Judge prevents Apple from setting prices with e-book partners (Update: Apple to appeal)
Well Apple's ongoing saga with the DOJ has finally come to an end*. Judge Denise Cote today laid out her punishment for Apple after finding that the company had indeed colluded with a number of publishing companies to collectively raise the price of e-books.
Specifically, Cote issued an injunction which effectively precludes Apple from including a "most favored nation clause" in any contract it strikes with publishers for a period of five years. Previously, that "most favored nation clause" in Apple's contracts ensured that no other book retailer would be able to price e-books below Apple.
While Apple can't be happy about that, it is undoubtedly breathing a sigh of relief after Cote chose not to follow the DOJ's recommendation that Apple be forced to change the manner in which it operates in-app purchases. The DOJ previously proposed that competitors like Amazon be allowed to include links within their own iOS apps that would whisk users away from the App Store in order to make purchases, thereby avoiding having to pay Apple a 30 percent cut.
Indeed, Cote previously noted that she wants Apple's "injunction to rest as lightly as possible on how Apple runs its business."
Returning back to Apple's punishment, Cote also ruled that Apple would have to stagger future contract negotiations with the publishers involved.
Further, Apple will be subject to a court-appointed external monitor who will keep an eye on Apple's activities to ensure that they don't run afoul of antitrust laws going forward. Apple will also be subject to an annual antitrust compliance audit.
*Update: Apple will appeal.
Engadget also adds:
The full ruling from Judge Cote can be read in its entirety below:
The final injunction prevents Apple from setting prices with any of its partners for terms of between two and four years, with the exact term depending on which publisher it's working with and how long they originally took to settle with the DoJ -- which means Apple's relationship with Macmillan faces the harshest restriction.
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