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Thread: Apple Hit with E-Book Injunction from Antitrust Case

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  1. #1
    MMi Staff Writer Akshay Masand's Avatar
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    Default Apple Hit with E-Book Injunction from Antitrust Case


    A federal judge barred Apple from entering into further price-fixing agreements with other parties and also ordered Apple to bring on an external compliance monitor in order to ensure the company’s iBookstore doesn’t violate antitrust laws again. The injunction was handed down against Apple by U.S. District Court Judge Denise Cote. Under this order, Apple can’t enter agreements with major U.S. publishing houses that would hinder its ability to lower e-book prices or offer discounts according to Reuters.

    Cote’s orders come in the wake of the DOJ court victory over Apple, a case in which Cote found that Apple was liable for “facilitating and encouraging the [publishers] collective, illegal restraint of trade.” Under the injunction, Apple will be required to stagger new contract negotiations with HarperCollins, Hachette, Simon & Schuster, Penguin and Macmillan. Negotiations with Hachette would begin two years after the effective date of the final judgment, with Harper Collins negotiations commencing six months after that. Apple would be able to enter negotiations with Simon & Schuster, Penguin and Macmillan successively every six months following.

    The Cupertino California company would also be barred from enforcing “most-favored-nation” clauses in e-book publishing contracts for five years, along with being barred from entering into any contract containing such a clause for five years. This aspect of the injunction applies to all publishers, not just the five major ones that settled with the DOJ. The injunction is set to go into place in 30 days with a duration of five years. The court can choose to extend the injunction though in “one or more one-year periods” at its own discretion or behest of the DOJ.

    On top of barring Apple from entering into antitrust agreements with the publishers, Cote also required that Apple bring in an external monitor to ensure compliance, saying that the monitor is necessary due to Apple’s “blatant” antitrust violations. The Cupertino California company previously resisted such actions, arguing that it would cause undue cost and burden but they seemingly have no choice in the matter anymore. Cote promised to levy the injunction last week and she delivered today. The judge’s order in the case is narrower than the punishment that the DOJ had pushed for earlier. According to Cote:

    I want this injunction to rest as lightly as possible on how Apple runs its business.
    We’ll have to see how these new rules affect Apple and the e-book industry going forward.

    Source: Reuters

    Twitter: @AkshayMasand

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    Another Judge has a hard on for Apple surprise surprise.

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