DOJ Publishes Proposed Remedies in eBook Price Fixing Suit Against Apple

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The U.S. Department of Justice has published its proposed remedies to address Apple's price fixing as a result of its case against Apple. The "Remedy Would Require Apple to Terminate Agreements with Five Publishers; Provide for a Court-Appointed External Monitor; Allow Competitors to Provide Links from Their E-Book Apps to Their E-Bookstores."

The U.S. DOJ office of public affairs posted this item on Aug 2. “ 'The court found that Apple’s illegal conduct deprived consumers of the benefits of e-book price competition and forced them to pay substantially higher prices,' said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. 'Under the department’s proposed order, Apple’s illegal conduct will cease and Apple and its senior executives will be prevented from conspiring to thwart competition in the future.' ”

Proposed remedies, if approved by the court, will:

Require Apple to terminate its existing agreements with the five major publishers with which it conspired – Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, which does business as Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc.

Require Apple to refrain for five years from entering new e-book distribution contracts which would restrain Apple from competing on price.

Apple will be prohibited from again serving as a conduit of information among the conspiring publishers or from retaliating against publishers for refusing to sell e-books on agency terms.

Apple will also be prohibited from entering into agreements with suppliers of e-books, music, movies, television shows or other content that are likely to increase the prices at which Apple’s competitor retailers may sell that content.

To reset competition to the conditions that existed before the conspiracy, Apple must also for two years allow other e-book retailers like Amazon and Barnes & Noble to provide links from their e-book apps to their e-bookstores, allowing consumers who purchase and read e-books on their iPads and iPhones easily to compare Apple’s prices with those of its competitors."

Finally, the DOJ noted that: "The court issued its opinion that Apple Inc. violated Section 1 of the Sherman Act on July 10, 2013. The court will hold a hearing on remedies on Aug. 9, 2013."

Apple intends to appeal the decision.

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Comments

skipaq

This administration is on a power trip of epic proportions. They seem to monitor and control our lives more and more with each grab. If this DOJ would put half as much effort into government abuse of power we would be better served and less ruled over.

Neil Anderson

Is it April 1st?

Tony Crooks

It might well be April 1st. I suggest Apple just shutters the iBookstore and lets the DoJ sort the resulting mess out. Once the DoJ gets to grips with the resulting monopoly then Apple can offer to resume trading ebooks on an agency basis. Good riddance to bureaucrats!

akcarver

I don’t understand why people are upset about this. Because of Apple’s actions, as I understand them, I have to pay more for an ebook than I would if not for those actions. Can someone explain how I am wrong?

adamC

So what about the MFN agreement Amazon signed with the publishers, will it be rescinded or it will stay.

Yes to judge Cote George Zimmerman is innocent on all counts.

Lee Dronick

Skipaq, do you really think that this emanated from the Whitehouse?

Anyway do we have any numbers on how many books on iOS devices come from the iTunes Store and how many come from other sources?

skipaq

Yes, I do think this has White House approval. Without it the DOJ would not have acted.

mrhooks

akcarver, there are two things.  One, Amazon will keep prices low only as long as it serves a purpose (such as eliminating the competition).  Two, the publishers would have gotten more money from Apple’s agency model, which would help them stay alive.  As Amazon is becoming a publisher in its own right, its monopoly position will have the potential to put the other publishers out of business, just as it has done to many bookstores.

BurmaYank

akcarver, third:  Apple was innocent of what the DOJ (and that self-confessedly prejudiced judge) accused Apple of.  There WAS no evidence of anyone in Apple leading a conspiracy to make the publishers illegally fix prices.

daemon

@BurmaYank:

Steve Jobs himself got up on stage and said he got together with a bunch of publishers with the express purpose of fixing ebook prices for the industry at $14.99.

Doing that is what’s illegal BurmaYank! You can’t sit down with a group of competitors and all agree to set the price of a commodity.

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