WSJ: U.S. Warns Apple, Publishers: Justice Department Threatens Lawsuits, Alleging Collusion Over E-Book Pricing
Thanks to one of my most reliable readers, who gave me the heads-up to this story in a private e-mail (if you’d like credit, just let me know):
It talks about inside sources saying the the DOJ (Department of Justice) is letting Apple and five publishers (the five that initially agreed to the Agency Model) know that they will take legal action against them for collusion if a settlement can’t be reached.
I thought the Agency Model might go away in this way in 2011, and obviously, I was wrong about that.
This article by Thomas Catan And the ever reliable Jeffrey A. Trachtenberg does a good job of summing up the situation.
The publishers have to decide if it’s worth getting into a public legal case, or just dumping the Agency Model (or seriously modifying it in some way).
They don’t love the Agency Model anyway. Pricing is hard. The Agency Model has only given them bad will with the serious book buyers. iBooks has not been a success (so they don’t have to fear Apple’s power as much), and the person who allegedly…guided the Agency Model for e-books isn’t part of the situation any more.
I’m thinking this does settle out of court. That doesn’t immediately mean lower e-book prices…nothing forces the prices to be as low as Amazon had been setting them in the beginning.
You might be wondering why Random House (which joined the Agency Model in 2011) isn’t mentioned in the article as part of it. The wheels of the Department of Justice turn slowly, for one thing…Random House could be in it later. Also, the charge is collusion: The other five all had the same action at the same time…Random House was almost a year later.
Could the publishers win this? The defense would have to be that Apple suggested the idea to each publisher individually and they all agree to it, without consulting with each other. That’s one possibility, and that has to do with price-fixing. However, there are other anti-competitive charges that could be involved, as I understand it.
I just don’t see the publishers fighting this in court. Even if you think what they did with the Agency Model is fine, I don’t see it being worth a public trial.
My feeling is that the Agency Model, at least as we know it, will be over in the USA this year.
I’ve been wrong before, though. 🙂
I strongly suggest you read the article.
This post by Bufo Calvin originally appeared in the I Love My Kindle blog.