Less than a month after a US federal judge ruled that Apple conspired to raise prices on e-books, the US Department of Justice (DoJ) has proposed “a remedy” to address Apple’s price-fixing.
The DoJ has stipulated that Apple should terminate its agreements with the five implicated publishers, and their should be provision for a court-appointed external monitor. Furthermore, competitors such as Amazon and Barnes & Noble should be allowed to provide links from their e-book apps directly to their own digital bookstores.
“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.”
Last year, we reported that the United States Department of Justice (DoJ) was going ahead with lawsuits against Apple and five major publishers – Hachette, HarperCollins, Macmillan, Simon & Schuster and Penguin – over alleged e-book price fixing. Essentially, the DoJ was investigating whether Apple’s deals with the publishers amounted to price-rigging, in the wake of the iPad’s launch back in 2010.
The recent news that Apple had been found guilty of conspiring to fix prices came less than two months after Penguin became the last publisher to settle the case, paying $75 million in the process.
This was the single biggest payout from the five publishers implicated in the case, and followed Simon & Schuster, Hachette Book Group and HarperCollins, which had previously agreed to settle for around the $70m mark, then MacMillan also agreed to pay $12m earlier this year.
The story so far
The crux of the issue, according to the US Department of Justice (DoJ), was that Apple had conspired with the publishers in question to try and oust Amazon from its pole-position in the online e-book market, by ensuring books remained above Amazon’s typically lower prices. Essentially, it was about the publishers – not the retailer (e.g. Amazon) – being able to set prices. By having five of the six major publishers agree to this, this went a long way towards stifling competition.
In terms of the external monitor recommended today, well, the DoJ is asking the court to appoint a third-party to ensure “Apple’s internal antitrust compliance policies are sufficient to catch anti-competitive activities before they result in harm to consumers”.
It’s recommended that Apple would cover the costs of this appointment, who will ultimately work towards training Apple’s senior executives, as well as other employees, on antitrust laws.
Feature Image Credit – Spencer Platt/Getty Images
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