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Originally published Friday, August 2, 2013 at 4:26 PM

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U.S. wants rules for Apple’s sales on e-books, other media

The federal government’s proposed guidelines suggest Apple should terminate its existing agreements with five major publishers and avoid entering similar agreements in the future with providers of music, movies, TV shows and games.

The New York Times

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NEW YORK — In July, the Justice Department won its antitrust lawsuit that accused Apple of conspiring with publishers to raise the prices of e-books. Now, the government wants to use its victory to discipline Apple in other markets where it does business, like movies, music and television shows.

The Justice Department on Friday proposed guidelines to U.S. District Court in Manhattan on how to enforce the July ruling. The guidelines suggest Apple should be forced to terminate its existing agreements with five major publishers and avoid entering similar agreements in the future with providers of music, movies and TV shows and games.

The guidelines would put rules in place to prevent Apple from facilitating price-fixing among publishers, or from retaliating against publishers that refuse to bend to its terms. The Justice Department also suggested that Apple allow Amazon and Barnes & Noble to insert links inside their e-book apps to their e-bookstores, so consumers can easily compare prices of e-books.

“The court found that Apple’s illegal conduct deprived consumers of the benefits of e-book price competition and forced them to pay substantially higher prices,” William J. Baer, assistant attorney general for the Justice Department’s Antitrust Division, said in a statement. “Under the department’s proposed order, Apple’s illegal conduct will cease and Apple and its senior executives will be prevented from conspiring to thwart competition in the future.”

In a statement filed by Apple’s legal counsel, Gibson, Dunn & Crutcher, Apple said the government’s proposal was a “draconian and punitive intrusion” into its business.

The “overreaching proposal would establish a vague, new compliance regime — applicable only to Apple — with intrusive oversight lasting for 10 years, going far beyond the legal issues in this case, injuring competition and consumers, and violating basic principles of fairness and due process,” Apple’s lawyer, Orin Snyder, said in the company’s statement. “The resulting cost of this relief — not only in dollars, but also lost opportunities for American businesses and consumers — would be vast.”

The Justice Department declined to comment.

In the case, brought last year, the Justice Department accused Apple and five book publishers of conspiring to raise e-book prices. It cast Apple as the ringmaster of the conspiracy, colluding with the publishers to collectively help them defeat Amazon’s uniform pricing of $9.99 for new e-books.

The judge, Denise Cote, will hold a hearing next week to discuss the Justice Department’s proposed remedy.

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