DOJ floats Apple ebook price fixing remedies

DOJ floats Apple ebook price fixing remedies

Summary: The U.S. government has submitted proposals for Apple to remedy antitrust concerns, after a Manhattan court found the technology giant guilty of conspiring to fix ebook prices.

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TOPICS: Apple
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(Image: CNET)

Apple was found last month in July to have violated antitrust law by conspiring to fix ebook prices in conjunction with five publishers. 

Now the U.S. Justice Department (DOJ) is proposing measures to prevent Apple "from conspiring to thwart competition in the future," according to the head of the government department's antitrust division.

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Apple violated antitrust law in ebook price fixing conspiracy

Apple violated antitrust law in ebook price fixing conspiracy

In breach of U.S. federal antitrust law, Apple and five other publishers conspired to fix and raise ebook prices in order to undercut Amazon's dominant position in the market.

Apple was found to have colluded with Hachette Book Group Inc., Macmillan, News Corp.'s HarperCollins, Pearson Plc., Penguin Group, and Simon & Schuster (which is owned by CBS Corp., the parent company of ZDNet), which all settled with the U.S. government earlier this year.

Despite Apple's continued claims that it "did not conspire to fix ebook pricing," the Justice Department said it was a "victory for millions" of ebook readers.

Apple said it will appeal the decision.

The DOJ and 33 state attorneys-general requested in a court submission that contracts between Apple and the five named ebook publishers are nullified and re-signed to specifically prevent Apple from competing on price with rivals and other ebook providers, reports the AP.

The regulators would also like to see links between Apple and other ebook providers, such as Barnes & Noble and Amazon, to make it easier for consumers to compare prices.

According to sister site CNET's Joan Solsman, the move would be a "win" for Apple's competitors by making it easier for consumers to buy books on their iPhones or iPads.

Among the other measures, the DOJ suggests that Apple could be monitored by an external unit, paid for by Apple, to oversee the company's internal antitrust compliance policies.

A hearing to discuss remedies will be held on August 9. Another trial is yet to be scheduled on damages. 

Topic: Apple

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  • So nice to see justice

    This is only the first of many anti-trust violations of which apple will be found guilty.

    apple: a guilty, convicted, anti-trust market manipulator.
    toddbottom3
    • Why do you care?

      It's obvious someone as dense and sad as you doesn't even read books.
      new gawker
    • What other anti-trust violations do you think they will be found guilty of?

      Its always interesting to see what you are thinking...
      yoshipod
      • iTunes

        Or, more precisely, iTMS. apple has a monopoly here and has abused it for books, musics, videos, and apps. They've just been punished for books. I'd like to see the DoJ expand their lawsuit to cover the rest of iTMS.

        Also the mobile browser. apple has a monopoly on mobile browsing (as apple fans are always so quick to point out). Since apple does not allow anything other than the Safari rendering engine and JavaScript interpreter, this is anti competitive. It would be far better for the consumer if, when they first power on an ios device, it takes the user through 3-5 ballot boxes where you can pick your bookstore, music store, search engine, browser, etc. This would improve competition and benefit consumers.
        toddbottom3
        • In what Market does Apple have a Monopoly?

          As you love to point out, Windows has the largest share of the Desktop OS market, Android has the largest share of the Smart Phone Market, and now according to some reports also has the largest share of the tablet market.

          So, how can Apple have a monopoly?
          yoshipod
          • Think about it for just 1 second

            apple HAS been found guilty and convicted of anti-trust violations.

            Clearly apple either has a monopoly or, if you knew anything about anti-trust violations, you would realize that you don't need a monopoly, you just need market power.

            Want to go on the record as stating that apple has no market power?
            toddbottom3
          • Lets see what is out there

            Music Stores: Google, Amazon, Microsoft, Samsung, etc.

            Book Stores: Google, Amazon, Microsoft, Samsung, etc.

            Video Stores: Google, Amazon, Microsoft, Samsung, etc.

            App Stores: Google, Amazon, Microsoft, Samsung, etc.

            Seems like there is a vibrant market place for everything you listed.

            But your idea is interesting.

            I think you would agree that since Microsoft controls 90%+ of the desktop OS market, they should have a ballot when you first run Windows that lists all the above sources and lets the user choose which one(s) they want.

            They should also be forced to allow other browsers run in the desktop mode in WindowsRT as well.

            After all they have been found guilty and convicted of anti-trust violations in Europe.

            By the way how many different stores are allowed to sell apps to users of Windows Phone, RT, or Windows 8 in the Metro environment?

            Not just Anti-trust, but also abusing a Monopoly!
            yoshipod
          • Again, you completely miss the point

            Choices in the market aren't important. I could list of many alternative desktop OSs in the 90s yet that clearly didn't matter.

            apple dominates the music, video, and app store markets, therefore they are a candidate for anti-trust punishment.

            But since you are so convinced that apple can't be guilty of any anti-trust violations, why don't you tell that to the judge that convicted apple of, what was it again? Oh yeah, anti-trust violations. Hmm, should I believe your knowledge of the law or the judge's?

            apple is a convicted anti-trust violator. They manipulate markets to the detriment of the consumer. This is just the beginning. I'm very excited at the prospect of apple losing anti-trust case after anti-trust case.

            I'm fine with MS having a ballot box as long as apple has a ballot box too. That seems fair to me. Glad we can agree on that one.

            As for all your other rambling, sure I'm fine with all of that too.

            Glad that you think, as do I, that apple should be opened right up, that they need to prompt the user at the beginning for all the stores and browsers and providers that they want, and that apple cannot restrict users in the way they are currently restricting users for the sole purpose of punishing those with less market power.

            Well, I did not expect for you to agree with me on this one. Excellent.
            toddbottom3
          • Choices

            Tell me, how do I run Google's Play Store on iOS devices? (If I have App Store choices).
            BorgX
          • But here is a good start for a monopoly

            http://www.tabletpcreview.com/default.asp?newsID=4325

            "Apple iPad Dominates Tablet Web Traffic with 84% Share"

            http://www.idownloadblog.com/2013/06/21/asymco-itunes-75-percent-digital-music-sales/

            "Apple’s iTunes owns 75% of digital music sales"

            http://pandodaily.com/2013/08/02/how-apple-could-destroy-spotify-mog-pandora-and-the-rest/

            apple has the power. These are all monopoly levels. Even the most ardent apple fanboy has to admit that with these numbers, apple has a stranglehold on those markets. That's all any anti-trust agency needs to go after apple. Clearly, as they did it with ebooks.

            ebooks are actually a great example because apple had ZERO % ebook marketshare when they committed the crimes they were just convicted of. What apple can do, and has done (as determined by a court of law) is that they have used their monopoly powers in other markets to push their way into markets where they had no presence. This is illegal.

            Clearly then, since apple was convicted of anti-trust violations in the ebook market while having 0% of that market, your insistence that apple have a monopoly is clearly a flawed argument. Judges with FAR more knowledge of the law have said you are wrong.
            toddbottom3
          • So you agree that MS should be targeted for anti-trust

            Windows with 91.66% marketshare

            http://www.netmarketshare.com/operating-system-market-share.aspx?qprid=8&qpcustomd=0

            "Microsoft Office currently predominates in terms of on-premises use, with about 80 percent to 96 percent user share, according to Gartner. "

            http://rcpmag.com/articles/2013/04/23/google-apps-vs-microsoft-office.aspx

            Microsoft has the power. These are all monopoly levels. Even the most ardent MS fanboy has to admit that with these numbers, MS has a stranglehold on those markets. That's all any anti-trust agency needs to go after MS. Clearly, as they did it with browsers.
            yoshipod
          • But they DID go after Microsoft

            You are just digging yourself deeper and deeper.

            DoJ should continue going after apple, convicting them again and again and again of all the anti-trust violations that apple is committing.

            Again, so glad we can agree on this one.
            toddbottom3
          • But they DID go after Apple

            You are just digging yourself deeper and deeper.

            DoJ should continue going after MS, convicting them again and again and again of all the anti-trust violations that MS is committing.

            Again, so glad we can agree on this one.
            yoshipod
      • DoJ needs to break apple up into 5 or 6 companies

        1. a media company (books, music, video)
        2. an app store curator
        3. a smartphone designer
        4. a tablet designer
        5. a computer designer
        toddbottom3
    • Why are you not banned?

      How is it someone who's only purpose on this site it to find apple related articles then proceed to troll them still allowed to be here?
      new gawker
      • Oh come now

        Just don't feed him.

        But in truth most advertising revenue driven web sites like ZDNET tolerate or actually encourage trolls because they drive up page hits. I mean you will only read the article once but on some more colorful discussions you may comeback a dozen times to see how the flame war is panning out.
        oncall
        • Bingo!

          Most people come to this site to either start flame wars or to intensify them. I am willing to bet that most people don't even read the article and jump straight to the comments section.
          statuskwo5
  • Injustice

    I am as big a Windows fanboy as anyone, but what is happening to Apple here is a massive injustice. The anti-trust laws are non-objective and ex post facto. All businesses have the right to produce products as they choose and charge whatever prices the market will bear. The original anti-trust case against Microsoft had no place under rule-of-law, and neither does this ridiculous case against Apple. Repeal of the anti-trust laws is the answer.
    FDanconia
    • Re: and charge whatever prices the market will bear

      But if the market is not free and competitive, then it is not a market, it is a racket.

      What you're advocating is called "mercantilism". What we have is called "capitalism".
      ldo17
  • Opposing Viewpoints.

    While it is good to see the DOJ deal with Apple lobbyists in such an Elliott Ness way,
    there is another viewpoint.

    First the philosophy 101 question?

    How long will the DARPA NETWORK last and who really owns the rights to 'e books'
    stored on the cloud and on proprietary device(s).

    After this anxiety, a print backup starts to look quite attractive.

    Now the 'nitty gritty' argument.

    Electronic File prices should definitely be raised by a factor of ten so that there
    will be a company or two around to sell me books in thirty years.
    gaelicsoftwarecorporation