Apple deserves a five-year ban from entering anti-competitive e-book distribution contracts and should end its business arrangements with five major publishers with which it conspired to raise e-book prices, US federal and state regulators said today.

The US Department of Justice and 33 US states and territories proposed those changes.

This comes after US District Judge Denise Cote in Manhattan last month found in a civil competition case that Apple played a "central role" in a conspiracy with the publishers to raise e-book prices.

Regulators also want Apple for two years to let retailers such as and Barnes & Noble provide links to make it easier for consumers to compare prices.

They also want Apple to use an outside monitor to ensure that its internal competition compliance policies are strong enough to catch illegal conduct before consumers are harmed. The proposed changes require Cote's approval.

"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," said Bill Baer, head of the Justice Department's competition division.

Apple has said it did not conspire to fix e-book prices and that it planned to appeal Cote's decision. Regulators accused Apple of conspiring to undercut's e-book dominance, causing some prices to rise to $12.99 or $14.99 from the $9.99 that was charging.

They said the alleged collusion had begun in late 2009 and continued into early 2010, as California-based Apple launched its popular iPad tablet.

The publishers included Lagardere's Hachette Book Group, News Corp's HarperCollins Publishers, Pearson's Penguin Group, CBS Corp's Simon & Schuster and Verlagsgruppe Georg von Holtzbrinck's Macmillan.

Only Apple went to trial, while the publishers agreed to pay more than $166m for the benefit of consumers.

A hearing to discuss remedies is scheduled for August. 9. The judge has said she also plans to hold a trial on damages.