E-books settlement talks advancing: sources
(Reuters) - The Justice Department could reach a settlement in the next few weeks with Apple Inc (AAPL.O) and some of the major publishers suspected of colluding to push up electronic book prices, according to two people close to the negotiations.
Context & Ripple Effects
The Justice Department's e-book investigation has moved quickly since a publishing insider tipped law firms about the alleged price-fixing conspiracy last December. The collusion probe against Apple and several major publishers is confirmed; what Reuters now adds, per two people close to the talks, is that a settlement covering some of those defendants could land within weeks.
The story travelled unusually wide for an unconfirmed negotiation stage — pickups at CNET, The Verge, MacNN and MediaPost all ran the same wire reporting on or about March 31, 2012 — signaling how much attention any resolution will get across publishing and platform circles.
First-order effects
- Publishers included in the deal would accept court-enforced terms restructuring how they set e-book prices, closing out the government's core collusion theory without a trial for them.
- Because the reported settlement covers only 'some' of the major publishers, Apple and any holdouts stay exposed to a DOJ lawsuit filed on the same evidence.
Second-order effects
- A partial resolution splits the defendant group: settling publishers operate under new pricing restrictions while non-settlers carry litigation cost and risk into a possible trial.
- Retailers gain fresh leverage to renegotiate e-book distribution terms once the allegedly coordinated pricing structure is formally dismantled by consent decree.
Third-order effects
- If the DOJ closes this with negotiated terms rather than a courtroom verdict, it establishes a template for policing pricing coordination among hardware makers and content suppliers in digital markets.
- A US settlement also pressures overseas competition authorities weighing parallel action on the same conduct, since the enforcement record becomes a reference point for their own remedies.
The trend: Antitrust enforcement is extending from traditional price-fixing cartels into pricing coordination between device platforms and content suppliers, resolved increasingly through negotiated consent terms.