John Paczkowski

Recent Posts by John Paczkowski

DOJ Calls for Apple to End Book Deals, Link to Rival Bookstores

steve_jobs_ibooksFollowing a court decision last month that found Apple illegally conspired to fix e-book prices, the United States Department of Justice and 33 state attorneys-general proposed the remedies they say will end the activities of which the company was found guilty and restore competition to the market.

If approved by a court, the DOJ’s proposal will require Apple to …

  • … terminate its e-book deals with Hachette Book Group, HarperCollins Publishers, Macmillan, Penguin and Simon & Schuster
  • … refrain for five years from entering new e-book distribution deals which would free it from having to compete om price.
  • … allow for two years rival e-book retailers like Amazon and Barnes & Noble to provide links from their e-book apps to their own e-bookstores without paying any fee or commission to Apple on sales made through them.
  • … refrain from entering into agreements with other providers of music, movies, TV shows or books that might increase the prices at which rival retailers sell that content.
  • … appoint, and pay for, an external monitor to ensure that its internal antitrust compliance policies are sufficient and rigorously observed.

The proposed remedies are essentially those the DOJ said it would seek when it brought its suit against Apple.
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.”

Of the proposed remedies the one adjusting Apple’s App Store rules is by far the most interesting. Currently, Apple forbids third-party ebook retailers like Amazon and Barnes & Noble from linking to their own online bookstores from their Kindle and Nook iOS apps. The DOJ’s proposal would eliminate that rule, “allowing consumers who purchase and read ebooks on their iPads and iPhones easily to compare Apple’s prices with those of its competitors.”

Apple has not yet responded to a request for comment.

Here’s the DOJ’s proposal. A hearing on the remedies it describes will be held on Aug. 9.

US v Apple Proposed Remedy Brief


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— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google