Justice Department’s Recommendation for Apple’s Conspiracy with Publishers-Open the Apps Store to Competitors

Apple-iPhone-5-white1

On Friday, the Justice Department recommended opening up Apple’s apps stores to competitors in the wake of the conspiracy between Apple and five publishers.

If Apple is forced to conform to the recommendation by the Justice Department, it will change the way Apple operates.  Presently Apple users of iphones and ipads cannot use e-books from Amazon Kindle and Barnes and Noble Nook apps, but if DOJ gets its way the practice that is now blocked will become open to Kindle and Barns and Noble Nook apps.

The DOJ has also proposed Apple abandon engaging in deals with five publishers in which Apple is accused of fixing the prices of e-books. It is also trying to block Apple from engaging in any similar agreements with suppliers of music, movies, television shows or other content that may increase the costs the competitors may sell the content.

To ensure Apple complies, a court appointed monitor will ensure the remedies are adhered to.

On Friday Apple officials fought back saying that the remedies prescribed by the court were too extreme.  The company has promised to appeal the July decision in the U.S. District Court of the Southern District of New York, who initially made the guilty finding of conspiring with book publishers to set new prices for e-books.

According to the prosecutors, Apple’s plan was constructed to force its competitor, Amazon, to raise its prices. As a result, Amazon’s typical price of $9.99 for a best-seller rose to $12.99 or $14.99 after the launch of the iPad.

While the publishers that conspired with Apple have already settled with the federal government, experts believe Apple will take the case to U. S. Supreme Court.

According to the courts findings, Apple encouraged the Publishers to set the prices of e-books instead of allowing the retailers to determine the costs.  As a result Amazon had to raise the prices of their products when the ipad was launched.

Apple is determined to fight back because the government’s suggestions has the potential to hurt the itunes store where 10 percent of Apple’s revenue comes from.  Apple has continuously sought out deals with records labels and Hollywood studios in order to compete.

“The court found that Apple’s illegal conduct deprived consumers of the benefits of e-book price competition and forced them to pay substantially higher prices,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.

Under the courts recommendations Apple will discontinue its present course and executives of the company will be prevented from hindering future competition.

Further recommendations suggest Apple offer links to other e-book retailers like Amazon and Barnes & Noble for two years, so consumers who buy e-books on their iPads and iPhones can compare Apple’s prices with those of its competitors.

Regulators believe if Apple follow the recommendations, competition will be reset to where it was before the conspiracy.

The publishers who were a part of the conspiracy settled with the federal government: Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, , Penguin Group (USA) Inc. and Simon & Schuster.

Apple claim that it has not done anything wrong. Apple has vowed to fight these recommendations.

By: Veverly Edwards

Source 1

Source 2

Leave a Reply

Your email address will not be published.