Apple can keep 30 percent cut on sales, injunction in DOJ ebooks case confirms

By , Sep 6, 2013

iBooks 3.0 (image 001)

Like a prisoner on Death Row, Apple has delayed its penalty for weeks, offering up objection after objection to a proposed Department of Justice ebook antitrust settlement. Friday, federal judge Denise Cote issued an injunction, giving federal lawyers much of what they wanted.

Among the prohibitions against Apple: a five-year ban on so-called ‘most-favored-nation’ clauses in publisher contracts that would prevent ebook sellers from using rival services, such as Amazon. Also part of the penalty package was a requirement that Apple stagger contract negotiations with the five publishers that had already settled…

Apple immediately announced it would appeal the injunction. “Apple did not conspire to fix ebook pricing,” spokesman Tom Neumayr said in a statement via GigaOM.

“The iBookstore gave customers more choice and injected much needed innovation and competition into the market,” Neumayr added. In July Cote ruled that Apple had conspired with five publishers to fix ebook prices aimed at hurting Amazon.

For the DOJ, today’s ruling “reinforces the victory the department has won for consumers,” said assistant antitrust attorney Bill Baer.

While the government wanted Apple to allow rival ebook sellers, such as Amazon, to avoid paying Apple 30 percent of purchases made via App Store apps, Cote’s final decision omitted any such changes. The move is seen as a small victory for Apple’s ability to maintain control of its App Store revenue.

Another element of the penalty package some see as a win for Apple, is the court’s decision to created an External Compliance Monitor. While the DOJ originally asked for an internal monitor to watch all aspects of potential antitrust behavior, the court Friday limited the monitoring to ensuring today’s order is complied with.

Additionally, Apple will be able to suggest candidates for the external monitor, although the court will have the final say.

In the end, according to AllThingsD, the injunction wasn’t a death knell for Apple’s ebook efforts, nor the wall-to-wall monitoring the DOJ asked for, turning the court into an honest broker. However, don’t expect Apple not to nibble around the edges, trying to get the best deal possible.

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  • https://twitter.com/MrElectrifyer MrElectrifyer

    At least e-book prices would reduce again…

  • FOFF

    hmm sounds like apple gave lots of folks a cut to get that ruling… j/k