The judge overseeing Apple's ebook price-fixing case said this week that she will not allow the US Department of Justice (DOJ) to broadly oversee the electronics giant's business practices but will instead limit the remedy to ebooks. However, she also slapped down Apple for being unrepentant and okayed the appointment of an external antitrust monitor who will ensure that the firm halts its anticompetitive practices.
Apple was found guilty last month of coercing the world's five biggest book publishers to collude together to dramatically raise their prices on ebooks in order to harm Amazon and ease its own entry into the market with iBooks. Since then, the DOJ has pressed to establish broad oversight over Apple's entire product line, and not just ebooks, to rein in its anticompetitive business practices. But US District Court Judge Denise Cote on Tuesday rejected this plan.
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"I want this injunction to rest as lightly as possible on the way Apple runs its business," Judge Cote said, dismissing the DOJ request. She also struck down a request that would require Apple to let other ebook sellers, like Amazon, provide links to their own ebook stores from within apps that run on Apple devices such as the iPad. This step, she said, was "unnecessary."
The DOJ originally hoped to oversee Apple's business for 10 years, but after sharp complaints from Apple it reduced the oversight period to 5 years with the possibility of multiple one-year extensions. At Judge Cote's request, the DOJ has also asked that Apple stagger its dealings with book publishers going forward to ensure that there is no more collusion between the firms.
Apple, which says it will appeal the guilty verdict, has rigorously attacked all of the remedies proposed so far by the DOJ. But Judge Cote told Apple lawyers Tuesday that the firm had clearly not learned anything from its antitrust conviction and that she will "reluctantly" allow the DOJ to appoint an external antitrust monitor to keep the company in line going forward. This monitor will force everyone in the affected business unit at Apple, including senior executives like Eddy Cue, to complete antitrust training classes.
"I am hopeful that Apple will bring its culture of excellence and exceptionalism to this task," Judge Cote said. “I trust it will make a sincere commitment to reform its culture" (a statement that makes it unclear whether Apple's culture is excellent or in need of reform).
Judge Cote has asked both the DOJ and Apple to work together on a proposed set of reforms that she can issue as a ruling next week. But given how far apart the two are on these reforms, it's unclear how Judge Cote can meet this schedule.