Bloomberg: “U.S. files antitrust suit against Apple, publishers”
More on this later, but according to this
the Department of Justice has filed suit against Apple and the “Agency 5″ publishers (Hachette, Penguin, HarperCollins, Sinon & Schuster, and Macmillan) over the Agency Model.
We’ll probably see the filing shortly, and I’ll update this later today.
Update: here is a
with more good information. According to the article, Hachette, Simon & Schuster, and HarperCollins
“…agreed to terminate their agreements with Apple regarding e-books and refrain from limiting any retailer’s ability to set e-book prices for two years. That could help Amazon.com Inc. AMZN +0.93% resume deep discounts on new e-books.”
We may see the “This price set by the publisher” warnings go away very quickly.
I don’t think we’ll see a dramatic quick lowering of the New York Times bestseller hardback equivalents across the board to $9.99. I do think we’ll see those former Agency Model publishers’ books included in sales, and prominently.
Could this be a negative impact for independently published books? Perhaps…price might be less of an advantage for them, and if the Big Six has books in the promotions in the same way the indies do, that muddies the water.
The WSJ also nicely provided this
I’m looking forward to reading it.
Update: here are some sections that are catching my eye in the government filing:
“Publishers saw the rise in e-books, and particularly Ama zon’ s price discounting,
as a substantial challenge to their traditional business model. The Publisher Defendants feared
that lower retail prices for e-books might lead eventually to lower wholesale prices for e-books,
lower prices for print books, or other consequences the publishers hoped to avoid. Each
Publisher Defendant desired higher retail e-book prices across the industry before “$9.99″
became an entrenched consumer expectation. By the end of 2009, however, the Publisher
Defendants had concluded that unilateral efforts to move Ama zon away from its practice of
offering low retail prices would not work, and they thereafter conspired to raise retail e-book
prices and to otherwise limit competition in the sale of e-books. To effectuate their conspiracy,the Publisher Defendants teamed up with Defendant Apple, whichshared the same goal of restraining retail price competition in the sale of e-books.”
“As Apple CEO Steve Jobs described his company’sstrategy for negotiating with the Publisher Defendants, “We’ll go to [an] agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.”"
“Plaintiff United States ofAmerica brings this action pursuant to Section 4 ofthe
Sherman Act, 15 U.S.C. § 4, to obtain equitable r e l i e f and other r e l i e fto prevent and restrain
De f endant s ‘ viol a t ions of Se c t ion 1 ofthe She rman Act, 15 U.S.C § 1.
19. This Court has subject matter jurisdiction over this action under Section 4 ofthe
Sherman Act, 15 U.S.C. § 4, and 28 U.S.C. §§ 1331,1337( a ) , and 1345.”
“Beginning no later than September 2008, the Publisher Defendants’ senior executives engaged in a series ofmeetings, telephone conversations and other communications in which they jointly acknowledged to each other the threat posed by Amazon’s pricing strategy and the need to work collectively to end that strategy. By the end ofthe summer of2009, the Publisher Defendants had agreed to act collectively to force up Amazon’s retail prices and thereafter considered and implemented various means to accomplish that goal, including moving under the guise of a joint venture.”
“In September 2008, Penguin Group CEO John Makinson was joined by Macmillan CEO John Sargent and the CEOs ofthe other four large publishers at a dinner meeting in “The Che f s Wine Cellar,” a private room at Picholene. One ofthe CEOs reported
that business matters were discussed.”
“All five Publisher Defendants agreed in 2009 at the latest to act collectively to raise retail prices for the most popular e-books above $9.99. One CEO of a Publisher Defendant’s parent company explained to his corporate superior in a July 29, 2009 e-mail message that “[i]n the USA and the UK, but also in Spain and France to a lesser degree, the ‘top publishers’ are in discussions to create an alternative platform to Amazon for e-books.”
“The executive in charge ofApple’s inchoate e-books business, Eddy Cue, telephoned each Publisher Defendant and Random House on or around December 8, 2009 to schedule exploratory meetings in New York City on December 15 and December 16.”
As I would expect with the DoJ filing suit, it sounds like they have evidence of a collusion. They probably have call logs and such.
This post by Bufo Calvin originally appeared in the I Love My Kindle blog.