Judge sets final restrictions for Apple on e-books

A federal judge punished Apple for conspiring with publishers on retail prices of e-books.
Shannon Stapleton/Reuters/file
A federal judge punished Apple for conspiring with publishers on retail prices of e-books.

NEW YORK — As punishment for engaging in an e-book price-fixing conspiracy, Apple will be forced to abide by new restrictions on its agreements with publishers and be evaluated by an external “compliance officer” for two years, a federal judge has ruled.

But the judge, Denise L. Cote of US District Court in Manhattan, rejected some measures sought by the Justice Department, including extensive government oversight for Apple’s App Store.

In a filing this week, Cote issued her final ruling on the penalties to be imposed on Apple after the long-running lawsuit against the technology giant filed by the Justice Department in April 2012.


The government accused Apple, along with five major book publishers, of illegally colluding to raise the price of e-books and of trying to curb Amazon’s influence in the publishing industry as Apple prepared to introduce its iPad in 2010.

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All five publishers, Macmillan, HarperCollins, Simon & Schuster, Hachette Book Group, and Penguin Group USA, have since settled, saying that they did nothing wrong. Random House, which was not named in the lawsuit, merged with Penguin earlier this year.

But Apple, with the financial resources to fight in court, went to trial this summer. It defended itself with testimony from a string of high-ranking Apple executives, including Eddy Cue, the company’s senior vice president for Internet software and services, who led the negotiations with publishers.

In July, Cote ruled against Apple in a nonjury trial, saying there was compelling evidence it had violated antitrust laws by conspiring with the publishers.

In her ruling this week, Cote said Apple may not enter into any agreement with the five settling publishers that “restricts, limits, or impedes Apple’s ability to set, alter, or reduce the retail price of any e-book.”


The ruling also said that Apple would be prohibited from discussing with any publisher its contractual negotiations with another publisher.

In addition, Cote ordered that Apple cooperate with an external monitor who will evaluate and report on the company’s training reforms and antitrust compliance.

Apple has said that it will appeal Cote’s July ruling.