Government pressures to let Amazon and others link to e-books within their iOS apps

The U.S. government Friday offered a proposal to settle an e-book price-fixing case which the technology giantrecently lost. Among the requirements: end current acy agreements with the publishers involved, allow Amazon and others to provide external links to e-books within their iOS apps and institute a five-yr probation from signing any new e-book distribution dls.The proposed“remedy”offered by the US Department of Justice, while imposing some restrictions on , could bypass potential fines reportedly nr $500 million…“Under the department’s proposed order, ’s illegal conduct will cse and and its senior executives will be prevented from conspiring to thwart competition in the future,” said Bill Baer, Assistant Attorney eral lding the DOJ’s Antitrust Division, in thegovernment’s statement.Ending acy agreements is also a boon for Amazon, which employs so-called wholesale model where the online retailer sets the e-book prices themselves and has a virtual monopoly on the amount of fees paid to publishers.Under ’s acy agreement used throughout iTunes, iBookstore publishers set the prices themselves, with taking its customary 30 percent cut on all proceeds. This has resulted in slightly higher-price e-books on the iBookstore, but also grter revenues for publishers.AsGigaOmnotes:While it’s slightly unclr from this language, it sounds as if the government wants to force to allow in-app purchasing, at lst on ebook apps, without taking its customary 30 percent commission.(We’ve checked with the DOJ for clarifiion.) The proposal is likely to rile because the company does not currently allow app makers to direct customers to external “shops.”In July, U.S. District Court Judge Denise Cotefound conspiredwith publishers to hike the price of e-books in an attempt to harm rival Amazon. In her ruling, Cote said “played a central role”in the conspiracy.The e-book publishers involved had all settled with the government, lving the lone holdout.The government alleged that in 2010, just prior to unveiling the iPad, conspired with five of the six e-book publishers, essentially raising prices above Amazon’s lower amount, in an effort to brk the online retailer’s lock on e-book sales.Before the case went to court, Simon & Schuster, Hachette Book Group, HarperCollins, MacMillan and Penguin rched settlements ranging from $12 million to $75 million.Perhaps the most onerous requirements in today’s proposed settlement are the request to end contracts with the 5 publishers, not sign any new e-book contracts for five yrs and allow e-book retailers to sell titles within their iOS apps. rlier had forced Amazon to drop a built-in store from its Kindle iOS app.The government acy would also require to pay for a third-party compliance r to train executives and ensure the remedy’s orders are carried out.