Apple has recently been facing allegations from the Department of Justice concerning regulations for in-app purchases from the Apple App Store. This Tuesday, Judge Denise Cote freed Apple of the charges, stating that the DOJ cannot force Apple to change its in-app purchase rules.
The charges against Apple came from the federal government – they wanted to change the way Apple does business in all content markets, not just eBooks. All the controversy comes from a change that Apple made in 2011 to compete with companies in the same industry, such as Amazon. Apple changed in-app purchases to require that all content must be sold through the iTunes store as well as forbidding outside websites to make purchases. These changes applied to all content – music, eBooks, apps, etc.
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With this change came dissatisfaction from the DOJ, which thought that Apple was doing this in an attempt to make it difficult for Apple users to compare prices, and impossible for Apple users to purchase from other dealers on their Apple devices. The DOJ thought this may develop into a monopoly kind of situation, and Apple’s resistance to change indicated concern about what Apple was doing, and what they planned to do.
The DOJ wanted to institute required staggered meetings in which Apple would negotiate with publishers, but the publishers were less than enthusiastic because it would extend the time that Apple is allowed to discount their books. Therefore, the DOJ decided to take action with the recent allegations.
Apple was the victor in the end, as declared this Tuesday by Judge Cote. However, because Apple was found guilty last month by Cote of conspiring with publishers to set eBook prices, Cote was inclined to assign an external monitor to watch Apple’s conduct and actions, much to Apple’s dismay.
Cote remains supportive of Apple, proclaiming that she wants Apple “to have the flexibility to innovate.” Although at the hearing there was little mention of staggered negotiations, Apple had agreed to publishers renegotiations every six months, and this idea is likely to remain relevant throughout in the final injunction.
Edited by Alisen Downey