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Authors group, licensing expert slam DOJ's e-book settlement

updated 06:21 pm EDT, Wed August 29, 2012

Parties cite Amazon investigation, bad DOJ market analysis

US District Court Judge Denise Cote of the United States District Court for the Southern District of New York, presiding over the Apple e-books pricing settlement case, has granted amici curiae, or friends of the court, status to two opposing parties. Writer's advocacy organization The Authors Guild and licensing expert Bob Kohn have been given permission to file an amicus brief with the court, decrying the proposed settlement, and pointing out what they see as flaws in the Department of Justice's arguments.

Both The Authors Guild and Kohn argue that the US Department of Justice has too narrow a definition of the e-book market, and the proposed settlement would damage the existing book market and destroy competition. Kohn argued in his 55-page submission that the Department of Justice's own investigation demonstrated that Amazon engaged in predatory pricing, and has demanded that it turn over all documents relating to the investigation.

The judge had accepted all of a brief that The Authors Guild submitted from August 15, but Kohn's 55-page brief has been refused, with judicial instructions to trim it to five pages, due by September 4. Both Kohn and The Authors Guild have called for a hearing. The Department of Justice opposes the request and is mostly ignoring the filings. A statement by the DOJ discussing some questions about the case says that "railroads, publishers, lawyers, construction engineers, health care providers, and oil companies are just some of the voices that have raised cries against 'ruinous competition' over the decades" and the publishing industry should not be treated any differently.

Kohn is no stranger to digital media. He was the founder of eMusic and is currently chairman of RoyaltyShare, Inc, a provider of revenue and royalty solutions to the record companies, music publishers, and book publishers. Additionally, Kohn served as the Vice Chairman of the Board at Borland Software.

Judge Cote has set the e-book antitrust bench trial, which pits the Department of Justice against Apple and two of the five major book publishers, to June 3, 2013. The date is much later than Apple wanted, but much earlier than the Department of Justice wanted. Apple was hoping to get the trial underway as soon as possible, citing a cloud over the industry and damage to its reputation.

The DOJ had pushed for a much later start date, claiming that Federal investigators needed until March 2013 just to gather evidence, and that Apple was rushing the case. In the interim, the Department of Justice has received 868 public comments on the settlement with the publishers, with nearly all of them opposing the measure.

Only Apple, Macmillan, and Penguin remain in the Department of Justice suit, as the other named defendants (Harper-Collins, Simon & Schuster, and Hachette) have settled. The three remaining parties claim no wrongdoing in the case. Apple considers the suit "fundamentally flawed" and argues that the suit will harm consumers and return the e-book monopoly to Amazon. Apple has pointed out in the past that Amazon has had to cease "predatory pricing" and still has 60 percent of the nascent market, forcing it to complete more fairly than its previous 90 percent marketshare.

Brief of Bob Kohn as Amicus Curiae

by MacNN Staff



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