Last month, the U.S. Department of Justice accused Apple and a number of other large U.S. publishers of conspiring to fix eBook prices and filed an antitrust lawsuit. While most of the publishers quickly settled the lawsuit, Apple decided to fight. Earlier this week, as Ars Technica reports today, Apple responded (PDF) to the government’s accusations. Apple doesn’t mince words in its response. The company’s lawyers call the case against Apple “fundamentally flawed as a matter of fact and law” and say that the idea that Apple tried to reduce competition and fix prices is “absurd.”
In its complaint, the U.S. government said Apple and publishers like Simon & Schuster, HarperCollins, Penguin and Macmillan, who favor the so-called agency model which allows publishers to set their own eBook price, were colluding to fix eBook prices in their fight against Amazon, which favors a wholesale model that gives it the power to set the price of the eBooks it sells. The DoJ alleges that Apple and the other publishers conspired to eliminate competition in the eBook retail market.
Apple, however, argues that the government “sides with monopoly, rather than competition, in bringing this case. The Government starts from the false premise that an eBooks ‘market’ was characterized by ‘robust price competition’ prior to Apple’s entry.” Before the iBookstore, Apple says, “there was no real competition, there was only Amazon.”
Apple says its entry in the market benefited consumers, as it brought is challenging Amazon and provided consumers with choice and “innovative features, such as color pictures, audio and video, the read and listen feature, and fixed display.”
The company also argues that it is giving more power to the publishers and especially to self-publishing and smaller publishing houses.
Throughout the document, Apple accuses the government of selectively quoting Steve Jobs from Walter Isaacson’s biography (“The Government’s selective citation to hearsay from a small portion of Apple’s former CEO’s biography is irrelevant and has no place in this litigation.”).