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Apple DOJ’s eBook Price-fixing Lawsuit “fundamentally flawed”

Earlier this week, Apple responded to the U.S. Deaprtment of justice’s accusations of conspiring to fix eBook prices, by calling the case “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 April, the U.S. DoJ accused Apple and a number of other large U.S. publishers of conspiring to fix eBook prices and filed an antitrust lawsuit. The DoJ alleges that Apple and the other publishers conspired to eliminate competition in the eBook retail market. While three of the five accused eBook publishers already settled the lawsuit with the U.S. DoJ, but Macmillan and Penguin chose to also fight the DoJ along with Apple. All five publishers are accused of meeting in a London hotel to discuss raising the price of eBooks–a meeting that Apple was absent from.

Apple DOJ Ebook Antitrust Lawsuit flawed

In its complaint, the U.S. government said Apple and publishers like Simon & Schuster, HarperCollins, Penguin and Macmillan, favored the 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 said this created a monopoly for Apple. However, Apple firmly disagreed:

The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.

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.”).

Apple also said this sends the wrong message to the market: “For Apple to be subject to hindsight legal attack for a business strategy well-recognized as perfectly proper sends the wrong message to the market.”

In other Apple releated news,

Sotheby to auction Steve Jobs Atari Memo

London’s auction house Sotheby’s on June 15 auctioning two official memos for a price of USD $10,000 to $15,000 – that the late Seve Jobs penned while working at Atari about improving the World Cup Football game, and an operational Apple I motherboard expected to fetch up to $180,000 USD.

This is the earliest know documentation produced by Steve Jobs and predates the founding of Apple computer by almost two years. No other documents from Steve Jobs time at Atari are known to exist. Sotheby’s sold another Steve Jobs document in December, 2011 for $1.6 million.

The pages – stamped and signed by Jobs himself – describe circuit diagrams and paddle layouts. Delightfully, the stamp says “All-One Farm Design” and features a Buddhist mantra, “gate gate paragate parasangate bodhi svahdl.” As you do.

The June 15th, 2012 auction features a 5 page memo sent to Atari employee Steve Bristow by Steve Jobs.

This memo describes changes that could be made to Atari’s World Cup Soccer arcade game. These changes were designed to add play variety to the game and to extend the ‘shelf life’ for arcade operators. While the memo is typed on Atari letterhead, it also features a stamp imprinted with the name of Steve Job’s company at the time “All-One Farm Design” and the address of the Jobs family garage( and the birthplace of Apple Computer). The memo features a circuit diagram and a hand written addendum.

Sotheby‘s description claims less than six Apple I’s in working condition are known to exist:

As the first ready-made personal computer, the Apple I signaled a new age in which computing became accessible to the masses. The interface of circuitry and software that Woz created enabled users to type letters with “a human-typable keyboard instead of a stupid, cryptic front panel with a bunch of lights and switches,” as he explained to the Homebrew Computer Club. Even so, it was sold without a keyboard, monitor, case, or power supply, An exceptionally rare, working example with original Apple cassette interface, operation manuals and a rare BASIC Users’ Manual. It is thought that fewer than 50 Apple I Computers survive, with only 6 known to be in working condition.

In a recent internal video to Apple Store employees, Apple svp of Apple Retail John Browett has promised a three month advance on employee salary raises.

Sotheby Atari Memo by Steve Jobs

Steve Jobs Atari Memo

Sotheby: Steve Jobs Atari Memo

Sotheby: Steve Jobs Atari Memo

Sotheby: Atari World Cup Footbal Game

Sotheby Atari World Cup Footbal Game Machine

Sotheby Apple I Motherboard

Sotheby Apple I Circuit Board

Sotheby Apple I Motherboard

Sotheby Apple I Printed circuit board (PCB)

Apple Store employees were previously scheduled to see their raises on September 30th of this year, now the raise will come on June 30th. These raises come in addition to the Mac and iPad discounts promised by Apple CEO Tim Cook earlier this year.

These employee raises are said to work on a “1-5 scale.” Depending on individual store sales performance during a designated time period, employees will be given raises between 1% and 5% of their current salary.

This three month advance is apparently a one time internal promotion, so the raises for 2013 will likely come during the later part of the year, not June.

iFeng recently does a factory tour with special guest Foxconn CEO Terry Gou.

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