e-book settlement

Two 'e-book settlement' stories August 2013

Judge in e-book case ‘doesn’t want to intrude much on how Apple does business’

Photo: appadvice.com

Judge Cote, who is overseeing the e-books case involving the DOJ and Apple, said today that she does not want to “intrudce much on how Apple does business”, according to an AP article. This is the same judge that found Apple guilty of conspiring to raise prices.

As noted by ATD things morning, Apple recently submitted a court filing calling the latest proposed fixes for its damage to the industry as “broadside masquerading as a brief”. In addition, the company accuses the DOJ of working to give Amazon a competitive advantage. Just four days ago, the DOJ claimed the company’s IAP policies were directly motivated by competition from Amazon.

“Plaintiffs devote much of their brief to seeking to justify an injunction directed at Apple’s unilateral dealings with Amazon (and other e-book retailers) in its App Store, an issue that the plaintiffs did not pursue at trial. Plaintiffs are seeking a remedy that would give Amazon significant competitive advantage over Apple — an advantage it is neither entitled to nor deserves.”

Apple’s e-Book damages trial scheduled for May

A report earlier this month from GigaOM estimated that Apple could have to pay up to $500 million in consumer damages based on what the five publishers have paid through state and class action cases, but there was no financial related settlements included in the DOJ’s remedy proposal published earlier this month.

The DOJ published its proposal for a remedy in the case with Apple after having reached settlements with five other publishers initially involved earlier in the year. The DOJ’s proposed settlement includes the following:

-Apple must terminate its agreements with the 5 publishers involved

-Must “refrain for five years from entering new e-book distribution contracts which would restrain Apple from competing on price.”

-Must not “serve as a conduit of information among the conspiring publishers or from retaliating against publishers for refusing to sell e-books on agency terms”

-Must not enter contracts for music, movies, TV, or games, that will increase prices for competing retailers

-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 (on iPhone and iPad)

-Must “appoint an external monitor to ensure that Apple’s internal antitrust compliance policies are sufficient to catch anticompetitive activities before they result in harm to consumers”

For those unfamiliar with the e-book case, here’s a quick summary:

Apple is the last defendant in the case, as the five publishers initially involved– Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck, Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc–had settled with the courts previously. The publishers agreed to terminate agreements with Apple that would limit ebook price competition and “allow for retail price competition in renegotiated e-book distribution agreements.”

Apple responded to the DOJ’s proposed resolution by calling it a “draconian and punitive intrusion“. In addition, the book publishers also found the settlement to be unacceptable. We’ll have to wait until May for the jury to decide how Apple should pay up.