Trade Resources Industry Views Five Large US Book Publishers Have Openly Objected to New Restrictions Outlined

Five Large US Book Publishers Have Openly Objected to New Restrictions Outlined

Five large US book publishers have openly objected to new restrictions outlined by the US government after Apple was found guilty of conspiring to artificially raise e-book prices.

After having already found Apple to have "conspired to restrain trade" by apparently overseeing a scheme to raise e-book prices across the products of several publishers in spring 2010 - which was around the time of the first iPad's release - the US government now wishes to see Apple end contracts with major publishers for five years.

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The Justice Department also wants to see Apple forbidden from entering new contracts that may also enable the technology firm to compete on price.

Apple would have to hire an internal antitrust compliance officer, as well as an external monitor appointed by a court.

Five large book publishers - including News Corp's HarperCollins, Penguin Random House and CBS Corp's Simon & Schuster - have raised objections to the order, claiming that the measures will "effectively punish" publishers more than Apple.

The five year elimination of contracts with the publishers, they say, won't have any effect on Apple's pricing behaviour internally, and will instead just prevent them from profiting from so-called "agency agreements" with Apple, in which they set the prices and Apple gets commission.

"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 wrote.

The publishers maintain that settlements made with the government as the case with Apple came to an end would allow "agency agreement" behaviour to continue - with limitations - but the new orders against Apple, if they go through, will conflict with the settlements.

Apple was accused of fixing prices on's e-book range in order to fuel sales from its own e-book platform, causing book prices to rise as much as $5 beyond previous prices. Amazon's previous 90 per cent market share in the sector was thus seen to be placed in jeopardy.

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E-Book Publishers Object to US Government Restrictions on Apple Price Fixing