From The New York Times:
A federal judge on Thursday approved a settlement with three major publishers in a civil antitrust case brought by the Department of Justice over collusion in e-book pricing, paving the way for a war over the cost of digital books in the coming months.
Denise L. Cote, the federal judge in Manhattan who is overseeing the case, rejected arguments against the settlement, saying they were “insufficient” to deny its approval.
. . . .
Three publishers — Hachette Book Group, Simon & Schuster and HarperCollins – agreed to settle with the government, while Penguin Group USA, Macmillan and Apple declined to settle. They face a trial next summer.
The settlement approved on Thursday called for the publishers to end their contracts with Apple within one week. The publishers must also terminate contracts with e-book retailers that contain restrictions on the retailer’s ability to set the price of an e-book or contain a so-called “most favored nation” clause, which says that no other retailer is allowed to sell e-books for a lower price.
. . . .
“The Government reasonably describes these time-limited provisions as providing a “cooling- off period” for the e-books industry that will allow it to return to a competitive state free from the impact of defendants’ collusive behavior,” the court said in a filing on Thursday. “The time limits on these provisions suggest that they will not unduly dictate the ultimate contours of competition within the e-books industry as it develops over time.”
Amazon, which in April called the settlement “a big win for Kindle owners,” has vowed to drop prices on its e-books, probably to the $9.99 point that it once preferred for most bestsellers and newly released e-books.
Link to the rest at New York Times and thanks to William for the tip.
Publishers Weekly, reflecting the attitude of Big Publishing, calls this a “stunning development.” PG thinks it’s straightforward antitrust law.
The big players in an industry can’t get together in an expensive New York restaurant or anywhere else to set prices on their products and plan ways to force all retailers to abide by their pricing. There was nothing subtle or sophisticated about this conspiracy. This was a bush-league play by some immensely clueless executives.
As for Apple, PG thinks this was Jobsian hubris reflective of Steve’s final illness. No organization constitutes a more implacable nemesis than The Department of Justice. Ask Microsoft and IBM.
The entire decision is embedded below.