Publishers oppose US feds Apple eBook restrictions

nestor e. arellano

11 years ago

Five major publishers are asking the United States Department of Justice to rethink is recommendations that Apple Inc. be banned from entering anti-competitive eBook distribution contracts for five years.

Last week, the DOJ and 33 U.S. states and territories proposed the ban after U.S. District Judge Denise Cote in July found that Apple (NASDA: AAPL) played a “central role” in a conspiracy with the five publishers to fix eBook prices. The proposal also sought to restrict the technology company from conducting further business arrangements with the involved publishers.

The publishers which include Lagardere SCA’s Hachette Book Group Inc., New Corp.’s HarperCollins Publishers LLC, Pearson Plc.’s Penguin Group (USA) Inc., CBS Corp’s Simon & Schuster Inc., and Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan, however said, the proposed ban will punish them rather than Apple.

They content that such a move would eliminate the so-called “agency model” where publishers, rather than Apple, set the retail price of eBooks.

Regulators had accused Apple of conspiring with publishers to undercut online retail giant Amazon.com Inc.’s (NASDAQ: AMZN) eBook business. This caused the prices of eBooks to rise from the $9.99 Amazon was charging to $12.99 and up to $14.99.

The alleged collusion began in 2009 and continued until 2010 just as Apple was launching its iPad tablet device.

Apple went to trial while the publishers settled with the DOJ by agreeing to begin discounting eBook prices. The discount amounted to more than $166 million.

Last week, Apple filed a motion objecting to the DOJ’s proposal, calling it a “draconian and punitive intrusion.”

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