DoJ Wants Apple To Terminate Deals With Publishers, Link To Rival Bookstores Instead

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The ongoing iBooks antitrust case between Apple and the United States Department of Justice took a very interesting twist this morning when the DoJ and 33 state Attorneys General laid out plans to remedy Apple’s wrongdoings and restore competition to the market.

The DoJ wants Apple to terminate all of its deals with book publishers, and refrain from entering into any new ones for at least five years. It also wants the company to start selling e-books from rivals like Amazon and Barnes & Noble.

If the plans are approved by a court, Apple will be forced to cut its ties with Hachette Book Group, HarperCollins Publishers, Macmillan, Penguin, and Simon & Schuster. It would also be stopped from signing new deals to prevent it from competing on price. So where will its books come from?

This is where it gets really painful for Apple. The DoJ wants the Cupertino company to begin selling e-book titles from rival stores, such as Amazon, Barnes & Noble, and Nook. It also wants Apple to allow these companies to link to their own e-book stores from within their iOS apps.

As things currently stand, these companies cannot sell titles on iOS — users must purchase them via the website and then have their purchases synced to their library.

Finally, the DoJ wants Apple to appoint an independent body to ensure its internal antitrust compliance policies are sufficient, and that the company follows them properly to avoid similar mistakes in the future.

The Wall Street Journal reports that these plans are the same as those the DoJ said it would pursue when it first brought its suit against Apple.

“Under the department’s proposed order, Apple’s illegal conduct will cease and Apple and its senior executives will be prevented from conspiring to thwart competition in the future,” said Bill Baer, Assistant Attorney General in charge of the DoJ’s Antitrust Division.

For those who haven’t been keeping up, Apple has been found guilty of conspiring to fix e-book prices with a number of book publishers in an effort to hurt rivals like Amazon. “Apple played a central role in facilitating and executing that conspiracy,” said U.S. District Judge Denise Cote at the end of the trial back in July.

Apple will of course appeal this decision, and it will fight as hard as it can to try to prevent the DoJ’s plans from going into affect. While it may be willing to allow Amazon and others to sell their content inside their own apps on iOS — if it really has to — the company would probably prefer to shut down the iBookstore altogether than link to rival content from there.

But whether Apple will have any success in this battle is unclear at this point. Right now, it doesn’t look good.

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  • aardman

    OMG,B&N/Nook are actually dead man walking so the DoJ is actually trying to open up the field for Amazon. In an industry where there are three major players, DoJ expects to enhance competition by shutting down one of them?

  • Mystakill

    Of course Apple was colluding with the publishers; how else could it have increased its income from the 30% cut of every purchase? If the latter weren’t mandatory, the pricing fixing most likely wouldn’t have occurred, as Apple wouldn’t have had any incentive to suggest the higher prices.

  • Whodakat

    I know I’m a fanboy, but the DOJ has their head up their #$*. Asking Apple to provide a direct way to purchase inside of their apps is BS. How does price fixing = including ways to purchase while not providing Apple the 30% cut they get for running the app store? I don’t see how the two are related. Its Apple’s devices, in Apple’s walled garden. What am I missing?

  • technochick

    So they want to end the iBooks store as anyone more than indie self published titles. How is that helping consumers by keeping fair competition

  • technochick

    Of course Apple was colluding with the publishers; how else could it have increased its income from the 30% cut of every purchase? If the latter weren’t mandatory, the pricing fixing most likely wouldn’t have occurred, as Apple wouldn’t have had any incentive to suggest the higher prices.

    The publishers wanted the higher prices and could have gotten them or killed ebooks with or without Apple. By refusing to renew contracts with Amazon. And then suing when Amazon tried to continue their stunts of removing paper titles from sale.

    The publishers may have colluded among themselves but there was not solid proof that Apple was a part of it or was the leader as claimed. And certainly telling Apple to shut down their store for the next 5 years is not the answer. Customers need choice and ‘Amazon is the only place to buy ebooks because they demand exclusive rights etc’ is not choice

  • technochick

    Seems it may not just be books but all media.

    and I just saw word of a whitehouse petition to stop the DOJ from enforcing this plan.
    http://wh.gov/lr8uW

  • mtwb

    Apple already allows the third party booksellers to sell from their own apps. Those sellers choose not to because of the 30% they would have to pay to Apple.

  • ABNChemo

    Who is John Galt?

  • HerbalEd

    I’m not convinced that Apple did anything illegal. Hardball competitiveness, yes … but that’s the American capitalist system at work.

    However, even if what Apple did was illegal, this punishment is going to cost Apple billions of dollars … a punishment that far outweighs the crime.

    And the irony (farce?) is that by doing this, the DOJ will allow Amazon a near-monopoly on e-books. Very, very stupid … and should send a chill up the spine of any large companies.

About the author

Killian BellKillian Bell is a staff writer based in the U.K. He has an interest in all things tech and also covers Android over at CultofAndroid.com. You can follow him on Twitter via @killianbell.

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