U.S. Department of Justice wants ludicrous restrictions placed on Apple, iBooks

U.S. Department of Justice proposes solution to Apple ebook price-fixing

The U.S. Department of Justice has proposed a solution to address Apple's ebook price fixing. The remedy places restrictions on how Apple makes deals with publishers, including the immediate termination of their current deals with five publishers, and forces Apple to change policy with regards to ebook apps linking to external stores for at least two years. Additionally, the order would have the court appoint an external antitrust monitor at Apple, says the DOJ release:

The monitor, whose salary and expenses will be paid by Apple, will work with an internal antitrust compliance officer who will be hired by and report exclusively to the outside directors comprising Apple’s audit committee. The antitrust compliance officer will be responsible for training Apple’s senior executives and other employees about the antitrust laws and ensuring that Apple abides by the relief ordered by the court.

Apple was found to have consipired to fix ebook prices on July 10. Apple has said that they plan to appeal the ruling, though their chances of success are very slim. The five publishers that had also been sued by the DOJ had previously settled last year.

One element of the DOJ's proposed remedy which is of particular interest is the ebook apps policy change. Currently, apps are not allowed to link to external stores, including ebook apps like Amazon's Kindle or Barnes & Noble's Nook app. The Kindle app recently found a workaround for this issue, but if the solution is accepted by the court, Apple will be forced to allow the Kindle, Nook, and other ebook apps to link to their companies' stores to allow customers to compare prices easily.

This proposal by the DOJ, along with others will be presented to the court in a hearing held later this month.

Source: U.S. Department of Justice

Joseph Keller

Joseph Keller is a news reporter for iMore. He's also chilling out and having a sandwich.

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There are 18 comments. Add yours.

markm929 says:

Will the other companies (e.g. Amazon, B&N, etc.) have to provide links to Apple's iBookstore as well in their apps?

entwined82 says:

Don't think so, no. They didn't do anything here. Apple was the one who was found to have conspired to fix prices, so it makes sense that only they would be punished.

Pre_WM_or_Android_TOUGH_CHOICE says:

Absolutely... Amazon, B&N, Google, etc will have to allow Apple iBooks to link to the iBookstore on Kindle, Nook, Android, etc. (in otherwords, doesn't make a bit of difference to iBooks)

Oletros says:

Why? Apple doesn't have to provide links from iBooks to other stores

cardfan says:

Apple gambled and lost here by not settling. Now the DOJ is reaching into app store policies as well as other future media negotiations such as video.

This is a good thing for consumers.

Sam Davis2 says:

Your opinion is wrong. Legislating a return to the former baseline of Amazon monopoly is bad for everyone. Do more research on why, i don't have time to educate you myself. Apple didn't settle because they are innocent.

Rob White says:

You should take the time to educate yourself because you are astoundingly wrong. Apple wanted to fight due to their own hubris & some false, wrongheaded need to protect Steve Jobs' legacy. Just read Eddy Cue's testimony where it's all laid out. Oh & the Jobs bio didn't help matters did it? Guilty as charged. The other defendants settled not out of convenience but they realized they got caught. End of story.

It's blind fantasy to pretend Apple was some innocent victim here.

Fumetsu says:

The DOJ case was air tight and Amazon's market position did not give Apple carte Blanche to break the law. There is ample evidence they knew they were breaking the law. Eddie Cue wanted this to be his last gift to a dying Steve Jobs and it harmed consumers.

Apple did not settle out of arrogance and the DOJ called their bluff. Now they have to pay for it and consumers win overall.

Miguel Carvajal says:

I agree with you. I love Apple as a company, their products, and what they stand for. But the deal they made with the publishers only benefited them, not us as consumers, and now they have to pay. For many years I was happy buying inexpensive books and music from Amazon.com until Apple decided to fatten their pockets at our expense.

khobia2 says:

Simply don't trust the government no matter how much they say it will benefit consumers.

Sent from the iMore App

Fumetsu says:

Then elect a different government.

Derrick4Real says:

I sure as hell don't trust the comments section on on tech blogs when it comes to the antitrust law.

richard451 says:

Deal with the devil and you will get burned. Hopefully Cook will learn from this. As for this solution being "ludicrous", it sounds like the author is still stung over the verdict. Apple got off very light and it's stunning the government came up with such an intelligent penalty instead of just issuing a fine.

Carioca32 says:

Exactly. Exchange "Apple" with "Microsoft" and people would be criticizing the government for its leniancy.
Ludicrous are the rules Apple impose on apps like Kindle, which could not access its own bookstore. Customers purchase the iPad but that's not enough, all transactions had to be charged through Apple as well. Two years is too short, this should be permanent.

Etios says:

This is a fair ruling NOT "ludicrous" you apple fanboy.

ltrs says:

Geez, why is this site more concerned with a multi-billion dollar company than it is with consumers of the company's products? Strikes me the same when Imore brags about Apple's outrageous profit margins. Are you shills for Apple, or a legitimate blog?

On this particular issue, Jobs knew very well he was breaking laws when he made this deal. And it caused book prices to go up for everyone. Love my iPad, but I will NEVER buy a book from Apple. Not in a million years.

CORYK333 says:

Reading is fundamental ;)

Derrick4Real says:

"ludicrous?" Why do you think they are ludicrous?