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Angry Apple makes hollow threat to bar Kindle, other e-book apps

Gregg Keizer | Aug. 6, 2013
'Apple is under no duty to allow other retailers to offer apps on the iPad,' company says in reply to DOJ's e-book price-fixing remedies.

The company also argued that the government's dictates about the App Store have no connection to the e-book pricing conspiracy case it lost in July when U.S. District Court Judge Denise Cote ruled that Apple had violated antitrust laws. Apple has already said it will appeal the case.

Most striking, Apple implicitly threatened to pull the apps of e-book retailers from the App Store.

"Apple is under no duty to allow other retailers to offer apps on the iPad in the first place, much less on terms that subsidize their operations," the company's lawyers said in Friday's filing. "Nevertheless, Apple allows all e-book retailer apps that are compliant with its policies -- including those offered by Amazon, Barnes & Noble and other competing e-book retailers -- to be offered in its App Store. It also permits consumers to download e-books purchased through another e-book retailer's website or bookstore onto its e-reader devices without charge."

Any move by Apple to pull apps, however, would be stymied by another provision in the DOJ proposal. "For any E-book App that any Person offered to consumers through Apple's App Store as of July 10, 2013, Apple shall continue to permit such Person to offer that E-book App, or updates to that E-book App," the remedies stated.

Later in the response, Apple called the commission exemption "outrageous," claimed that the App Store "indisputably benefits the nation's economy," and argued that the change would only cement Amazon's dominance of the e-book selling business.

The 30% commission on in-app purchases, and the popularity of the App Store, have been major contributors to Apple's bottom line. In the second quarter, the one most recently reported, Apple booked nearly $4 billion in revenue, or about 11% of its total, from the division that included the App Store, iTunes store and other services.

The DOJ remedies must past muster with the court, which will next meet Aug. 9 for a hearing on the proposal.

 

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