clock menu more-arrow no yes

Filed under:

Judge issues permanent injunction against Apple: no ebook price restrictions for four years

New, 136 comments

Apple exec Eddy Cue was accused of helping to orchestrate the ebook price-fixing scheme.

As expected, the judge overseeing the government's civil case against Apple for fixing ebook prices has issued a permanent injunction against the company. As part of her order, US District Judge Denise Cote made good on her promise to install a third party to monitor Apple's operations and ensure that the company complies with antitrust laws. The judge also required Apple to sever any agreements with the top five book publishers that restrict retail ebook prices in any way, and prohibited Apple from entering into any similar agreements for up to four years.

The government presented an overwhelming amount of evidence The Department of Justice accused Apple and five of the six largest book publishers last year of conspiring to raise and fix ebook prices. The government presented an overwhelming amount of evidence that showed that the publishers exchanged pricing information with each other either directly with each other or by using Apple as a conduit. All the publishers previously settled with the government, and in July, Cote found Apple liable for antitrust violations. The case is a blemish to Apple's reputation and a hit to its ebook business.

Cote is also requiring Apple to do away with a controversial clause in its contracts with publishers known as Most Favored Nation. This guaranteed that Apple's ebook prices would be equal to the lowest prices found online. All the court-ordered restrictions will last for varying lengths depending on the publisher. For deals with Hachette, two years; HarperCollins, 30 months; Simon & Schuster, three years; Penguin, 42 months; MacMillan, four years.

"Nothing in this [order]," Cote wrote, "prohibits Apple from entering into or maintaining an agreement with an ebook publisher merely specifying prices that Apple must pay for the ebook publisher's ebooks."

The judge did not give the feds all the remedies that they wanted The judge did not give the feds all the remedies that they wanted, however. For example, Apple was not required to allow Amazon and other ebook competitors to embed in their iOS apps links to their own stores. Apple issued a statement in response to the injunction: "Apple did not conspire to fix ebook pricing," an Apple spokesman said. "The iBookstore gave customers more choice and injected much needed innovation and competition into the market. Apple will pursue an appeal of the injunction."

Next up for Apple will be the 33 state attorneys general and a couple of class-action suits that have filed claims regarding the price fixing.