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Judge orders Apple to stop making special pacts with e-book publishers

Sharif Sakr

After plenty of tussling over the DoJ's proposed injunction against Apple, preventing it from striking untoward pricing deals with e-book publishers, a judge at the Southern District Court of New York has today laid down the law. The final injunction prevents Apple from setting prices with any of its partners for terms of between two and four years, with the exact term depending on which publisher it's working with and how long they originally took to settle with the DoJ -- which means Apple's relationship with Macmillan faces the harshest restriction.

Crucially, Apple also won't be able to make "most favored nation" pacts, in which e-book prices and discounts are set across a range of publishers or retailers. This particular bit of the injunction will last for five years -- a lengthy period of time in this industry, and one that can be extended by the court if it sees fit, but hardly the ten-year term that Apple's lawyers initially feared. Finally, another key clause prevents Apple from doing business with publishers behind closed doors. For the next two years, Cupertino will have to bring in an independent third party to serve as an "Antitrust compliance officer" in all deals. Sounds humiliating, perhaps, but again, given the relatively short duration, it could have been a lot worse.

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