Publishers Don't Agree with DOJ's Consequences for Apple's Ebook Ruling
August 8, 2013 11:25 AM
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The publishers say the new restrictions hurt publishers, not Apple
Book publishers aren't happy with the U.S. Department of Justice's (DOJ)
for Apple as a result of the eBooks ruling.
The five book publishers, which took part in an agency price model with Apple and were targeted in the DOJ investigation as well, said that the new solutions punish the publishers more than they do Apple.
Furthermore, they said that the restrictions on Apple go against the previous settlements between the publishers and the DOJ, where the publishers have already paid $166 million to benefit consumers.
"Despite achieving their stated goal of returning price competition, plaintiffs now seek to improperly impose additional, unwarranted restrictions on the settling defendants, thereby depriving each publisher of the benefit of its bargain with plaintiffs," wrote the publishers.
The publishers -- including Hachette Livre (Lagardère Publishing France), Harper Collins (News Corp., U.S.A.), Simon & Schuster (CBS Corp., U.S.A.), Penguin (Pearson Group, United Kingdom) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany) -- filed a motion on Wednesday in U.S. district court in Manhattan. The motion said that the proposals don't place any limitations on Apple's pricing behavior, but instead punishes publishers by preventing them from having agency agreements with Apple.
This all started in April 2012, when the
U.S. Department of Justice (DOJ) sued Apple and the five book publishers
for using an agency pricing model in their agreements. This means that publishers were allowed to set the price of a book and Apple would take a 30 percent cut. In addition, the publishers could not let rivals sell the same book at a lower price.
Last month, Apple -- which was the only company to go to trial regarding eBooks while the book publishers had already settled with the DOJ -- was found guilty of conspiring to raise eBook prices. U.S. District Judge Denise Cote handed down the ruling, saying that consumers and competitors were negatively affected by the arrangement Apple had with the book publishers.
As a result, the DOJ and 33 U.S. states and territories devised
a list of solutions
to punish Apple. These included that Apple be banned from entering anti-competitive e-book distribution contracts for five years; end its business models with the five publishers it conspired with; use an outside monitor to make sure that its antitrust policies are effective, and allow retailers like Amazon and Barnes & Noble to provide links to their options for two years.
A hearing to discuss remedies and hold a trial on damages will take place on August 9.
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I don't see how this "punishes" publishers
8/8/2013 5:05:03 PM
Publishers are no longer able to profit from the illegal deal they set up with Apple by selling their books to online marketplaces at the increased price they arranged with Apple and they no longer have an artificial way to force Amazon to raise their prices but neither of those are punishments to the publishers. No longer benefiting from an illegal agreement is not a punishment, it's simply being required to follow the law.
"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain
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