Unites States of America v. Apple, Inc. et al

Filing 175

NOTICE of Competitive Impact Statement. Document filed by Unites States of America. (Attachments: # 1 Exhibit A -- Redline to Original Judgment, # 2 Exhibit B -- Redline to Proposed Penguin Final Judgment)(Fairchild, Stephen)

EXHIBIT A
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
__________________________________________
)
UNITED STATES OF AMERICA,
)
)
Plaintiff,
)
) Civil Action No. 1:12-CV-2826 (DLC)
v.
)
) ECF Case
APPLE, INC.,
)
et al.,
)
HACHETTE BOOK GROUP, INC.,
)
Civil Action No.
HARPERCOLLINS PUBLISHERS L.L.C.,
)
VERLAGSGRUPPE GEORG VON
)
HOLTZBRINCK GMBH,
)
HOLTZBRINCK PUBLISHERS, LLC
)
d/b/a MACMILLAN,
)
THE PENGUIN GROUP,
)
A DIVISION OF PEARSON PLC,
)
PENGUIN GROUP (USA), INC., and
)
SIMON & SCHUSTER, INC.,
)
)
)
Defendants.
)
__________________________________________)
[PROPOSED] FINAL JUDGMENT AS TO DEFENDANTS
HACHETTE, HARPERCOLLINS, AND SIMON & SCHUSTER
VERLAGSGRUPPE GEORG VON HOLTZBRINCK GMBH &
HOLTZBRINCK PUBLISHERS, LLC D/B/A MACMILLAN
WHEREAS, Plaintiff, the United States of America filed its Complaint on April 11, 2012,
alleging that Defendants conspired to raise retail prices of E-books in violation of Section 1 of the
Sherman Act, as amended, 15 U.S.C. ' 1, and Plaintiff and Settling DefendantsMacmillan, by their
respective attorneys, have consented to the entry of this Final Judgment without trial or
adjudication of any issue of fact or law;

AND WHEREAS, this Final Judgment does not constitute any admission by Settling
DefendantsMacmillan that the law has been violated or of any issue of fact or law, other than that
the jurisdictional facts as alleged in the Complaint are true;
AND WHEREAS, Settling Defendants agreeMacmillan agrees to be bound by the
provisions of this Final Judgment pending its approval by the Court;
AND WHEREAS, Plaintiff requires Settling DefendantsMacmillan to agree to undertake
certain actions and refrain from certain conduct for the purpose of remedying the loss of
competition alleged in the Complaint;
AND WHEREAS, Settling Defendants haveMacmillan has represented to the United
States that the actions and conduct restrictions can and will be undertaken and that theyit will later
raise no claim of hardship or difficulty as grounds for asking the Court to modify any of the
provisions contained below;
NOW THEREFORE, before any testimony is taken, without trial or adjudication of any
issue of fact or law, and upon consent of Settling DefendantsMacmillan, it is ORDERED,
ADJUDGED, AND DECREED:
I. JURISDICTION
This Court has jurisdiction over the subject matter of this action and over the Settling
Defendants.Macmillan. The Complaint states a claim upon which relief may be granted against
Settling DefendantsMacmillan under Section 1 of the Sherman Act, as amended, 15 U.S.C. ' 1.
II. DEFINITIONS
As used in this Final Judgment:

2

A.

“Agency Agreement” means an agreement between an E-book Publisher and an

E-book Retailer under which the E-book Publisher Sells E-books to consumers through the E-book
Retailer, which under the agreement acts as an agent of the E-book Publisher and is paid a
commission in connection with the Sale of one or more of the E-book Publisher’s E-books.
B.

“Apple” means Apple, Inc., a California corporation with its principal place of

business in Cupertino, California, its successors and assigns, and its parents, subsidiaries,
divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers,
managers, agents, and employees.
C.

“Department of Justice” means the Antitrust Division of the United States

Department of Justice.
D.

“E-book” means an electronically formatted book designed to be read on a

computer, a handheld device, or other electronic devices capable of visually displaying E-books.
For purposes of this Final Judgment, the term E-book does not include (1) an audio book, even if
delivered and stored digitally; (2) a standalone specialized software application or “app” sold
through an “app store” rather than through an e-book store (e.g., through Apple’s “App Store”
rather than through its “iBookstore” or “iTunes”) and not designed to be executed or read by or
through a dedicated E-book reading device; or (3) a media file containing an electronically
formatted book for which most of the value to consumers is derived from audio or video content
contained in the file that is not included in the print version of the book; or (4) the electronically
formatted version of a book marketed solely for use in connection with academic coursework.
E.

“E-book Publisher” means any Person that, by virtue of a contract or other

relationship with an E-book’s author or other rights holder, owns or controls the necessary

3

copyright or other authority (or asserts such ownership or control) over any E-book sufficient to
distribute the E-book within the United States to E-book Retailers and to permit such E-book
Retailers to Sell the E-book to consumers in the United States. Publisher Defendants are E-book
Publishers. For purposes of this Final Judgment, E-book Retailers are not E-book Publishers.
F.

“E-book Retailer” means any Person that lawfully Sells (or seeks to lawfully Sell)

E-books to consumers in the United States, or through which a Publisher Defendant, under an
Agency Agreement, Sells E-books to consumers. For purposes of this Final Judgment, Publisher
Defendants and all other Persons whose primary business is book publishing are not E-book
Retailers.
G.

“Hachette” means Hachette Book Group, Inc., a Delaware corporation with its

principal place of business in New York, New York, its successors and assigns, and its
subsidiaries, divisions, groups, and partnerships, and their directors, officers, managers, agents,
and employees.
H.

“HarperCollins” means HarperCollins Publishers L.L.C., a Delaware limited

liability company with its principal place of business in New York, New York, its successors and
assigns, and its subsidiaries, divisions, groups, and partnerships, and their directors, officers,
managers, agents, and employees.
I.

“Including” means including, but not limited to.

J.

“Macmillan” means (1) Holtzbrinck Publishers, LLC d/b/a Macmillan, a New York

limited liability company with its principal place of business in New York, New York
(“Holtzbrinck”), its successors and assigns, and its subsidiaries, divisions, groups, and
partnerships, and their directors, officers, managers, agents, and employees; and (2)

4

Verlagsgruppe Georg von Holtzbrinck GmbH, a German corporation with its principal place of
business in Stuttgart, Germany, their (“VGvH”), its successors and assigns, and their parents,
subsidiaries,its divisions, groups, affiliates, and partnerships, and their directors, officers,
managers, agents, and employees. Where the Final Judgment imposes an obligation on
Macmillan to engage in or refrain from engaging in certain conduct, that obligation shall apply to
Macmillan and to any joint venture or other business arrangement established by Macmillan and
one or more Publisher Defendants.
K.

“Penguin” means (1) Penguin Group (USA), Inc., a Delaware corporation with its

principal place of business in New York, New York, and; (2) The Penguin Group, a division of
U.K. corporation Pearson PLCplc with its principal place of business in London, England,; (3) The
Penguin Publishing Company Ltd, a company registered in England and Wales with its principal
place of business in London, England; and (4) Dorling Kindersley Holdings Limited, a company
registered in England and Wales with its principal place of business in London, England; and each
of their respective successors and assigns, and (expressly including Penguin Random House, a
joint venture by and between Pearson plc and Bertelsmann SE & Co. KGaA, and any similar joint
venture between Penguin and Random House Inc.); each of their parents,respective subsidiaries,
divisions, groups, affiliates, and partnerships,; and each of their respective directors, officers,
managers, agents, and employees.
L.

“Person” means any natural person, corporation, company, partnership, joint

venture, firm, association, proprietorship, agency, board, authority, commission, office, or other
business or legal entity, whether private or governmental.

5

M.

“Price MFN” means a term in an agreement between an E-book Publisher and an

E-book Retailer under which
1.

the Retail Price at which an E-book Retailer or, under an Agency

Agreement, an E-book Publisher Sells one or more E-books to consumers depends in any way on
the Retail Price, or discounts from the Retail Price, at which any other E-book Retailer or the
E-book Publisher, under an Agency Agreement, through any other E-book Retailer Sells the same
E-book(s) to consumers.;
2.

the Wholesale Price at which the E-book Publisher Sells one or more

E-books to that E-book Retailer for Sale to consumers depends in any way on the Wholesale Price
at which the E-book Publisher Sells the same E-book(s) to any other E-book Retailer for Sale to
consumers; or
3.

the revenue share or commission that E-book Retailer receives from the

E-book Publisher in connection with the Sale of one or more E-books to consumers depends in any
way on the revenue share or commission that (a) any other E-book Retailer receives from the
E-book Publisher in connection with the Sale of the same E-book(s) to consumers, or (b) that
E-book Retailer receives from any other E-book Publisher in connection with the Sale of one or
more of the other E-book Publisher’s E-books.

6

For purposes of this Final Judgment, it will not constitute a Price MFN under subsection 3
of this definition if a Settling DefendantMacmillan agrees, at the request of an E-book Retailer, to
meet more favorable pricing, discounts, or allowances offered to the E-book Retailer by another
E-book Publisher for the period during which the other E-book Publisher provides that additional
compensation, so long as that agreement is not or does not result from a pre-existing agreement
that requires the Settling DefendantMacmillan to meet all requests by the E-book Retailer for more
favorable pricing within the terms of the agreement.
N.

“Publisher Defendants” means Hachette, HarperCollins, Macmillan, Penguin, and

Simon & Schuster. Where this Final Judgment imposes an obligation on Publisher Defendants to
engage in or refrain from engaging in certain conduct, that obligation shall apply to each Publisher
Defendant individually and to any joint venture or other business arrangement established by any
two or more Publisher Defendants.
O.

“Purchase” means a consumer’s acquisition of one or more E-books as a result of a

P.

“Retail Price” means the price at which an E-book Retailer or, under an Agency

Sale.

Agreement, an E-book Publisher Sells an E-book to a consumer.
Q.

“Sale” means delivery of access to a consumer to read one or more E-books

(purchased alone, or in combination with other goods or services) in exchange for payment; “Sell”
or “Sold” means to make or to have made a Sale of an E-book to a consumer.
R.

“Settling Defendants” means Hachette, HarperCollins, and Simon & Schuster.

Where the Final Judgment imposes an obligation on Settling Defendants to engage in or refrain
from engaging in certain conduct, that obligation shall apply to each Settling Defendant

7

individually and to any joint venture other business arrangement established by a Settling
Defendant and one or more Publisher Defendants.
S.R.

“Simon & Schuster” means Simon & Schuster, Inc., a New York corporation with

its principal place of business in New York, New York, its successors and assigns, and its
subsidiaries, divisions, groups, and partnerships, and their directors, officers, managers, agents,
and employees.
T.S.

“Wholesale Price” means (1) the net amount, after any discounts or other

adjustments (not including promotional allowances subject to Section 2(d) of the
Robinson-Patman Act, 15 U.S.C. ' 13(d)), that an E-book Retailer pays to an E-book Publisher for
an E-book that the E-book Retailer Sells to consumers; or (2) the Retail Price at which an E-book
Publisher, under an Agency Agreement, Sells an E-book to consumers through an E-book Retailer
minus the commission or other payment that E-book Publisher pays to the E-book Retailer in
connection with or that is reasonably allocated to that Sale.
III. APPLICABILITY
This Final Judgment applies to Settling DefendantsHoltzbrinck and VGvH, acting
individually or in concert, and all other Persons in active concert or participation with any of
themHoltzbrinck or VGvH who receive actual notice of this Final Judgment by personal service or
otherwise.

8

IV. REQUIRED CONDUCT
A.

Within seventhree business days after Macmillan’s stipulation to the entry of this

Final Judgment, each Settling DefendantMacmillan shall terminate any notify each E-book
Retailer with which Holtzbrinck has an agreement with Apple relating to the Sale of E-books that
was executed prior to the filing of the Complaint.
A.

For eachHoltzbrinck will no longer enforce any term or terms in any such

agreement between a Settling Defendant and an E-book Retailer other than Apple that (1) restricts,
limitsrestrict, limit, or impedesimpede the E-book Retailer’s ability to set, alter, or reduce the
Retail Price of any E-book or to offer price discounts or any other form of promotions to encourage
consumers to Purchase one or more E-books; or (2), except to the extent consistent with Section
VI.B of this Final Judgment.
B.

For each agreement between Holtzbrinck and an E-book Retailer that contains a

Price MFN, the Settling DefendantHoltzbrinck shall notify the E-book Retailer, within tenthree
business days of after Macmillan’s stipulation to the filingentry of the Complaint,this Final
Judgment that the E-book Retailer may terminate the agreement with thirty-days notice and shall,
thirty days after the E-book Retailer provides such notice, release the E-book Retailer from the
agreement. For each such agreement that the E-book Retailer has not terminated within thirtyten
days after entry of this Final Judgment, each Settling DefendantHoltzbrinck shall, as soon as
permitted under the agreement, take each step required under the agreement to cause the
agreement to be terminated and not renewed or extended.
C.

Settling DefendantsHoltzbrinck shall notify the Department of Justice in writing at

least sixty days in advance of the formation or material modification of any joint venture or other

9

business arrangement relating to the Sale, development, or promotion of E-books in the United
States in which a Settling DefendantHoltzbrinck and at least one other E-book Publisher
(including another Publisher Defendant) are participants or partial or complete owners. Such
notice shall describe the joint venture or other business arrangement, identify all E-book
Publishers that are parties to it, and attach the most recent version or draft of the agreement,
contract, or other document(s) formalizing the joint venture or other business arrangement.
Within thirty days after a Settling DefendantHoltzbrinck provides notification of the joint venture
or business arrangement, the Department of Justice may make a written request for additional
information. If the Department of Justice makes such a request, the Settling
DefendantHoltzbrinck shall not proceed with the planned formation or material modification of
the joint venture or business arrangement until thirty days after substantially complying with such
additional request(s) for information. The failure of the Department of Justice to request
additional information or to bring an action under the antitrust laws to challenge the formation or
material modification of the joint venture shall neither give rise to any inference of lawfulness nor
limit in any way the right of the United States to investigate the formation, material modification,
or any other aspects or activities of the joint venture or business arrangement and to bring actions
to prevent or restrain violations of the antitrust laws.
The notification requirements of this Section IV.C shall not apply to ordinary course
business arrangements between a Publisher DefendantHoltzbrinck and another E-book Publisher
(not a Publisher Defendant) that do not relate to the Sale of E-books to consumers, or to business
arrangements the primary or predominant purpose or focus of which involves: (i) E-book
Publishers co-publishing one or more specifically identified E-book titles or a particular author’s

10

E-books; (ii) a Settling DefendantHoltzbrinck licensing to or from another E-book Publisher the
publishing rights to one or more specifically identified E-book titles or a particular author’s
E-books; (iii) a Settling DefendantHoltzbrinck providing technology services to or receiving
technology services from another E-book Publisher (not a Publisher Defendant) or licensing rights
in technology to or from another E-book Publisher; or (iv) a Settling DefendantHoltzbrinck
distributing E-books published by another E-book Publisher (not a Publisher Defendant).
D.

Each Settling DefendantMacmillan shall furnish to the Department of Justice (1)

within seven days after entry of this Final Judgmentby February 15, 2013, one complete copy of
each agreement, executed, renewed, or extended on or after January 1, 2012, between the Settling
DefendantHoltzbrinck and any E-book Retailer relating to the Sale of E-books, and, (2) thereafter,
on a quarterly basis, each such agreement executed, renewed, or extended since the Settling
Defendant’sMacmillan’s previous submission of agreements to the Department of Justice.
V. PROHIBITED CONDUCT
A.

For two years, Settling DefendantsUntil December 18, 2014, Holtzbrinck shall not

restrict, limit, or impede an E-book Retailer’s ability to set, alter, or reduce the Retail Price of any
E-book or to offer price discounts or any other form of promotions to encourage consumers to
Purchase one or more E-books, such two-year period to run separately for each E-book Retailer, at
the option of the Settling Defendant, from either:.
1.

the termination of an agreement between the Settling Defendant and the

E-book Retailer that restricts, limits, or impedes the E-book Retailer’s ability to set, alter, or reduce
the Retail Price of any E-book or to offer price discounts or any other form of promotions to
encourage consumers to Purchase one or more E-books; or

11

2.

the date on which the Settling Defendant notifies the E-book Retailer in

writing that the Settling Defendant will not enforce any term(s) in its agreement with the E-book
Retailer that restrict, limit, or impede the E-book Retailer from setting, altering, or reducing the
Retail Price of one or more E-books, or from offering price discounts or any other form of
promotions to encourage consumers to Purchase one or more E-books.
Each Settling Defendant shall notify the Department of Justice of the option it selects for
each E-book Retailer within seven days of making its selection.
B.

For two years after the filing of the Complaint, Settling DefendantsUntil December

18, 2014, Holtzbrinck shall not enter into any agreement with any E-book Retailer that restricts,
limits, or impedes the E-book Retailer from setting, altering, or reducing the Retail Price of one or
more E-books, or from offering price discounts or any other form of promotions to encourage
consumers to Purchase one or more E-books.
C.

Settling DefendantsHoltzbrinck shall not enter into any agreement with an E-book

Retailer relating to the Sale of E-books that contains a Price MFN.
D.

Settling DefendantsMacmillan shall not retaliate against, or urge any other E-book

Publisher or E-book Retailer to retaliate against, an E-book Retailer for engaging in any activity
that the Settling Defendants areHoltzbrinck is prohibited by Sections V.A, V.B, and VI.B.2 of this
Final Judgment from restricting, limiting, or impeding in any agreement with an E-book
Retailer. After the expiration of prohibitions in Sections V.A and V.B of this Final Judgment, this
Section V.D shall not prohibit any Settling DefendantHoltzbrinck from unilaterally entering into
or enforcing any agreement with an E-book Retailer that restricts, limits, or impedes the E-book
Retailer from setting, altering, or reducing the Retail Price of any of the Settling

12

Defendant’sHoltzbrinck’s E-books or from offering price discounts or any other form of
promotions to encourage consumers to Purchase any of the Settling Defendant’sHoltzbrinck’s
E-books.
E.

Settling DefendantsHoltzbrinck shall not enter into or enforce any agreement,

arrangement, understanding, plan, program, combination, or conspiracy with any E-book
Publisher (including another Publisher Defendant) to raise, stabilize, fix, set, or coordinate the
Retail Price or Wholesale Price of any E-book or fix, set, or coordinate any term or condition
relating to the Sale of E-books.
This Section V.E shall not prohibit a Settling DefendantHoltzbrinck from entering into and
enforcing agreements relating to the distribution of another E-book Publisher’s E-books (not
including the E-books of another Publisher Defendant) or to the co-publication with another
E-book Publisher of specifically identified E-book titles or a particular author’s E-books, or from
participating in output-enhancing industry standard-setting activities relating to E-book security or
technology.
F.

A Settling Defendant (includingHoltzbrinck (and each officer of each parent of the

Settling DefendantVGvH who exercises direct control over the Settling Defendant’sHoltzbrinck’s
business decisions or strategies) shall not convey or otherwise communicate, directly or indirectly
(including by communicating indirectly through an E-book Retailer with the intent that the E-book
Retailer convey information from the communication to another E-book Publisher or knowledge
that it is likely to do so), to any other E-book Publisher (including to an officer of a parent of a
Publisher Defendant) any competitively sensitive information, including:
1.

its business plans or strategies;

13

2.

its past, present, or future wholesale or retail prices or pricing strategies for

books sold in any format (e.g., print books, E-books, or audio books);
3.

any terms in its agreement(s) with any retailer of books Sold in any format;

4.

any terms in its agreement(s) with any author.

or

This Section V.F shall not prohibit a Settling DefendantHoltzbrinck from communicating
(a) in a manner and through media consistent with common and reasonable industry practice, the
cover prices or wholesale or retail prices of books sold in any format to potential purchasers of
those books; or (b) information the Settling DefendantHoltzbrinck needs to communicate in
connection with (i) its enforcement or assignment of its intellectual property or contract rights, (ii)
a contemplated merger, acquisition, or purchase or sale of assets, (iii) its distribution of another
E-book Publisher’s E-books, or (iv) a business arrangement under which E-book Publishers agree
to co-publish, or an E-book Publisher agrees to license to another E-book Publisher the publishing
rights to, one or more specifically identified E-book titles or a particular author’s E-books.
VI. PERMITTED CONDUCT
A.

Nothing in this Final Judgment shall prohibit a Settling DefendantMacmillan

unilaterally from compensating a retailer, including an E-book Retailer, for valuable marketing or
other promotional services rendered.
B.

Notwithstanding Sections V.A and V.B of this Final Judgment, a Settling

DefendantHoltzbrinck may enter into Agency Agreements with E-book Retailers under which the
aggregate dollar value of the price discounts or any other form of promotions to encourage
consumers to Purchase one or more of the Settling Defendant’sHoltzbrinck’s E-books (as opposed
14

to advertising or promotions engaged in by the E-book Retailer not specifically tied or directed to
the Settling Defendant’sHoltzbrinck’s E-books) is restricted; provided that (1) such agreed
restriction shall not interfere with the E-book Retailer’s ability to reduce the final price paid by
consumers to purchase the Settling Defendant’sHoltzbrinck’s E-books by an aggregate amount
equal to the total commissions the Settling DefendantHoltzbrinck pays to the E-book Retailer,
over a period of at least one year, in connection with the Sale of the Settling
Defendant’sHoltzbrinck’s E-books to consumers; (2) the Settling DefendantHoltzbrinck shall not
restrict, limit, or impede the E-book Retailer’s use of the agreed funds to offer price discounts or
any other form of promotions to encourage consumers to Purchase one or more E-books; and (3)
the method of accounting for the E-book Retailer’s promotional activity does not restrict, limit, or
impede the E-book Retailer from engaging in any form of retail activity or promotion.
VII. ANTITRUST COMPLIANCE
Within thirty days after entry of this Final Judgment, each Settling DefendantMacmillan
shall designate itsHoltzbrinck’s general counsel or chief legal officer, or an employee reporting
directly to its general counsel or chief legal officer, as Antitrust Compliance Officer with
responsibility for ensuring the Settling Defendant’sMacmillan’s compliance with this Final
Judgment. The Antitrust Compliance Officer shall be responsible for the following:
A.

furnishing a copy of this Final Judgment, within thirty days of its entry, to each of

the Settling Defendant’sHoltzbrinck’s officers and directors, and to each of the Settling
Defendant’sHoltzbrinck’s employees engaged, in whole or in part, in the distribution or Sale of
E-books, and to each of VGvH’s officers, directors, or employees involved in the development of
Holtzbrinck’s plans or strategies relating to E-books;

15

B.

furnishing a copy of this Final Judgment in a timely manner to each officer,

director, or employee who succeeds to any position identified in Section VII.A of this Final
Judgment;
C.

ensuring that each person identified in Sections VII.A and VII.B of this Final

Judgment receives at least four hours of training annually on the meaning and requirements of this
Final Judgment and the antitrust laws, such training to be delivered by an attorney with relevant
experience in the field of antitrust law;
D.

obtaining, within sixty days after entry of this Final Judgment and on each

anniversary of the entry of this Final Judgment, from each person identified in Sections VII.A and
VII.B of this Final Judgment, and thereafter maintaining, a certification that each such person (a)
has read, understands, and agrees to abide by the terms of this Final Judgment; and (b) is not aware
of any violation of this Final Judgment or the antitrust laws or has reported any potential violation
to the Antitrust Compliance Officer;
E.

conducting an annual antitrust compliance audit covering each person identified in

Sections VII.A and VII.B of this Final Judgment, and maintaining all records pertaining to such
audits;
F.

communicating annually to the Settling Defendant’s employeesHoltzbrinck’s

employees and to all VGvH employees identified in Sections VII.A and VII.B of this Final
Judgment that they may disclose to the Antitrust Compliance Officer, without reprisal,
information concerning any potential violation of this Final Judgment or the antitrust laws;
G.

taking appropriate action, within three business days of discovering or receiving

credible information concerning an actual or potential violation of this Final Judgment, to

16

terminate or modify the Settling Defendant’sMacmillan’s conduct to assure compliance with this
Final Judgment; and, within seven days of taking such corrective actions, providing to the
Department of Justice a description of the actual or potential violation of this Final Judgment and
the corrective actions taken;
H.

furnishing to the Department of Justice on a quarterly basis electronic copies of any

non-privileged communications with any Person containing allegations of Settling
Defendants’Macmillan’s noncompliance with any provisions of this Final Judgment;
I.

maintaining, and furnishing to the Department of Justice on a quarterly basis, a log

of all oral and written communications, excluding privileged or public communications, between
or among (1) any of the Settling Defendant’sMacmillan’s officers, directors, or employees
involved in the development of the Settling Defendant’sHoltzbrinck’s plans or strategies relating
to E-books, and (2) any person employed by or associated with another Publisher Defendant,
relating, in whole or in part, to the distribution or sale in the United States of books sold in any
format, including an identification (by name, employer, and job title) of the author and recipients
of and all participants in the communication, the date, time, and duration of the communication,
the medium of the communication, and a description of the subject matter of the communication
(for a collection of communications solely concerning a single business arrangement that is
specifically exempted from the reporting requirements of Section IV.C of this Final Judgment, the
Settling DefendantMacmillan may provide a summary of the communications rather than logging
each communication individually); and

17

J.

providing to the Department of Justice annually, on or before the anniversary of the

entry of this Final Judgment, a written statement as to the fact and manner of the Settling
Defendant’sMacmillan’s compliance with Sections IV, V, and VII of this Final Judgment.
VIII. COMPLIANCE INSPECTION
A.

For purposes of determining or securing compliance with this Final Judgment, or of

determining whether the Final Judgment should be modified or vacated, and subject to any legally
recognized privilege, from time to time duly authorized representatives of the Department of
Justice, including consultants and other persons retained by the Department of Justice, shall, upon
written request of an authorized representative of the Assistant Attorney General in charge of the
Antitrust Division, and on reasonable notice to Settling DefendantsMacmillan, be permitted:
1.

access during the Settling Defendants’Macmillan’s office hours to inspect

and copy, or at the option of the United States, to require Settling DefendantsMacmillan to provide
to the United States hard copy or electronic copies of all books, ledgers, accounts, records, data,
and documents in the possession, custody, or control of Settling DefendantsMacmillan, relating to
any matters contained in this Final Judgment; and
2.

to interview, either informally or on the record, the Settling

Defendants’Macmillan’s officers, employees, or agents, who may have their individual counsel
present, regarding such matters. The interviews shall be subject to the reasonable convenience of
the interviewee and without restraint or interference by Settling DefendantsMacmillan.
B.

Upon the written request of an authorized representative of the Assistant Attorney

General in charge of the Antitrust Division, Settling DefendantsMacmillan shall submit written
reports or respond to written interrogatories, under oath if requested, relating to any of the matters

18

contained in this Final Judgment as may be requested. Written reports authorized under this
paragraph may, in the sole discretion of the United States, require Settling DefendantsMacmillan
to conduct, at their cost, an independent audit or analysis relating to any of the matters contained in
this Final Judgment.
C.

No information or documents obtained by the means provided in this Section shall

be divulged by the United States to any person other than an authorized representative of the
executive branch of the United States, except in the course of legal proceedings to which the
United States is a party (including grand jury proceedings), or for the purpose of securing
compliance with this Final Judgment, or as otherwise required by law.
D.

If at the time information or documents are furnished by a Settling

DefendantMacmillan to the United States, the Settling DefendantMacmillan represents and
identifies in writing the material in any such information or documents to which a claim of
protection may be asserted under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure, and the
Settling DefendantMacmillan marks each pertinent page of such material, “Subject to claim of
protection under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure,” then the United States
shall give the Settling DefendantMacmillan ten calendar days notice prior to divulging such
material in any civil or administrative proceeding.
IX. RETENTION OF JURISDICTION
This Court retains jurisdiction to enable any party to apply to this Court at any time for
further orders and directions as may be necessary or appropriate to carry out or construe this Final
Judgment, to modify any of its provisions, to enforce compliance, and to punish violations of its
provisions.

19

X. NO LIMITATION ON GOVERNMENT RIGHTS
Nothing in this Final Judgment shall limit the right of the United States to investigate and
bring actions to prevent or restrain violations of the antitrust laws concerning any past, present, or
future conduct, policy, or practice of the Settling Defendants.Macmillan.

XI. EXPIRATION OF FINAL JUDGMENT
Unless this Court grants an extension, this Final Judgment shall expire five years from the
date of its entry.
XII. PUBLIC INTEREST DETERMINATION
Entry of this Final Judgment is in the public interest. The parties have complied with the
requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C. ' 16, including making
copies available to the public of this Final Judgment, the Competitive Impact Statement, and any
comments thereon and the United States= responses to comments. Based upon the record before
the Court, which includes the Competitive Impact Statement and any comments and response to
comments filed with the Court, entry of this Final Judgment is in the public interest.

Date: __________________

Court approval subject to procedures set
forth in the Antitrust Procedures and
Penalties Act, 15 U.S.C. ' 16

________________________________
United States District Judge

20