Publishing/Writing: Insights, News, Intrigue

09/10/2012

DOJ’s E-Book Price-Fixing Case = Publishing Intrigue to the Max


 

Blind Justice

Intrigue, indeed — But, is the whole case based upon misconceived intentions, misunderstanding and misplaced justice?

And, just WHO is to blame for letting this price-fixing debacle spawn into a full-blown clusterfuck?

This insight is provided by Jonathan Berr in InvestorPlace.com :

Publishers Have Themselves to Blame for Amazon’s Triumph

The recent ebook price-fixing settlement clearly proves it

Amazon (NASDAQ:AMZN) CEO Jeff Bezos has won the e-book price wars and will leave his competitors in the dust. The publishers that are complaining now have no one but themselves to blame.

Last week, U.S. District Judge Denise Cote approved a settlement between three U.S. publishers — Hachette Book Group, Simon & Schuster and HarperCollins —and the Department of Justice over allegations that they were in cahoots with Apple (NASDAQ:AAPL) to fix the prices of e-books. Apple and two other publishers, Penguin Group USA and Macmillan, have refused to settle. Their case will go to trial next summer. Officials in the publishing industry, who urged Cote to throw the case against them out of court, were appalled by the ruling.

“To say the least, we are colossally disappointed that the judge failed to understand how consumers will be negatively impacted by a decision that does not take into account the realities of the book business in 2012,” said Oren Teicher, CEO of the American Booksellers Association, in a statement posted on the group’s website.

Indeed, the publishing industry argues that it — not Amazon — is the aggrieved party given the Seattle-based company’s dominant position in the e-book market by selling electronic books below cost. Though their fears were understandable, their solution to it was illegal. It’s not even a close call.

Both Apple and the publishers didn’t want to compete with Amazon’s $9.99 price point for e-books. In 2010, they agreed to switch to a new “agency” model whereby publishers would sell titles directly to the public as opposed to the “wholesale” model, in which electronic books were sold to retailers. Agreements between Apple and the publishers were in place ahead of the 2010 launch of the iPad.

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06/07/2012

DOJ’s Proposed Settlement RE publishers’ Alledged Price Fixing — Right or Wrong?


What about this DOJ settlement, anyway?

The legal department of Barnes and Noble, in a complaint filed with the DOJ today, says the proposed settlement with some of the big six publishers “represents an unprecedented effort” to become “a regulator of a nascent technology that it little understands” — and “the national economy, our nation’s culture, and the future of copyrighted expression” are at stake.

B&N’s legal beagles further state “in essence, the proposed settlement substitutes one alleged cartel for a new cartel on the industry, albeit one run by the [DOJ].”  

, reporting for PaidContent (the economics of digital content), discusses the B&N’s complaint with its accompanying charts and figures: 

B&N: DOJ e-book suit endangers consumers, bookstores and copyrighted expression

In a complaint sent to the Department of Justice this morning, Barnes & Noble says that the DOJ’s proposed settlementwith HarperCollins, Hachette and Simon & Schuster for allegedly colluding to fix e-book prices “represents an unprecedented effort” to become “a regulator of a nascent technology that it little understands” — and “the national economy, our nation’s culture, and the future of copyrighted expression” are at stake. In fact, B&N argues, e-book and hardcover prices have fallen under agency pricing.”

“You’re going to end up having choice control from a server farm in Washington state,” Barnes & Noble’s general counsel Gene DeFelice told me, referring to Amazon.

“In essence, the proposed settlement substitutes one alleged cartel for a new cartel on the industry, albeit one run by the [DOJ],” B&N says. The bookstore chain’s complaint joins others sent to the DOJ during the settlement commenting period, which ends on June 25.

The proposed settlement, B&N says in a brief filed by its in-house counsel and law firm Boies, Schiller & Flexner, “warrants an exacting review because of its potential impact on the national economy and culture, including the future of copyrighted expression and bookselling in general, not only electronic books.” And “many millions of Americans, as well as all levels of the distribution chain for books (from authors to publishers to distributors, and especially brick-and-mortar stores), stand to be affected by this case’s resolution.”

B&N argues that the proposed settlement is a government action “analogous to a cartel imposing a detailed business model on publishers.” It would transform the DOJ “into a regulator” and would “injure innocent third parties, including Barnes & Noble, independent bookstores, authors, and non-defendant publishers; hurt competition in an emerging industry; and ultimately harm consumers.”

The punishment doesn’t fit the crime

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04/24/2012

Digging Further Into the Intrigue RE the DOJ Investigation of the Big Six Publishers


Looking Into DOJ Intrigue

Have you ever asked yourself the question “If the DOJ had evidence against the big publishing houses, why didn’t they indict them criminally instead of just civilly?”

Hmmmm.  

Well, according to a former prosecutor for the DOJ, they could have prosecuted them criminally (seems he had prosecuted successfully on less evidence).

Could it be that some white-collar crimes are treated differently than others due to who is involved? A kind of class privilege pass, so to speak.

Of course this is true ! Especially to those living in the ‘real’ world.

Some intriguing details of this case are offered by former DOJ prosecutor, Carl Steinhouse in Naple News dot com:

The Humorous Side of the Law: No indicting an Apple?

The Department of Justice recently announced that it has sued civilly Apple, Barnes & Noble and a whole bunch of book publishers for conspiring to fix the price of e-books (digital books) to the consumer reader.

The target of this alleged conspiracy was Amazon, which had the temerity to discount e-books down to $9.99 and lower, and often at a loss to itself. This, of course, put competitive pressures not only on Amazon’s competitors having to match Amazon’s low prices, but upon the competitors’ suppliers, the book publishers, to lower their prices as well. This price cutting of Amazon had to go, they decided.

Before the alleged conspiracy, on the sale of an e-book, Amazon would pay the publisher the wholesale price for that title, with Amazon free to charge its customers whatever it wanted. Publishers were unhappy because their other customers, mostly bookstores, were screaming bloody murder about the unfair competition from Amazon. This put a publisher in a quandary. It could, on its own, refuse to sell to Amazon. But just one publisher refusing to deal with Amazon would not make much of an impression on Amazon and that publisher would stand to lose a lot of business from the world’s largest e-book reseller. But if a group of publishers did the same thingnow that would be a different kettle of fish, depriving Amazon of its stock in trade, at least in e-books.

Enter Appleand Steve Jobs. Apple, with its new entry into the digital landscape, the iPad, became part of the equation because it now offered e-books on its devices in competition with Amazon’s Kindle. As we all know, Jobs, may he rest in peace, was no blushing violet and not one to ever sit on his hands and let someone take a bite of his Apple. Apple was not in business to lose money on any of its products, and e-books, in its iBooks store, Jobs determined, were not to be the exception.

According to the Justice Department, Jobs got the publishers and some of Amazon’s competitors to meet in the private dining rooms at upscale New York restaurants and by emails to discuss how to stop Amazon from steeply discounting their e-books on Kindle. The government says the defendants hatched a plan to band together to force Amazon to change from buying under the traditional wholesale pricing to a so-called “agency pricing” where the publishers set the price and pay Amazon and all e-book sellers a 30 percent commission. If all of the major publishers did this, Amazon would be required to raise its price from the $9.99 and lower, that it had been charging.

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