Wednesday, September 19, 2012

The Ebook Settlement

The big news in publishing while I was out last week was Judge Denise Cote's approval of the settlement between the Department of Justice and the three settling publishers (Hachette, HarperCollins, and Simon & Schuster) in the big ebook price-fixing suit.

As always, Publisher's Lunch has done a wonderfully concise job of summing up the legal morass. Here's their summation of some of the judge's pertinent remarks:

"...the judge took respectful note of the many objections filed during the comment period. 'Clearly, this is no ordinary Tunney Act proceeding.... Given the sheer volume of comments opposing entry of the proposed Final Judgment and the significant harm that these comments fear may result, hesitation is clearly appropriate in this case.' Among those comments, she concluded that 'perhaps the most forceful species of criticism leveled at the decree is that it will have manifestly anticompetitive effects. The comments make a variety of arguments along these lines; the gist of their critique, however, is that Amazon was a monopolist engaged in predatory pricing and other anticompetitive practices, defendants’ use of the agency model reduced Amazon’s market share and capacity to engage in these practices, and the consent decree will encourage a return to the anticompetitive status quo.' She rejects these arguments for a variety of reasons, including the reasoning that 'even if Amazon was engaged in predatory pricing, this is no excuse for unlawful price-fixing.'"

Also of note is the fact that early results seem to suggest that ebook prices for these three houses are actually going up after the settlement, rather than down as much of the hoopla around the suit would have seemed to imply would be the case. Of course the real circus will come to town when those who are fighting the suit (the two other "agency" publishers, Penguin and Macmillan, plus Apple) come to trial. 

image source is here

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