioned a few of the cities that would benefit if the agreement goes through:

T-Mobile will gain spectrum covering 60 million people — notably in Philadelphia; Washington, D.C.; Detroit; Minneapolis; Seattle; Cleveland; Columbus, Ohio; Milwaukee; Charlotte, N.C.; Raleigh-Durham, N.C.; Greensboro, N.C.; Memphis, Tenn.; and Rochester, N.Y

Cue on agency model: ‘I don’t think you understand. We can’t treat newspapers or magazines any differently than we treat FarmVille.”

Jordan Kahn Apr 23 2012 - 6:59 am PT

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By now you probably know that the U.S. Department of Justice launched an antitrust lawsuit against Apple and two publishers this month following an investigation into Apple’s eBook pricing agency model. Three publishers, including Hachette, HarperCollins, and Simon & Schuster, decided to reach a settlement with the Department of Justice to return to Amazon’s set-your-own price wholesale model. Meanwhile, Apple, Macmillan, and Penguin will take the fight to court.

Interestingly, a report from The Wall Street Journal, which is owned by the HarperCollins’ parent company News Corp, suggested Apple was only ever trying to continue its App Store business model. The Wall Street Journal’s L. Gordon Crovitz described visiting Senior Apple Executive Eddy Cue to discuss changing Apple’s policies for publications. He quoted Cue as comparing book pricing to apps and not wanting to treat publications differently than app developers:

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Analysts: Apple has a strong case in DOJ’s lawsuit over eBook price-fixing

Jake Smith Apr 12 2012 - 8:14 am PT

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Yesterday, the U.S. Department of Justice filed a lawsuit against Apple and five other publishers over eBook price-fixing. The Department of Justice reached a settlement with three of the publishers in the suit, but Apple, MacMillan, and Penguin are standing strong (the U.S. is also after Simon and Shuster). Yesterday, MacMillan’s CEO released a letter on the matter and explained why the publisher chose not to settle. In the note, he said the Department of Justice’s settlement demands “could have allowed Amazon to recover the monopoly position it had built before our switch to the agency model.” He also said it is “hard to settle a lawsuit when you know you have done no wrong” and called the agency model the future of an “open and competitive market.”

As CNET noted, the Department of Justice may have a more difficult case against Apple. For one, Apple does not have a strong-hold in the eBook market, because Amazon has the commanding lead with its Kindle sales. The Department of Justice has a case against the publishers rather—and that is most likely why three of them have already chosen to settle. Apple only holds open the store, while publishers are the ones who choose the prices to set.

The settlement reached with three of the publishers yesterday is said to give them “freedom to reduce the prices of their e-book titles,” which allows Amazon to go back to its previous wholesale model.

A key point that the Department of Justice is using in its lawsuit is when all five of the publishers met together at a hotel in London to talk over eBook prices. Apple was not present at the meeting, so this may give the Department of Justice a harder time to press the Cupertino-based Company. Of course, the Department of Justice could still come out victorious, but it may have to dig a little deeper against Apple than it did with publishers. We are sure there will be more out of this case as time goes on.

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US government sues Apple in eBook price-fixing antitrust suit

Jordan Kahn Apr 11 2012 - 7:00 am PT

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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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Apple explains stance on e-book price fixing and the ‘Kindle threat’ in court documents

Jordan Kahn Mar 9 2012 - 9:38 am PT

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Yesterday, reports from The Wall Street Journal claimed the United States Justice Department was planning to launch an antitrust case against Apple and the country’s five largest book publishers related to claims of e-book price fixing. The European Commission announced in December that it would begin investigating whether Apple and book publishers “engaged in illegal agreements or practices that would have the object or the effect of restricting competition.” Many believe the probes are a direct result of Steve Jobs’ comments documented in Walter Isaacson’s Steve Jobs biography where the late CEO said: “Amazon screwed it up.”

“We told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30 percent, 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.’ “

Today, new court documents from a request by Apple to throw out a class action case over e-book price fixing revealed Apple’s stance on the issue. PaidContent explained: “Apple argues that its business plan was to sell as many e-books as possible and that it had no incentive to raise prices.” Meanwhile, Apple argued: “Why would Apple offer Amazon’s Kindle app on the iPad.” The company’s comments sidestepped all claims about Apple allegedly conspiring to slow Amazon’s entrance into the tablet market with Kindle Fire:

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