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Publishers join Apple in objecting to proposed measures by the DOJ

Following the e-book price-fixing trial, the Department of Justice wants to impose measures on Apple, but publishers say they'll be the ones hurt by the rules.

By Staff Writer / August 8, 2013

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Following the Department of Justice’s suggestion of measures to enforce the court ruling against Apple for conspiring to fix e-book prices, the five major publishers involved have joined Apple in objecting to the proposed rules.

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The publishers – Penguin Random House, HarperCollins, Simon & Schuster, Hachette, and Macmillan – all settled with the DOJ before Apple went on trial. But now the five have filed a statement with a judge protesting the suggested orders, which include, for a period of five years, an injunction against Apple's use of the agency model of pricing (a model which allows publishers, and not retailers, to set prices for e-books).

Such a restriction would hurt the publishers more than it would Apple, say the five. (Only Penguin, not Random House, was involved in the case, but the company now bears the name Penguin Random House now that the two publishers have merged.)

“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,” the publishers stated.

The publishers contend that the proposed measures do not align with the settlement that they themselves made with the DOJ. The terms of that settlement, say the publishers, allow them to use the agency model, with certain restrictions. The publishers say the measures imposed on Apple would stop the company from using the model at all and would hurt the publishers' business.

The department “induced publishers to enter these agreements on the condition that publishers could continue to use the agency model,” the publishers wrote.

However, Department of Justice spokesperson Gina Talamona said the measures would merely stop Apple from making agreements that would stop price competition for e-books during a certain amount of time.

“The proposed relief does not modify the terms of the settlements we reached with the publisher defendants,” she told the Associated Press

In addition to its other measures, the Department of Justice suggested that Apple be required to put links to Amazon and Barnes & Noble in its store so consumers can compare prices.

Apple had already spoken out against the DOJ’s suggestions, calling them “a draconian and punitive intrusion into Apple's business, wildly out of proportion to any adjudicated wrongdoing or potential harm.”

Meanwhile, Washington Post writer Brian Fung wondered if Apple might come out ahead despite the verdict against it.

“By introducing the agency model, Apple had begun to chip away at rival Amazon’s e-book business, which relied on a traditional wholesale relationship with the publishers,” Fung wrote. “Amazon’s market share has gradually slipped over time, to the point where Apple’s iBookstore now controls 20 percent of the e-book market.” Fung also said that he thinks Apple has a good chance of appealing the DOJ decision.

The court will decide on Aug. 9 whether the measures will be imposed.

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