DOJ Proposes Barring Apple E-Book Deals for 5 Years

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By Todd Wasserman2013-08-02 17:23:37 UTC

The Department of Justice and 33 attorneys general handed Apple a series of proposals on Friday to make amends for e-book price fixing.

Chief among the recommendations is a five-year ban on making new e-book distribution contracts with five major publishers: Hachette Book Group; HarperCollins Publishers; Holtzbrinck Publishers, which does business as Macmillan; Penguin Group (USA); and Simon & Schuster.

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In addition, for two years, Apple would be required to let e-book rival retailers like Amazon and Barnes & Noble provide links to their stores within iPad and iPhone apps, "allowing consumers who purchase and read e-books on their iPads and iPhones to easily compare Apple’s prices with those of its competitors."

The group would also like to prohibit Apple from making deals with suppliers of e-books, music, movies, TV shows and other entertainment content that are "likely to increase the prices at which Apple’s competitor retailers may sell that content" — in other words, price-fixing.

The DOJ announced its recommendations after a New York district judge found Apple guilty of conspiring to raise the retail prices of e-books with publishers and violating antitrust and state laws. Apple was accused of with working with the five publishers to raise the prices of new releases and bestsellers from Amazon's established $9.99 price limit to between $12.99 and $14.99.

The negotiations took place in the two months leading into the launch of the iPad and iBookstore in January 2010 and caused the prices of some e-books to double in the first half of the year, U.S. District Judge Denise Cote said.

A hearing on the proposals will be held on Aug. 9.

Apple investors seemed to shrug off the news; in early afternoon trading, the company's stock was slightly up.

Image: Robert Michael/Getty Images

Topics: amazon, apple, ebooks, iPad, iPhone