Apple: Expect a “chilling effect” on digital if we’re found guilty over ebooks

Jun 21, 2013
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Apple: Expect a “chilling effect” on digital if we’re found guilty over ebooks

Apple has prophesied an "chilling effect" on digital media negotiations should it be castigated over iBooks pricing allegations, though the DoJ has dismissed the claims as egotistical. Speaking during closing statements at the New York trial in which Apple is accused of conspiring with publishers to force up the prices of ebooks, Apple lead attorney Orin Snyder argued that the Department of Justice was demanding a "hermetically sealed" negotiating environment that would be detrimental to US business, CNET reports.

Future talks, Snyder claimed, would have to be held in the strictest of secrecy and with no mention or comparison to other deals already in place. That, he complained, would have a "chilling and confounding effect not only on commerce but specifically on content markets throughout this country."

By merely agreeing to what had by then become the established $9.99 price point Amazon was selling ebooks at, Apple would have been conceding to negotiation regulations that would "send shudders through the business community" Snyder concluded. That Amazon and Barnes & Noble decided to acquiesce was because they "made the exact same, intelligent business decision" having "recognized that without all titles on their inferior ereading device ... it would be a disaster, and its 90-percent share would plummet."

However, Department of Justice attorney Mark Ryan refused to accept Snyder's portrayal of events. Apple coerced publishers into giving Amazon an "ultimatum" on accepting the so-called Agency Model of ebook pricing, he argued, having found that "the price that had been set in a competitive marketplace was not the price they liked."

Contrary to Apple's assertions that its actions were in effect those of publishing's saviors, Ryan accused the Cupertino firm of arrogance.

"Because you're a new entrant, you can fix prices?" the attorney asked rhetorically. "Where is that provision cited in the law of our country? ... Apple had a choice. It could enter the market and compete freely ... or stay out of the market."

As for suggestions Apple made that its dealings with publishers were "contentious and hard-fought", and that was evidence that no collusion took place, Ryan was dismissive. "The fact it might be hard to hammer out details of a conspiracy is no defense for a conspiracy" he told the court.

A decision on the case is expected within around two months.


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