“The provisions do not impose any limitation on Apple’s pricing behavior at all; rather, under the guise of punishing Apple, they effectively punish the settling defendants by prohibiting agreements with Apple using an agency model,” as quoted from the WSJ.
The WSJ also added that:
In a court filing Wednesday afternoon, the publishers said that the U.S. Department of Justice’s demands on Apple would eliminate the use of the “agency model” for the sale and distribution of e-books for a period of five years, by prohibiting Apple from entering such agreements.
The publishers are correct in that the terms offered to Apple are more severe than the ones they agreed to, but I don’t see the problem with that fact.
I can also see why the DOJ imposed harsher terms. They probably don’t want another agency ebook model coalescing around Apple 2 years from now when the publisher’s settlement agreements start to expire. The publishers are probably correct in that 5 year restriction will likely keep the major publishers from adopting agency pricing 2 years from now ( or rather pressuring Amazon to adopt it).
As you probably recall, Apple was convicted of being the hub in a hub-and-spoke conspiracy to raise ebook prices. It is not at all unusual to punish a the ringleader more severely than the partners.
I wonder if the publishers are hoping that Judge Cote will forget all the testimony and evidence that she read and heard in the trial. Perhaps they are hoping that she will forget the fact that she called several of Apple’s key witnesses not credible in her ruling (that’s legalese for the judge saying they lied on the witness stand).
Chris Meadows of Teleread pointed out when i saw him this weekend that Judge Cote repeatedly described Sargent, Reidy, and Eddy Cue of Apple as being not credible. I missed this myself because the mentions were all in the footnotes, but the word credible was used so much that it could be turned into a drinking game.
Those footnotes are worth noting because they (as well as the ruling, earlier settlement agreements, and Judge Cote’s response to the amicus filings last year) offer signs that Judge Cote is not inclined to believe claims made by the publishers.
All the signs point to a likely outcome of the Judge imposing terms at least as strict as the ones proposed by the DOJ, and possibly even more strict. I floated the possibility that Judge Cote could order Apple to divest itself of their content division, and while that is a little extreme it is not impossible.