1. They must terminate their Agency Agreements with Apple within seven days after entry of the proposed Final Judgment.
2. They must terminate those contracts with e-book retailers that contain either a) a restriction on the e-book retailer’s ability to set the retail price of any e-book, or b) a “Price MFN,” as defined in the proposed Final Judgment, as soon as each contract permits starting thirty days after entry of the proposed Final Judgment.
3. For at least two years, they may not agree to any new contract with an e-book retailer that restricts the retailer’s discretion over e-book pricing.
4. For at least five years, they may not enter into an agreement with an e-book retailer that includes a Price MFN.

The Complaint and CIS provide a sufficient factual foundation as to the existence of a conspiracy to raise, fix, and stabilize the retail price for newly-released and bestselling trade e-books, to end retail price competition among trade e-books retailers, and to limit retail price competition among the Publisher Defendants. Although the Government did not submit any economic studies to support its allegations, such studies are unnecessary. The Complaint alleges a straightforward, horizontal price-fixing conspiracy, which is per se unlawful under the Sherman Act.... The Complaint also details the defendants’ public statements, conversations, and meetings as evidence of the existence of the conspiracy. The decree is directed narrowly towards undoing the price-fixing conspiracy, ensuring that price-fixing does not immediately reemerge, and ensuring compliance. Based on the factual allegations in the Complaint and CIS, it is reasonable to conclude that these remedies will result in a return to the pre-conspiracy status quo. In this straightforward price-fixing case, no further showing is required.

It is not necessary to hold an evidentiary hearing before approving the decree. Given the voluminous submissions from the public and the non-settling parties, which describe and debate the nature of the alleged collusion and the wisdom and likely impact of settlement terms in great detail, as well as the detailed factual allegations in the Complaint, the Court is well-equipped to rule on these matters. A hearing would serve only to delay the proceedings unnecessarily.

If unfettered e-books retail competition will add substantially to the competitive pressures on physical bookstores, or if smaller e-book retailers are unable to compete with Amazon on price, these are not reasons to decline to enter the proposed Final Judgment.

None of the comments demonstrate that either condition for predatory pricing by Amazon existed or will likely exist. Indeed, while the comments complain that Amazon’s $9.99 price for newly-released and bestselling e-books was “predatory,” none of them attempts to show that Amazon’s e-book prices as a whole were below its marginal costs.

Third, even if Amazon was engaged in predatory pricing, this is no excuse for unlawful price-fixing. Congress “has not permitted the age-old cry of ruinous competition and competitive evils to be a defense to price-fixing conspiracies.” ... The familiar mantra regarding “two wrongs” would seem to offer guidance in these circumstances.

While publishers are entitled to their profits, consumers are equally entitled to a fair and open marketplace. This settlement will provide restitution to those customers who were harmed by this price-fixing scheme, but it also will restore competition in the eBook market for consumers’ long-term benefit.

Details are still scarce, but sources say Apple and Macmillan refused to participate in settlement talks while some of the other publishers are still hoping to avoid a drawn out legal battle, and may settle soon. Update: Bloomberg is now reporting that S&S, HarperCollins and Hachette have settled. It will be interesting to see what kind of defense Apple brings, because the evidence of collusion doesn't look good for them at all. Despite Authors Guild president Scott Turow's self-serving claim that this will somehow hurt culture, this is good news for readers: busting Apple's and the publishers' iron grip on ebook prices will likely reduce them across the board.

Here is this the government's complete filing (pdf and embedded below).