Last month a court found Apple guilty of illegally conspiring to fix ebook prices, and today the U.S. Department of Justice and 33 State Attorneys General have proposed a set of solutions to “remedy” the iPhone maker’s actions. Put clearly, the feds are asking a court to enforce the request, which it says is “intended to halt Apple’s anticompetitive conduct, restore lost competition and prevent a recurrence of the illegal activities.”
The proposal mostly includes expected measures. If the court accepts it, Apple would have to terminate its existing agreements with Hachette Book Group, HarperCollins, MacMillan, Penguin and Simon & Schuster–which are the five publishers Apple was found guilty of conspiring with in last month’s verdict. It would then have to wait another five years before it could enter into any new ebook distribution contracts that could be found to keep Apple from competing on price.
More generally, the Cupertino clan wouldn’t be able to enter into any agreements with ebook, movie, TV, music or similar media suppliers that could be found to force competitors to inflate the prices of the same media content in their marketplaces. Apple would also need to pay a court-appointed “external monitor” that would make sure the company sticks to the proposal’s demands. Essentially, most of the proposal says Apple would legally be unable to do everything it was found guilty of doing last month.
There is one aspect of it that’s a little more interesting, though. In an effort to further increase competition, the DOJ wants Apple to give rival ebook retailers like Amazon and Barnes & Noble the ability to link to their own bookstores within their iOS apps. This would be enforced for two years, and the DOJ claims it would let ebook buyers more easily compare Apple’s prices with those of its competitors. The ruling would reverse the no external linking policy Apple currently has in place with regard to third-party ebook sellers.
“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 Assistant Attorney General in charge of the Department of Justice’s Antitrust Division Bill Baer. “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.”
These measures are not official at this point, but the DOJ says that a hearing on them will be held on August 9. We’ve reached out to Apple for comment on the demands, and we’ll update this post if we hear back.
Source: Department of Justice