Judge hits Apple with e-book injunction, requires external compliance monitor
On Friday, a federal judge barred Apple from entering into further price-fixing agreements with other parties, and also ordered the that the iPad maker bring on an external compliance monitor in order to ensure the company's iBookstore does not again violate antitrust laws.
U.S. District Judge Denise Cote ? the same judge that presided over Apple's e-book price fixing trial ? handed down an injunction against the Cupertino company. Under the order,, Apple cannot enter into 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 order comes in the wake of the Department of Justice's court victory over Apple, a case in Cote found that Apple was liable for "facilitating and encouraging the [publishers]' collective, illegal restraint of trade."
Under Cote's 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.
Apple would also be barred from enforcing "most-favored-nation" clauses in ebook publishing contracts for five years, as well as 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 majors that settled with the DOJ.
The injunction, set to go into place in 30 days, has 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 at the behest of the DOJ.
In addition to 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. Apple has previously resisted such action, arguing that it would cause undue cost and burden.
Cote promised to levy the injunction last week, and she delivered on Friday. The judge's order in the case is narrower than the punishment the Justice Department had earlier argued for.
"I want this injunction to rest as lightly as possible on how Apple runs its business," Judge Cote was quoted as saying.
U.S. District Judge Denise Cote ? the same judge that presided over Apple's e-book price fixing trial ? handed down an injunction against the Cupertino company. Under the order,, Apple cannot enter into 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 order comes in the wake of the Department of Justice's court victory over Apple, a case in Cote found that Apple was liable for "facilitating and encouraging the [publishers]' collective, illegal restraint of trade."
Under Cote's 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.
Apple would also be barred from enforcing "most-favored-nation" clauses in ebook publishing contracts for five years, as well as 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 majors that settled with the DOJ.
The injunction, set to go into place in 30 days, has 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 at the behest of the DOJ.
In addition to 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. Apple has previously resisted such action, arguing that it would cause undue cost and burden.
Cote promised to levy the injunction last week, and she delivered on Friday. The judge's order in the case is narrower than the punishment the Justice Department had earlier argued for.
"I want this injunction to rest as lightly as possible on how Apple runs its business," Judge Cote was quoted as saying.
Comments
None of this will affect Apple's business in the short run - and it's likely to be overturned before this ruling has any significant impact.
Not to mention that some of the new rules are blatantly anti-competitive. For example, staggered negotiations? So if publisher #1 gets some concession from Apple tomorrow, the other publishers can't negotiate for that concession for several years? Could it be any more anticompetitive than that?
Everything Judge Cole does makes it even more likely that this will be overturned.
2. Apple is already working on an appeal.
What consumers really need is industry wide rules, not ones that target only one company. Things that limit top pricing, exclusive deals etc. For alll forms of media. It would also be nice tosge some rules about reasonable parity between physical and digital versions in terms of quality, extra features, subtitles etc.
jragosta: have you read that Apple has actually filed such an appeal? I would have expected they would have, but have not heard any definitive information that says they actually have. Aren't they past the deadline for filing an appear if they haven't already?
Besides a backwards justice system, Apple's eBook "problem" is that they just don't have enough lobbyists in DC.
They said that they were planning to file an appeal and it would be truly bizarre if they didn't. However, I haven't seen any notice that the appeal has actually been filed.
So, if this actually goes in effect, it would be nice if Samsung had to actually pay the money due also.
That's the reason the government is so screwed up in the first place... too many lobbyist. We don't have anyone decent in government anymore b/c in order to get in you have to get through the wall of special interests and their money. No one in government is interested in the well being of their constituents anymore. If anything I admire Apple for generally steering clear of that mess, unlike Google. What needs to happen is for us to bar private money from government and then clean house of all the rats that are there now. Combine that strategy with term limits for everyone and you'll have a government that functions again. Oh, and can we agree to never elect someone to office who things government is the problem to everything.... if you don't believe that a democratic government can function properly then why they heck should you be hired to run that government?... just pure insanity.
I understand what you mean and agree, but Apple giving concessions was a bad example.
Edit: I see the word spelled "eff you see kay" is now censored... welcome to free speech!
I knew it wasn't going to go good for Apple when the publishers settled, all of these publishers at one time or another published books for presidents, ex-presidents, senators, representives, supreme court judges, etc. Do you not think that they called upon their political connections for some help?
Anti dumping laws are made to protect consumers in the long term, but in USA they seem to be valid only to block international trades. Now US government is protecting the main dumping actor: Amazon. This will have serious cultural implications; although Apple, one way or another, will end up selling more books that anybody else. Unless US judges keep helping Citizen Bezos to build his monopoly, and then charge whatever he wants for books, sell whatever he feels is profitable for him. or distribute just what fits his own taste. Dark ages.
Why is it a bad example? Her decision makes it impossible for any publisher to get a better deal for several years.
Here's a summary of the appeals issues:
http://tech.fortune.cnn.com/2013/07/10/apple-ebook-verdict-appeal/
At least you admit your inability to be objective.
Because how often does Apple give concessions?