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 B

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.,
)
)
Defendants.
)
__________________________________________)
[PROPOSED] FINAL JUDGMENT AS TO DEFENDANTS
THE PENGUIN GROUP, A DIVISION OF PEARSON PLC, AND
PENGUIN GROUP (USA), INC.
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 PenguinMacmillan, 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
PenguinMacmillan 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, PenguinMacmillan agrees to be bound by the provisions of this Final
Judgment pending its approval by the Court;

AND WHEREAS, Plaintiff requires PenguinMacmillan 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, PenguinMacmillan has represented to the United States that the actions
and conduct restrictions can and will be undertaken and that it 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 PenguinMacmillan, it is ORDERED, ADJUDGED, AND
DECREED:
I. JURISDICTION
This Court has jurisdiction over the subject matter of this action and over
PenguinMacmillan. The Complaint states a claim upon which relief may be granted against
PenguinMacmillan under Section 1 of the Sherman Act, as amended, 15 U.S.C. ' 1.
II. DEFINITIONS
As used in this Final Judgment:
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,

2

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
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
3

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)
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

4

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; (2) The Penguin Group, a division of U.K.
corporation Pearson plc 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 (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 respective subsidiaries, divisions, groups,
partnerships; and each of their respective directors, officers, managers, agents, and employees.
Where Section IV.A, IV.B, IV.D, or VII imposes an obligation on Penguin to engage in certain
conduct by either a date certain or by a specified day after entry of this Final Judgment, any
successor or assign whose acquisition of or combination or other relationship with Penguin is
consummated after entry of this Final Judgment shall meet each such obligation within thirty days
after consummation. The prohibitions of Section V.A of this Final Judgment shall expire for any
successor or assign of Penguin on the dates on which such prohibitions would have expired for
Penguin had the acquisition, combination, or other relationship not occurred. Where the Final
Judgment imposes an obligation on Penguin to engage in or refrain from engaging in certain
conduct, that obligation shall apply to Penguin and to any joint venture or other business

5

arrangement established by Penguin and one or more Publisher Defendantsand partnerships; and
each of their respective directors, officers, managers, agents, and employees.
L.

“Penguin Random House” means the joint venture entities, which will operate

under the name “Penguin Random House,” that will be formed pursuant to the Contribution
Agreement, dated October 29, 2012, by and between Pearson plc and Bertelsmann SE & Co.
KGaA.
M.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.
N.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
6

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.
For purposes of this Final Judgment, it will not constitute a Price MFN under subsection 3
of this definition if PenguinMacmillan 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 PenguinMacmillan to meet all requests by the E-book Retailer for more favorable
pricing within the terms of the agreement.
O.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.
P.O.

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

Q.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.

7

R.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.
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 PenguinHoltzbrinck and VGvH, acting individually or in
concert, and all other Persons in active concert or participation with PenguinHoltzbrinck or VGvH
who receive actual notice of this Final Judgment by personal service or otherwise.
IV. REQUIRED CONDUCT
A.

Within seventhree business days after entry of this Final Judgment, Penguin shall

terminate any agreement with Apple relating to the Sale of E-books that was executed prior to
Penguin’sMacmillan’s stipulation to the entry of this Final Judgment.
8

A.

For, Macmillan shall notify each agreement between Penguin and an E-book

Retailer other than Apple with which Holtzbrinck has an agreement relating to the Sale of E-books
that Holtzbrinck will no longer enforce any term or terms in any such agreement 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, PenguinHoltzbrinck shall notify the E-book Retailer, by January 8, 2013, within three
business days after Macmillan’s stipulation to the entry of 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 ten days after entry of this Final
Judgment, PenguinHoltzbrinck 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.

PenguinHoltzbrinck 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 business
arrangement relating to the Sale, development, or promotion of E-books in the United States in
which PenguinHoltzbrinck 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
9

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 PenguinHoltzbrinck
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, PenguinHoltzbrinck 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 PenguinHoltzbrinck 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
E-books; (ii) PenguinHoltzbrinck 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)
PenguinHoltzbrinck 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) PenguinHoltzbrinck distributing E-books published by another
10

E-book Publisher (not a Publisher Defendant). The notification requirements of this Section IV.C
shall also not apply to the formation of Penguin Random House, review of which is pending before
the Department of Justice.
D.

PenguinMacmillan shall furnish to the Department of Justice (1) by January

8February 15, 2013, one complete copy of each agreement, executed, renewed, or extended on or
after January 1, 2012, between PenguinHoltzbrinck 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 Penguin’sMacmillan’s previous submission of agreements to the Department of
Justice.
V. PROHIBITED CONDUCT
A.

For two years, PenguinUntil 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
Penguin’s option, from either:.
1.

the termination of an agreement between Penguin 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
2.

the date on which Penguin notifies the E-book Retailer in writing that

Penguin 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
11

E-books, or from offering price discounts or any other form of promotions to encourage consumers
to Purchase one or more E-books.
Penguin 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 Penguin’s stipulation to the entry of this Final Judgment,

PenguinUntil 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.

PenguinHoltzbrinck shall not enter into any agreement with an E-book Retailer

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

PenguinMacmillan 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
PenguinHoltzbrinck 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
PenguinHoltzbrinck 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 Penguin’sHoltzbrinck’s E-books or from offering price discounts or any
other form of promotions to encourage consumers to Purchase any of Penguin’sHoltzbrinck’s
E-books.

12

E.

PenguinHoltzbrinck 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 PenguinHoltzbrinck 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.

Penguin (includingHoltzbrinck (and each officer of each parent of PenguinVGvH

who exercises direct control over Penguin’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;

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;

or
13

4.

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

This Section V.F shall not prohibit PenguinHoltzbrinck 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 PenguinHoltzbrinck 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 PenguinMacmillan 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,

PenguinHoltzbrinck 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 Penguin’sHoltzbrinck’s E-books (as opposed to advertising
or promotions engaged in by the E-book Retailer not specifically tied or directed to
Penguin’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
Penguin’sHoltzbrinck’s E-books by an aggregate amount equal to the total commissions
14

PenguinHoltzbrinck pays to the E-book Retailer, over a period of at least one year, in connection
with the Sale of Penguin’sHoltzbrinck’s E-books to consumers; (2) PenguinHoltzbrinck 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, PenguinMacmillan 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 Penguin’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

Penguin’sHoltzbrinck’s officers and directors, and to each of Penguin’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;
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
15

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 Penguin’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
terminate or modify Penguin’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;

16

H.

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

non-privileged communications with any Person containing allegations of Penguin’sMacmillan’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 Penguin’sMacmillan’s officers, directors, or employees involved in the
development of Penguin’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, PenguinMacmillan may
provide a summary of the communications rather than logging each communication individually);
and
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
Penguin’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
17

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 PenguinMacmillan, be permitted:
1.

access during Penguin’sMacmillan’s office hours to inspect and copy, or at

the option of the United States, to require PenguinMacmillan 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 PenguinMacmillan, relating to any matters contained in this
Final Judgment; and
2.

to interview, either informally or on the record, Penguin’sMacmillan’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 PenguinMacmillan.
B.

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

General in charge of the Antitrust Division, PenguinMacmillan shall submit written reports or
respond to written interrogatories, under oath if requested, relating to any of the matters 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 PenguinMacmillan 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
18

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 PenguinMacmillan to the

United States, PenguinMacmillan 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 PenguinMacmillan 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 PenguinMacmillan 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.
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 Penguin.Macmillan.

19

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