US judge wants external monitor for Apple in e-books case

A man looks at his Apple iPad in front an Apple logo outside an Apple store in downtown Shanghai March 16, 2012.

NEW YORK, Aug 27 (Reuters) - A US judge weighing remedies to assure that Apple Inc does not fix prices again in the e-books market said on Tuesday that she plans to require it to hire an external monitor, something the company considers unnecessary.

But US District Judge Denise Cote in Manhattan suggested a final injunction would be narrower than what the US Department of Justice has been seeking, and would not restrict Apple's agreements with suppliers of other types of content such as movies, music and TV shows.

She also said a provision related to Apple's app store that would allow other e-book retailers to provide a link to their websites or e-bookstores via an e-books app without having to pay Apple for book sales was "unnecessary."

"I want this injunction to rest as lightly as possible on how Apple runs its business," Cote said at a court hearing.

She said she expected to issue an injunction next week.

The proceedings followed a July 10 ruling by Cote that Apple conspired with five major US publishers to undermine e-book pricing established by the dominant retailer in the market, Inc.

The Justice Department, joined by 33 US states and territories, is now jostling with Apple over the scope of what Cote should do to prevent further antitrust violations.

Last week, the government eased its proposed injunction to cover just five years instead of 10, with the ability to obtain up to five one-year extensions if needed.

At Cote's suggestion, it also recommended that Apple hold staggered negotiations with publishers beginning in two years in an effort to avoid future collusion.

The five publishers, all of which have settled with regulators, include Lagardere SCA's Hachette Book Group Inc, News Corp's HarperCollins Publishers LLC, Penguin Random House LLC, CBS Corp's Simon & Schuster Inc, and Verlagsgruppe Georg von Holtzbrinck GmbH's Macmillan.

Cote on Tuesday said she would wait for the parties to hash out suggestions for final language for her injunction.

She said a monitor would be necessary, after Apple had failed to show it learned its lesson from its "blatant"violations of antitrust law.

The monitor, she said, would likely be installed to review Apple's internal antitrust compliance programme and procedures and recommend changes, and also required annual antitrust training for employees in Apple's e-books and content businesses.

Apple had vigorously contested hiring of a monitor, saying in court papers it would be "extremely costly and burdensome."

The Justice Department had earlier also sought to force Apple to hire an internal antitrust compliance officer, but has since backed off that demand.

Cote has scheduled a May 2014 trial to weigh damages, which could reach hundreds of millions of dollars.

She told both sides to contact a judge who previously oversaw court-ordered settlement talks, US District Judge Kimba Wood, for another session in September or October.

A spokesman for Apple did not immediately respond to a request for comment after the hearing.

The case is US v. Apple Inc et al, US District Court, Southern District of New York, No. 12-02826.

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