Wednesday, May 18, 2016

Using Steve Jobs email as evidence, DOJ says changed in-app purchase policy to retaliate against Amazon

Asfirst spotted by GigaOm, the US Department of Justice hassubmitted a revised remedy proposalin the ongoing ebook case that previously found guilty of conspiring with publishers to control ebook pricing. While much of the proposal remains the same asthe 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 changed its in-app purchasing policies specifically“toretaliate against Amazon for competitive conduct that disapproved of.”While referencing the email above in which Steve Jobs and marketing chief Phil Schiller discuss forcing Amazon to go through ’s payment system, the DOJ claims “misrepresented the factual circumstances” since it allows other retailers to bypass its 30% cut:
As ’s counsel told the Court, “[o]ur view is that if there isa hyperlink, to a particular book, we get from a defendant publisher, we get30 percent.The same way if there is a hyperlink to buy shoes, we get 30 percent across the board.”(Tr. at 62). These statements areincorrect. misrepresented the factual circumstances surrounding this matter,including how the App Store operated and operates.It simply isnot true that receives a 30percent commission from all retailers for all goods sold through apps. To use ’s counsel’s own examples, one can buy shoes today on an iPad using aZappos 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’s payment system, and does not receive a 30 percent commission on these physical goodsIf you haven’t been following along with the DOJ’s ebook case, here’s a quick update: 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 that would limit ebook price competition and “allow for retail price competition in renegotiated e-book distribution agreements.”After finding guilty, the DOJpublished a remedy proposalthat would see terminate agreements with publishers involved and refrain from entering contracts that would prevent competition, in addition to allowing retailers tolink directly to their ebook stores from within their mobile apps on iOS devices.responded to the remedyproposal calling it “draconian and punitive,” and a hring this month following the proposal resulted in the judge denying ’s request to temporarily suspend the guilty ruling until an appl. A trial regarding damages in the caseis currently scheduled for May.

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