Apple Inc. (AAPL) To Terminate e-Book Deals, Undergo External Monitoring


Apple Inc. (NASDAQ:AAPL) is facing a new challenge after losing its legal battle in connection with its e-book price fixing case. On Friday, the Department of Justice (DOJ) submitted a proposal to the court to prevent the tech giant from practicing anti-competitive activities across all contents including movies, music, and television shows that are available for sale on the iTunes store.

Apple Inc. (AAPL) To Terminate e-Book Deals, Undergo External Monitoring

Apple has sufficient antitrust policies

The Department of Justice requested the court to appoint an external monitor to ensure that Apple Inc. (NASDAQ:AAPL) has sufficient internal antitrust compliance policies to easily detect any anti-competitive practice.

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Under the proposal, Apple Inc. (NASDAQ:AAPL) will be required to hire and work with an internal antitrust compliance officer who will report exclusively to the outside directors of the company’s audit committee. The tech giant will pay the compensation and expenses of the antitrust compliance officer who will train the senior executives and other employees of the company about antitrust laws, and make sure that Apple Inc. (NASDAQ:AAPL) will follow the relief order of the court.

Court to terminate publishing contract

In addition, the Department of Justice seek the approval of the court to compel Apple Inc. (NASDAQ:AAPL) to terminate its existing contracts with the five major publishers that conspire with the company in fixing the prices of e-books including Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC, Penguin Group (USA) Inc. and Simon & Schuster Inc.

The DOJ also want Apple Inc. (NASDAQ:AAPL) not to enter a new e-book distribution agreement for five years. Furthermore, the agency requested the court to prohibit Apple Inc. (NASDAQ:AAPL) from entering a contract with suppliers of e-books, music, movies, television shows or other content that will likely increase prices.

Moreover, the agency proposed that the tech giant should allow other e-book retailers such as, Inc. (NASDAQ:AMZN) and Barnes & Noble, Inc. (NYSE:BKS) to provide links from  their e-book apps to their e-book stores so that consumers would be able to easily compare prices, purchase, and read e-books on their iPad and iPhones.

“Under the department’s proposed order, Apple Inc. (NASDAQ:AAPL)’s illegal conduct will cease and Apple Inc. (NASDAQ:AAPL) and its senior executives will be prevented from conspiring to thwart competition in the future,” according to Bill Baer, assistant attorney general of the Antitrust Division of the DOJ.

Last month, U.S. District Judge Denise Cote ruled that Apple Inc. (NASDAQ:AAPL) was guilty of conspiracy to fix the prices of e-books in the United States. The tech giant vowed to appeal the decision of the court.