DOJ proposes contract terminations, App Store rule changes, in Apple ebook case
The Department of Justice on Friday, which last month won its case against Apple over ebook price-fixing, issued its proposed remedy to address Apple’s guilt, in conjunction with 33 state attorneys-general. That remedy, the DOJ says, “is intended to halt Apple’s anticompetitive conduct, restore lost competition, and prevent a recurrence of the illegal activities.” The proposal is not binding, but instead a recommendation to the judge on how the government thinks the court should proceed.
The DOJ proposes that the court require that Apple terminate its existing agreements with the five major publishers—the ones with whom Apple was found guilty of colluding: Hachette Book Group, HarperCollins, Macmillan, Penguin, and Simon & Schuster. It further proposes that Apple be barred “for five years from entering new ebook distribution contracts which would restrain Apple from competing on price.”
Apple would also be prohibited from “again serving as a conduit of information among the conspiring publishers,” or from punishing those publishers who decline to sell their ebooks on Apple’s preferred terms. The DOJ’s proposal further suggests that Apple be “prohibited from entering into agreements with suppliers of ebooks, music, movies, television shows or other content that are likely to increase the prices at which Apple’s competitor retailers may sell that content.”
And that’s not all. The DOJ also wants to fiddle with Apple’s App Store rules. Currently, Apple disallows third-party ebook vendors like Amazon and Barnes and Noble from linking to their online bookstores from within their iOS apps. The DOJ’s proposal suggests eliminating that rule for two years, “allowing consumers who purchase and read ebooks on their iPads and iPhones easily to compare Apple’s prices with those of its competitors.”
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