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On Wednesday, the five largest book publishers in the US filed a motion in the US District Court in Manhattan, objecting to a proposed final order against Apple. The publishers submitted that the restrictions proposed by the DOJ on Apple would prevent Apple from entering agreements that prevent it, or limit it from giving discounts on books.
The publishers, including Hachette Book Group Inc, HarperCollins Publishers LLC, Penguin Random House LLC, CBS Corp’s Simon & Schuster Inc and Verlargsgruppe Georg von Holtzbrinck GmbH’s Macmillan, argued that the provisions proposed by the DOJ for imposing on Apple would result in the publishers being punished.
The publishers have already settled with the federal government and many states, paying a total of $166 million for the benefits of e-Book purchasers. However, the new restrictions on Apple would punish the publishers twice over.
The motion observed, “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.â€
On Friday, a hearing is scheduled to decide the adoption of the remedies proposed by the Department of Justice and 33 US states and territories, after Apple was held guilty of conspiring to fix the price of e-Books, by a federal court last month.
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The DOJ has proposed as punitive measures that Apple terminate its contracts with the five publishers, who have already settled, and for the next five years, it cannot enter into contracts which according to the DOJ would prevent Apple from competing on price. There would also be a court-appointed monitor to watch Apple’s behavior, and Apple would have to hire an antitrust compliance officer to conform to the order’s provisions.
The publishers say that by preventing Apple from entering into contracts with third parties, where third parties may restrict Apple from giving discounts – in reality, it’s the publishers who are being punished, because it is not going to change Apple’s pricing behavior to any extent.
Thus the proposals of the DOJ actually conflict with the terms of the settlements with the five publishers, as those settlements allowed them to enter into agency deals with retailers if maintaining certain restrictions.
