Apple ordered to change ‘most favored’ e-book contracts

[kennyc]

Apple ordered to change ‘most favored’ e-book contracts

By Cecilia Kang, Updated: Friday, September 6, 9:19 AM E-mail the writer
A federal judge on Friday ordered Apple to alter its contracts with e-books publishers to ensure price competition, in a closely watched decision that could ripple across Internet commerce for videos, music and other media.

U.S. District Court Judge Denise Cote issued a permanent injunction against Apple, forcing the company to alter contracts that contain “most favored nation” clauses, or preferred treatment that give the iPad maker the ability to control prices offered to competitors.

The judge barred Apple for five years from entering any new agreements with such favorable terms that would prevent retail ebooks prices from dropping. She also ordered an outside auditor to monitor the company’s compliance with her order for two years.

In July, Cote, of the U.S. District Court of the Southern District of New York, ruled that Apple conspired with publishers Hachette Book Group, HarperCollins, Macmillan, Penguin and Simon & Schuster to lift prices of e-books.
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http://www.washingtonpost.com/busine...f2c_story.html

Other Links:
http://www.pcworld.com/article/20482...ook-deals.html

Cnet:

Judge orders Apple e-books monitor to prevent 'further misconduct'
An external monitor will be in place for two years to ensure that Apple complies with the court's orders. But the judge excluded other remedies the government had suggested.
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http://news.cnet.com/8301-13579_3-57...er-misconduct/

[Barcey]

I'm glad that she kept the requirement for an external monitor and it says that it can be extended beyond the two years. Trusting Apple to self comply would have been a joke.

I'm not surprised she excluded the other remedies. Now hopefully the financial penalties will be severe enough to discourage future illegal activities.

[pwalker8]

It will be interesting to see how the appeal goes. I would expect to see the injunction lifted fairly quickly by the appellate court.

[jgaiser]

Originally Posted by pwalker8

It will be interesting to see how the appeal goes. I would expect to see the injunction lifted fairly quickly by the appellate court.

Want to bet? Since an appeal will only look at procedural errors and we have a Judge who went out of her way to document her findings, *I* think that Apple will have to live with the results.

[SeaKing]

I hope this process is painful enough to make Apple reconsider their arrogant way of business and become more like they advertise they are.

A customers friend.

[doctorow]

The whole lawsuit has been dragging on for so long, and with Apple to appeal, I don't see an end to it.

[Apache]

Originally Posted by SeaKing

I hope this process is painful enough to make Apple reconsider their arrogant way of business and become more like they advertise they are.

A customers friend.

Apache

[pwalker8]

Originally Posted by jgaiser

Want to bet? Since an appeal will only look at procedural errors and we have a Judge who went out of her way to document her findings, *I* think that Apple will have to live with the results.

Judge Cote has been overturned numerous times, including just a week or two ago. Going out of her way to document her findings may sound like a big deal, but it could also make it more likely that she will be overturned if her legal rational is found in error. Judge Cote is noted for detailed findings and it hasn't stopped her from being overturned in the past.

Also, I said injunction, not ruling. Injunctions are frequently set aside pending appeal. Judge Cote may even do so herself, it's not all that uncommon for a judge to set aside his or her injunction pending appeal. Basically all you have to show is that the injunction would cause injury and that there is a chance that the appeal will succeed. Given that Judge Cote's ruling is based on a rather novel legal theory, that has never been applied before, I think that lifting the injunction pending appeal is very likely.

[kennyc]

More from this. Federal judge upholds Apple's 30% take on in-app e-book sales:

http://www.computerworld.com/s/artic...p_e_book_sales

[pwalker8]

One thing to note is that Apple can't actually appeal until Judge Cote finalizes her decision. This is going to drag on for a while.

[holymadness]

Huh. And here I was, labouring under the belief of our local doomsday prophet fjtorres, that the DoJ's demands would only be the starting point for horrendous, unimaginably harsh penalties against Apple.