DoJ sues Apple, five of Big Six

Torgo · Apr 11, 2012

Well, the DoJ just dropped the hammer on the publishing industry.

Reading the complaint, it does look a bit, well, collusion-y. I'm very disappointed in my colleagues for talking about this stuff a) without any apparent knowledge of antitrust laws and b) ON EMAIL JEEZ GUYS EVER HEARD OF SUBPOENAS?

Anyway. On we go towards a bright future in which Amazon is a monopoly, a monopsony, and probably a monorail for all I know. Onwards!

MacAllister · Apr 11, 2012

Jon Sargent's (Macmillan) statement:

Dear authors, illustrators and agents:

Today the Department of Justice filed a lawsuit against Macmillan’s US trade publishing operation, charging us with collusion in the implementation of the agency model for e-book pricing. The charge is civil, not criminal. Let me start by saying that Macmillan did not act illegally. Macmillan did not collude.

We have been in discussions with the Department of Justice for months. It is always better if possible to settle these matters before a case is brought. The costs of continuing—in time, distraction, and expense— are truly daunting.

But the terms the DOJ demanded were too onerous. After careful consideration, we came to the conclusion that the terms could have allowed Amazon to recover the monopoly position it had been building before our switch to the agency model. We also felt the settlement the DOJ wanted to impose would have a very negative and long term impact on those who sell books for a living, from the largest chain stores to the smallest independents.

When Macmillan changed to the agency model we did so knowing we would make less money on our e book business. We made the change to support an open and competitive market for the future, and it worked. We still believe in that future and we still believe the agency model is the only way to get there.

The full statement is at the link above.

Xelebes · Apr 11, 2012

The allegation is that Apple has direct control of other retailer's prices through the near-identical contracts being signed with the publishers. This is a big no-no that is being alleged.

Deleted member 42 · Apr 11, 2012

The complaint itself is here: http://lunch.publishersmarketplace.com/wp-content/uploads/2012/04/ebooks04112012.pdf

It is embarrassingly poorly written. It also might as well have Amazon's name on it as the author.

There are a number of problems with the DOJ's understanding of books, ebooks, and publishing.

For instance, they have almost completely left the author out of the equation; they seem to think books involve only publishers, retailers and readers.

And they open up right away with the assertion that:

DOJ said:
Ebooks also are considerably cheaper to produce and distribute than physical (or "print") books.

They are slightly cheaper to produce; say two or three dollars less, depending on the book size and the binding. They usually are cheaper to distribute—that depends very much on the infrastructure though, and things like amortization of extant systems. (Amazon didn't have additional hardware/software/personnel costs at the server level, for instance, only at the customer support level.)

I think John Sargent is doing the right thing.

I wish that publishers had been a bit more savvy, and I wish the DOJ was a little more clueful.

Deleted member 42 · Apr 11, 2012

Xelebes said:
The allegation is that Apple has direct control of other retailer's prices through the near-identical contracts being signed with the publishers. This is a big no-no that is being alleged.

Yeah, that's the Sherman Act at work.

I don't agree with the DOJ's take, however.

GregB · Apr 11, 2012

Medievalist said:
I don't agree with the DOJ's take, however.

Which claim(s), 1-10?

Phaeal · Apr 11, 2012

According to Bloomberg, Simon & Schuster, Hachette and HarperCollins settled their suits today. Whereas Apple and Macmillan have refused to engage in settlement talks and deny they colluded to raise prices for digital books. Penguin Group is also preparing to fight the DoJ in court if necessary.

http://www.bloomberg.com/news/2012-04-11/u-s-files-antitrust-lawsuit-against-apple-hachette.html

DoJ sues Apple, five of Big Six

Torgo

Formerly Phantom of Krankor.

MacAllister

'Twas but a dream of thee

Xelebes

Delerium ex Ennui

Deleted member 42

Deleted member 42

GregB

practical experience, FTW

Phaeal

Whatever I did, I didn't do it.