U.S. offers to ease Apple injunction; lawyer claims Ford overcharged truck dealers

August 23, 2013
e-books
U.S. offers to ease injunction on Apple

The United States offered to ease the terms of a proposed civil injunction against Apple for conspiring to raise e-book prices, but the company said the revised proposal is still designed to “inflict punishment” and must be rejected.

At issue is how to ensure that Apple does not violate antitrust law, following a July 10 ruling by U.S. District Judge Denise Cote in Manhattan that it had conspired with five major publishers to undermine pricing by rivals including Amazon.com, which dominates the market for electronic books.

Apple says the government is overreaching by insisting that it hire an external monitor, let e-book retailers add hyperlinks to their own Web sites in their e-book apps without charge and face limits on how it negotiates for other content including movies, music and TV shows.

Cote must approve any injunction.

In a court filing, the Justice Department, joined by 33 U.S. states and territories, suggested halving the length of its previously proposed injunction to five years from 10, with leave to seek as many as five one-year extensions if needed.


Global public spending on education varies widely.

At Cote’s suggestion, they also recommended that Apple hold staggered negotiations with the publishers starting in two years, hopefully minimizing the chance of future collusion, and removed previously proposed language that they said Apple had claimed would hurt its ability to run its popular App Store.

But in rejecting other changes that the company wanted, and while expressing a desire not to “unnecessarily harm Apple,” the governments said the Cupertino, Calif.-based company’s continuing refusal to admit it did anything wrong warranted tough medicine.

“Quite simply, Apple wants to continue business as usual, regardless of the antitrust laws,” the filing said. “This court should have no confidence that Apple on its own effectively can ensure that its illegal conduct will not be repeated. There must be significant oversight by someone not entrenched in Apple’s culture of insensitivity to basic tenets of antitrust law.”

— Reuters

automobiles
Lawyer claims Ford overcharged dealers

Ford Motor overcharged commercial truck dealers for 11 years, a lawyer said in the retrial of a lawsuit that initially resulted in a $2 billion judgment against the automaker.

“This case is about Ford breaking a contract promise it made to treat all of its dealers equally,” Dennis Mulvihill, an attorney for the dealers, said Friday in his opening statement in Ohio state court in Cleveland. He said Ford engaged in “a secret pricing scheme” that allowed it to take retail profits from dealers. Ford’s legal team will deliver an opening statement Monday.

The dealers sued Dearborn, Mich.-based Ford in 2002, claiming that the company broke an agreement to sell trucks at published prices, which forced them to pay more from 1987 through 1998. Cuyahoga County Judge Peter J. Corrigan in 2011 awarded $2 billion, including about $1.2 billion in interest, to a class of about 3,000 dealers.

A state appeals court ordered a new trial last year, finding Corrigan improperly excluded evidence that might have helped the company. The dealers will be seeking $2 billion again, plus additional interest, James Lowe, another lawyer for the plaintiffs, said in an interview before the trial.

Ford has denied any breaches or overcharging.

— Bloomberg News

Also in Business

l  Facebook’s stock closed above $40 for the first time Friday. The social network’s shares have gained 53 percent since July 24, when it reported strong growth in mobile ad revenue and a solid profit during its second quarter. The stock closed up 5.2 percent at $40.55, touching the highest price since its initial public offering. Facebook went public in May 2012 at $38 per share. There were lofty expectations, but the initial offering was marred by trading glitches. Worries about growth prospects then weighed on shares. They bottomed at $17.55 in September.

l  The Commodity Futures Trading Commission is preparing to reveal a laundry list of potential options to increase oversight of high-speed and automated trading, an agency official said Friday. The CFTC will likely approve the release next week of a report that includes more than 100 questions about how high-frequency traders impact markets, according to the official, who declined to be named because the report is not yet public. The public will be able to respond to the questions and submit comments on the report, called a concept release. The CFTC’s Technology Advisory Committee is expected to discuss the report at a meeting Sept. 12.

l  The price of oil rose for a second straight day Friday. Benchmark oil for October delivery gained $1.39 to close at $106.42 a barrel on the New York Mercantile Exchange. Oil rose $1.18 a barrel Thursday. Even with the two days of gains, oil fell $1.04 a barrel this week. Gasoline prices, meanwhile, ticked higher as the summer driving season winds down. The average price for a gallon of regular was $3.54 a gallon nationwide and $3.56 in the Washington area, according to AAA. Nationwide prices have held fairly steady over the past 10 days and are down 9 cents so far in August.

l  Electric Boat is laying off nearly 100 employees, company officials said Friday, citing factors including the Navy’s decision to cancel the repair of an attack sub, the USS Miami, which was set on fire by an arsonist while it was docked at a Maine shipyard in May 2012. A union that represents workers at the Groton, Conn., submarine builder said it was told by the company to expect as many as 500 layoffs over the next few months. The Navy decided to scrap the Groton-based attack submarine because of budget cuts and concerns that repair costs would run higher than an estimated $450 million.

l  Samsung Electronics and Apple do not have to make public the financial details submitted to a U.S. court during high-profile patent litigation, a federal appeals panel ruled Friday. The U.S. Circuit Court of Appeals in Washington reversed a lower court ruling that ordered the two companies to disclose portions of documents that contain profit and sales information.

l  American Airlines on Friday urged a bankruptcy judge to approve its Chapter 11 restructuring plan despite an antitrust challenge from the Justice Department to its proposal to merge with US Airways. In court papers filed in U.S. Bankruptcy Court in Manhattan, American’s bankrupt parent, AMR, said failing to approve the restructuring would add “a destabilizing factor” to the merger deal and its plans to pay back creditors.

— From news services

Coming Next Week

l  In Sunday Business: The rise of Goya, the nation’s largest Hispanic-owned food company.

l  Monday: Durable goods orders for July released, 8:30 a.m.

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