In a bizarre plot twist, the publishers accused of colluding with Apple to fix e-book prices stand to benefit from the penalties a judge has imposed on the tech giant.
Yesterday, Manhattan federal Judge Denise Cote placed restrictions on Apple after siding with the Justice Department in July, which argued that the iPad maker had violated antitrust laws.
The judge’s injunction bars Apple from entering into any agreement with the five publishers that settled the case — Hachette, HarperCollins, Simon & Schuster, Penguin and MacMillan — that “restricts, limits or impedes Apple’s ability to set, alter or reduce the retail price of any e-book.”
The ruling effectively prevents Apple from entering into so-called “agency model” agreements. That means Apple will no longer take a 30 percent cut from every e-book sold; instead, it will likely pay publishers based on a wholesale rate, usually 50 percent of what books sell for in brick-and-mortar stores.
“It’s a positive for publishers, though the injunction will not last forever,” one book industry source told The Post. “There will be a renegotiating period.”
Apple, which is expected to appeal the decision, can still do agency deals with smaller publishers.
The DOJ argued that Apple conspired with publishers to set prices higher than those offered by Amazon. Publishers feared that Amazon’s $10 price point would damage physical book sales, and suggested pricing at $12.99 and $15.99 instead.
The source added that publishers are also hoping an upcoming hearing over damages could result in a small windfall for the industry, as consumers are expected to receive credits if they bought certain books during the period in question.
“Much of the money being refunded might be channeled back into additional book buying,” the source said.
The judge will also appoint an antitrust monitor at Apple to give training on the topic to employees.