DOJ proposes e-book remedies for Apple case

The DOJ wants Apple (AAPL +0.3%) to terminate its existing deals with five top book publishers, and to "refrain for five years from entering new e-book distribution contracts which would restrain Apple from competing on price."

It also wants Apple to be "prohibited from again serving as a conduit of information among the conspiring publishers," and from entering into content deals that are likely to raise competitor content prices.

In a positive for Amazon (AMZN -0.3%) and Barnes & Noble (BKS -0.1%), the DOJ also proposes Apple allow e-book rivals to "provide links from their e-book apps to their e-bookstores" for two years. Such a requirement would give Amazon and B&N a way to sell e-books on iDevices without giving Apple a 30% cut. Amazon has been trying to avoid paying Apple via its Kindle Web apps, but that's an imperfect workaround at best.

Previous: U.S. district judge declares Apple guilty of e-book price-fixing.

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Comments (15)
  • Cintos
    , contributor
    Comments (206) | Send Message
    I thought all publisher had previously terminated their Agency contracts with Apple as a condition of their earlier DOJ settlements... or is this a requirement that Apple terminate any agreement of any kind, and exit the book application market for 2 years?
    2 Aug 2013, 11:01 AM Reply Like
  • hardmanb
    , contributor
    Comments (36) | Send Message
    It looks like Amazon is using the DOJ to avoid paying apple it's 30% iBooks cut, and keep all the profits for themselves.


    Remember, despite massive contributions to the Obama campaign, and various contacts between the two, Amazon designed the database and subsidiary software for Obama's campaign which produced hundreds of millions for his campaign...and future Democrat Party use.
    2 Aug 2013, 11:01 AM Reply Like
  • NYC Trader
    , contributor
    Comments (510) | Send Message
    This is kind of insane. The role of government is reaching new levels of abuse. Flexing their muscles to attack good American companies. I am in disbelief and I hope Apple wins in appeals.
    2 Aug 2013, 11:08 AM Reply Like
  • Topcat
    , contributor
    Comments (580) | Send Message
    Price fixing is price fixing,,and works against the free market and consumers. Glad to see DOJ act. Apple can charge whatever they want, just so they don't prevent the competition from making the deals that they want.
    2 Aug 2013, 11:15 AM Reply Like
  • NYC Trader
    , contributor
    Comments (510) | Send Message
    Were you following the case? They alleged price fixing because Apple negotiated higher prices on Apple products. There was not even preponderance of evidence that there was any wrongdoing on Apple's part. This is a scam case and they'll 100% win in appeals.
    2 Aug 2013, 11:19 AM Reply Like
  • krk
    , contributor
    Comments (866) | Send Message
    Bob Kohn, a lawyer and music licensing expert, tried to communicate this to the judge presiding over the case in a comic-strip form, but even at that she failed to grasp the common-sense aspect of the issues.
    2 Aug 2013, 11:49 AM Reply Like
  • rickraphael
    , contributor
    Comments (345) | Send Message
    Thanks for linking to that brief. I never understood the judge's comments and decision in the case. They're even more baffling in light of Kohn's brief.
    2 Aug 2013, 12:22 PM Reply Like
  • krk
    , contributor
    Comments (866) | Send Message
    And this from a Barron's editorial piece:
    Thomas G. Donlan: Who Calls the iTune?
    In 2010, book publishers felt that they had lost control of their product and they didn't know what to do. Amazon was discounting e-books more heavily than the publishers liked, but they were too lazy, too risk-averse, or too lacking in tech savvy to cut a better deal with the dominant e-tailer or to start an e-marketplace of their own.
    To lure stodgy book publishers to help Apple compete with Amazon, Jobs offered them a deal.
    While Amazon paid publishers their wholesale price and had the power to set its prices high for profit or low to attract customers, Apple would let the publishers set e-book prices in the iBookstore and Apple would keep 30%.
    According to Judge Denise Cote, the publishers were trying to create a cartel. But to Apple, it was simply an arrangement to help it compete with Amazon.
    Most peculiarly, the judge encouraged Amazon to seek damages from Apple for lost market share. If antitrust means anything, it should mean that the government goes after dominant firms like Amazon to let more competitors, like Apple, into the market.
    Of course, antitrust doesn't mean anything except that the government makes the rules. Amazon won this round, but soon it will join the ranks of IBM, Microsoft, Apple and Google as a new defendant in another high-tech mugging. It's still dominant in e-book retailing, which makes it a target.
    ..publishers and other middlemen are facing extinction in the age of the Internet and have no idea what to do about it. When the Justice Department and 33 state attorneys general came after them, they took the cheap exit of paying $165 million to settle, neither admitting or denying guilt and promising not to do it again. The case is moot, except for the government's effort to punish Apple for choosing to fight.
    Apple is standing up for liberty, but that isn't necessarily wise or safe in modern America. IBM and Microsoft fought ridiculous antitrust charges for years and came away with little to show their shareholders except lost opportunities and corporate cultures that became obsessed with not doing it again.
    The problem demands a bigger solution. Congress or the Supreme Court should save Apple by trimming back antitrust law to recognize our long-lost economic rights.
    2 Aug 2013, 01:29 PM Reply Like
  • jpintoctr
    , contributor
    Comments (725) | Send Message
    It is scary. I am glad Apple will appeal.
    2 Aug 2013, 11:16 AM Reply Like
  • imac007
    , contributor
    Comments (744) | Send Message
    It's ridiculous. It"s like Target being forced to provide shelf and checkout space to Walmart because competing vendors decided to use Target as a platform for new product releases, to provide leverage against Walmart deep discounting certain products.


    A basic online monopoly is being favored over a competitive marketplace. Online book sales account for an increasing majority of sales. This shift, the monopoly it creates, and Amazon's "build a pipeline" business strategy with its potential fallout, create a scary scenario. Attracting consumers with low margin and loss leader books to buy the kindle shopping carts at cost, is reflected in recent margins. The barrier to entry it creates is allowing them to become a singular retail entity that can dwarf others. Once the pipeline is in place you can put any product through it. When you become the dominant marketplace you get to dictate prices. That is not competition.
    2 Aug 2013, 11:40 AM Reply Like
  • consultnick
    , contributor
    Comments (377) | Send Message
    I must confess to being really flummoxed by this judge's position and verdict. It does seem that some unseen force has influenced her (perhaps the Obama stuff referred to by hardmanb, in a preceding comment).


    What I found to be ridiculous was that she published a "sort of verdict" BEFORE the trial! It was widely disseminated in the media. Talk about "prejudice"--that action almost defines it! I believe Apple has a case for a turnover on that basis alone. Clearly, the judge had made up her mind BEFORE seeing the evidence and hearing the arguments.


    This is the most bizarre example I am aware of in efforts to support a monopolistic situation enjoyed by Amazon. It makes no sense--especially from a consumer point of view. Since this all began, Amazon has increased book prices significantly, and has been quashing writers and small scale publishing concerns. The consumer to be protected from monopolistic practices is already being abused!


    It may be important to remember that Amazon may have some muscle as a huge supplier of cloud space to government data needs. A large contract was recently signed--gotta keep all of that "metadata" regarding phone-snooping somewhere!
    2 Aug 2013, 01:17 PM Reply Like
  • Arthur Fisher
    , contributor
    Comments (347) | Send Message
    This DOJ is a disgrace to the nation, possessed by a partisanship that makes the Bush years look like a garden of innocence by comparison.
    2 Aug 2013, 01:52 PM Reply Like
  • Gary Bushwacher
    , contributor
    Comments (543) | Send Message
    "The DOJ wants Apple (AAPL +0.3%) to terminate its existing deals with five top book publishers, and to "refrain for five years from entering new e-book distribution contracts which would restrain Apple from competing on price."




    What the DOJ "wants", the DOJ doesn't necessarily get . . . especially if they're wrong
    2 Aug 2013, 05:38 PM Reply Like
  • milehr
    , contributor
    Comments (687) | Send Message
    The WH mafia's extortion. They are eyeing that Apple's cash.
    2 Aug 2013, 05:53 PM Reply Like
  • what do I know
    , contributor
    Comments (1044) | Send Message
    D. O. J. can go to hell!
    5 Aug 2013, 11:27 AM Reply Like
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