Here’s one from the “not exactly a surprise” department. Barnes & Noble has filed a 26-page legal brief (PDF) commenting on the proposed antitrust settlement between the Department of Justice and the Agency Five publishers. Obviously, they’re against it.
B&N says that the government is setting itself up to be a regulator of a market it does not understand, and that it is implementing controls on that market rather than punishing the alleged wrongdoers. B&N feels that if the DoJ wants to end collusion, it should forbid collusion, not forbid the publishers from entering agency price agreements (that are legal in and of themselves) for two years.
The filing includes charts purporting to show that e-book prices have actually fallen overall since the introduction of agency pricing, and that hardcover retail prices have also fallen. And it says that the DoJ’s settlement will lead to lower and higher e-book prices—lower in the short term as Amazon again forces the prices below cost, then higher after competition with Amazon is decreased.
It’s all pretty much what you’d expect Barnes & Noble to say, and doesn’t really change much in the end. I expect we’ll know more after the next hearing, scheduled for June 22nd.
(Found via Ars Technica & paidContent.)
You shouldn’t be so dismissive of B&N’s arguments. Seeing David Boies name on the brief gives it a lot of credence. I grant that I happen to agree with B&N.
One thing that is constantly overlooked in discussions about the law suit is what is the likelihood that the court will impose the no agency sanction on just a handful of competitors? My experience from many years ago as a practicing lawyer and having done antitrust work is that the court is more likely to demand increased fines as punishment for the collusion and not approve the agency restrictions because (a) agency pricing is legal and (b) imposing it on just 3 or 5 publishers would place them at a competitive disadvantage against other pbulishers. Remember that the only ones who can be bound by any settlement or court decision are the parties themselves. Smashwords and Random House, to name just 2, would be free to continue agency pricing.
And B&N legitimately questions whether the DOJ is capable of monitoring the terms of the proposed settlement. For example, how will DOJ get the data from Amazon to detrermine that Amazon is not losing money over a publisher’s line? Amazon is not a party to the lawsuit and cannot be forced to provide such information.
There are lots of problems with the proposed settlement as surface appealing as it may appear.
If B&N are so eager to provide data, why don’t they provide Fictionwise sales data before and after the agency pricing conspiracy?
Many thanks to Richard Adlin for sharing his legal expertise. I particularly appreciate his pointing out that those who’re not a party to the dispute cannot be bound by it. (Other than, I might add, by the fear that the DoJ might also go after them.)
That matters a lot. In general, the DoJ’s actions seem almost custom tailored to benefit Amazon in its drive to control the ebook market. The only exception was the requirement that online stores could sell some ebooks below cost only as long as they were making a profit on that publisher’s entire line of books. That, I thought, would mean that notable tightfisted-with-sales-data Amazon would have to open up its ebook-by-ebook sales figures. Not so, suggests, Mr. Adin:
“For example, how will DOJ get the data from Amazon to detrermine that Amazon is not losing money over a publisher’s line? Amazon is not a party to the lawsuit and cannot be forced to provide such information.”
That’s a killer of a comment. Apple, with 0% of the market at the time of the alleged infractions, would have to open up detailed ebook-by-ebook sales figures to competitors, while Amazon, which had 90% of the ebook market at that time, would not have to reveal any such data, “not being a party to the lawsuit.” The one and only aspect of the DoJ’s action that I thought was to Amazon’s disadvantage turns out to be not so.
Like I’ve been saying, it looks suspiciously like the covert purpose of this legal attack is to damage Amazon’s largest competitor, Apple’s iBookstore, and weaken loosely coordinated efforts by major publishers to prevent Amazon from using predatory pricing to take over the ebook market. In my book, the Big Six ought to be commended for acting to weaken Amazon’s market dominance rather than punished. A DoJ genuinely acting in the public interest would be going after Amazon and not Apple.
A little background. I was heavily involved in efforts to stop the Google Book Settlement, particularly the forced opt-in clauses. I followed it closely and discovered that one of the chief factors in the judge’s anti-opt-in decision were all the authors who wrote the court criticizing the settlement and explaining why it was wrong.
I suspect we need to do the same with this dispute. Agency pricing is so popular among authors and small publishers, that Smashwords was pushed into revising its contracts to establish agency pricing terms. If the judge in this dispute receives hundreds of letters in favor of agency pricing from little-known authors, any DoJ claims that agency pricing was an evil conspiracy manufactured by the Big Six publishers will go out the window.
All it takes is a letter to the judge explaining your point of view.
Uhh. Apple’s iBookstore is Amazon’s LARGEST COMPETITOR??? Since when?
I really find this nonsense about the action of DoJ being in Amazon’s favour a complete hoot. I see no evidence whatsoever of that.
I find the DoJ action against those who settled quite bizarre and unlikely to be upheld by any court in the US. As others have stated, it interferes in Agency pricing without even determining it to be illegal. It then forces Amazon to raise their prices without them being part of the complaint.
As someone outside the US I have always spectated on the US DoJ as an enormous arrogant bully that enjoys exercising it’s excessive powers to act like it is the law, instead of being there to uphold the law. This is no different.
Those publishers who settled did out of fear, not out of knowing they were wrong and the punishment is fair.
QWhenever this case comes to court I believe the whole thing will go in completely different directions. However I also don’t believe a word of the tosh spouted by B&N, in their defense and characterisation of the industry etc, in their above filing.