Justice Sets April 19 Deadline for Final Judgment in E-Books Case
The Justice Department said it will seek to enter its proposed settlement with Penguin in the government’s e-book pricing antitrust case before April 19. In a filing with the U.S. District Court, New York, Friday, Justice lawyers reiterated the government’s case for why the court should adopt the proposed settlement despite alleged shortcomings identified by three parties who filed public comments on the settlement.
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The proposed final judgment will probably lead to lower e-book prices on many Penguin titles based on reported reductions made by other publishers whose settlements were already approved by the court, the Justice filing said (http://1.usa.gov/Xu0qAG). The settlement requires Penguin to end its Apple Agency Agreement -- the agreement the government said gave publishers unlawful control over e-book pricing -- within a week of the court’s approving it. Penguin representatives didn’t immediately respond to our query.
Three separate parties responded to Justice’s solicitation for public comment on its proposed final judgment -- RoyaltyShare CEO Bob Kohn (http://1.usa.gov/YAKlI0), the National Association of College Stores (NACS) (http://1.usa.gov/10BTEFi) and Steerads, an online ad optimizing firm (http://1.usa.gov/10DbTux). Kohn argued that Penguin’s conduct was legal and that the government should revise its proposed settlement to eliminate the restrictions placed on publishers’ use of the agency model that troubled Justice. He also argued that the recently proposed settlement with Macmillan, reached in February, should be similarly revised.
In its comments, NACS said the proposed final judgment needs to be clarified to expressly exclude textbooks. “Penguin’s family of companies (including Pearson Education and possibly other parent and sister companies) are major players in the e-textbook market, and the proposed Judgment threatens to constrain those companies’ ability to sell e-textbooks,” the association said. “Similarly, the agreement hamper’s [sic] any other publisher or retailer (including NACS members) from exploring with Penguin and its related entities emerging opportunities in the nascent e-textbook market,” it said. Steerads said the relief sought in the proposed judgment isn’t enough because it has no prima facie effect in any subsequent private lawsuit that may be brought against the defendants. It said the proposed final judgment should be revised to include a waiver of the statutory limitation in the Antitrust Procedures and Penalties Act, also known as an “asphalt clause.” Steerads has made similar requests in FTC privacy settlements (WID March 20 p8).
Justice dismissed all the concerns raised by those three parties. The exclusion of e-textbooks sought by NASC is unnecessary because “none of the Penguin entities subject to the proposed Final Judgment publish e-textbooks,” it said. “The United States continues to believe that the proposed Penguin Final Judgment, as drafted, provides an effective and appropriate remedy for the antitrust violations alleged in the Complaint and that it is therefore in the public interest.”