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US proposes resolution to Apple e-book price fixing


Just a few weeks ago, Apple found itself on the wrong side of a decision when US District Judge Denise Cote ruled that Apple had, in fact, conspired with book publishers to raise the price of e-books across the industry.

Today, the DOJ announced a proposed remedy for Apple's alleged wrongdoing. The remedy aims to stop Apple's "illegal activities" and restore competition to the e-book marketplace.

As laid out by the DOJ, the proposed remedy not only requires Apple to put an end to its existing agency-model contracts with book publishers, but also precludes Apple from entering into "new e-book distribution contracts which would restrain Apple from competing on price."

The DOJ writes:

Under the department's proposed remedy, Apple will be prohibited from again serving as a conduit of information among the conspiring publishers or from retaliating against publishers for refusing to sell e-books on agency terms. Apple will also be prohibited from entering into agreements with suppliers of e-books, music, movies, television shows or other content that are likely to increase the prices at which Apple's competitor retailers may sell that content. To reset competition to the conditions that existed before the conspiracy, Apple must also for two years allow other e-book retailers like Amazon and Barnes & Noble to provide links from their e-book apps to their e-bookstores, allowing consumers who purchase and read e-books on their iPads and iPhones easily to compare Apple's prices with those of its competitors.

That certainly seems heavy handed.

The DOJ also recommends that Apple be appointed an external monitor by the court who will ensure that the company doesn't run afoul of any antitrust laws going forward. And as if that weren't enough, the monitor's salary and expenses will, according to the proposal, be paid for by Apple.

Think the DOJ is done?

Not quite.

The DOJ also recommends that Apple hire an internal antitrust compliance officer who will not only ensure that Apple complies with court imposed remedies, but will also be tasked with training and educating Apple's senior executives and employees about pertinent antitrust laws.

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