In July, a federal judge found Apple guilty of conspiring with book publishers to raise the retail prices of ebooks when it launched the iBookstore. The judge has today followed up on that decision with an injunction that prohibits Apple from entering into “most-favored-nation” (MFN) agreements with publishers.
Under the terms of the MFN agreement, Apple ensured that publishers never discount their ebook prices lower than the price on the iBookstore. With Apple not in controlling position anymore when it comes to ebook pricing, the court can expect prices to come down.
Judge Cote’s injunction forbids Apple from enforcing most-favored-nation clauses in any ebook publishing contracts for five years, and also forbids the company from entering into any book publishing contracts that contain them for five years. Apple had wanted this provision to be less broad, relating only to MFN clauses with the five publishers in the case who have already settled. Instead, it applies to all publishers.
Even with this injunction, Apple got away lightly, since the DOJ originally wanted to change the way Apple implemented its IAP restrictions, letting Amazon and other retailers link to their online stores from their respective apps.
The judge has also appointed an external monitor to keep reviewing Apple’s “antitrust compliance policies, procedures and training for two years.”
Apple, on its part, says that the company didn’t conspire with publishers, and plans to appeal:
“Apple did not conspire to fix ebook pricing,” company spokesman Tom Neumayr said in a statement. “The iBookstore gave customers more choice and injected much needed innovation and competition into the market. Apple will pursue an appeal of the injunction.”
You can read the whole injunction document on Scribd.