This afternoon, Apple and the DOJ will be in court to decide the fate of the agency model implementation in the iBookstore. The court has already ruled that Apple has been working with publishers to price-fix and raise the prices of ebooks, but now a punishment must be determined.
This morning, the DOJ responded to publishers’ concerns about the remedies and claimed that, since they are even responding together, they have shown once again how they are banded together (PDF of full response - via GigaOM):
Indeed, the very fact that the Publisher Defendants have banded together once again, this time to jointly oppose two provisions in the Proposed Final Judgment that they believe could result in lower ebook prices for consumers, only highlights why it is necessary to ensure that Apple (and hopefully other retailers) can discount ebooks and compete on retail price for as long as possible.
The DOJ’s proposed solution included the following:
- Terminating agreements with the 5 publishers involved
- Refraining from entering new e-book distribution contracts which would restrain Apple from competing on price for five years
- Must allow other e-book retailers like Amazon and Barnes & Noble to provide links from their e-book apps to their e-bookstores for two years
Apple responded by calling the proposed remedy ‘draconian and punitive‘. The publishers also spoke out against the ruling and remedy.
We’ll soon find out how the court will rule and what repercussions this will have in the industry. Apple’s lawyers will be out in full force today, as Apple will be in court for the ebook case, the ITC patent case against Samsung, and a hearing of Apple’s appeal against the court’s unfavorable ruling regarding the ban of older Samsung products being sold.