August 23, 2014

“Justice Department Wants Apple to Terminate Existing Book Deals and Compete on Price”

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UPDATE: Apple has filed a brief responding to DOJ’s proposed remedy. We’ve posted a report and the full text of the filing at the bottom of this infoDOCKET post.

From The Verge:

Earlier this month Apple was found guilty of ebook price fixing in a lawsuit brought by the US Department of Justice, and now the DoJ is offering “remedies” to ensure Apple never repeats the anticompetitive behavior. The proposal was submitted by the Justice Department along with 33 state attorneys general today, and calls for Apple to terminate its deals with the five publishers involved in the original suit.

Read the Complete Story

More from the US Dept. of Justice Announcement

The department’s proposal, 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. – and to refrain for five years from entering new e-book distribution contracts which would restrain Apple from competing on price.

Under the department’s proposed remedy, 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.

Additionally, the Department of Justice is asking the court to appoint an external monitor to ensure that Apple’s internal antitrust compliance policies are sufficient to catch anticompetitive activities before they result in harm to consumers.

The monitor, whose salary and expenses will be paid by Apple, will work with an internal antitrust compliance officer who will be hired by and report exclusively to the outside directors comprising Apple’s audit committee. The antitrust compliance officer will be responsible for training Apple’s senior executives and other employees about the antitrust laws and ensuring that Apple abides by the relief ordered by the court.

Read the Complete USDOJ Announcement

Proposed Remedies by DOJ and State Attorney Generals in Apple Case

Proposed Final Judgement in U.S. v. Apple

UPDATE: Apple calls the DoJ’s ebook remedy a draconian and punitive intrusion into its business (via The Next Web)

Apple has today filed a brief in opposition to the Department of Justice’s proposed ‘remedy’ in the ebook price fixing case. The statement speaks out against changes which the DoJ suggested earlier today, which would include prohibiting Apple from making certain pricing deals for 5 years and allowing publishers to link to their own stores for two years.

The opposition comes out strong right off the bat, calling the proposed changes ‘draconian’ and ‘punitive’.

Apple's Response to DOJ Proposed Remedy

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Gary Price About Gary Price

Gary Price (gprice@mediasourceinc.com) is a librarian, writer, consultant, and frequent conference speaker based in the Washington D.C. metro area. Before launching INFOdocket, Price and Shirl Kennedy were the founders and senior editors at ResourceShelf and DocuTicker for 10 years. From 2006-2009 he was Director of Online Information Services at Ask.com, and is currently a contributing editor at Search Engine Land.