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Originally Posted by Elfwreck
Yes they would. Settlements save time & taxpayer money, and are *often* used in cases of "we know we have you pinned; would you like to cut down on the expense of a trial and the randomness of a judge's assigned penalties, and make a deal with us for reasonable penalties?"
No. But agreements all entered at the same time, among supposed competitors, who made public statements that the public was getting things too cheap--not too cheap for them to make a profit, just too cheap for them to be comfortable with the sales--is evidence of collusion. The combination of "we want to raise prices for the end user" (which was publicly stated, more than once) and the change of an entire business model to support the forced higher prices, is also evidence.
It's not proof, hence the investigation.
Feel free to give examples of other industries working together with a supplier to change their business model in order to raise end-user prices.
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I think that its important to go over what actually happened when agency pricing was inntroduced, rather than the myth of what happened.
1. In January 2010 or thereabouts, Steve Jobs suggests to the publishers that they adopt agency pricing.
2. In February 2010, one of the Big Six companies announces that it will adopt the agency pricing model.The CEO, John Sargant, goes to Seattle to discuss terms with Amazon. In a letter, he sets out what happened:
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This past Thursday I met with Amazon in Seattle. I gave them our proposal for new terms of sale for e books under the agency model which will become effective in early March. In addition, I told them they could stay with their old terms of sale, but that this would involve extensive and deep windowing of titles. By the time I arrived back in New York late yesterday afternoon they informed me that they were taking all our books off the Kindle site, and off Amazon. The books will continue to be available on Amazon.com through third parties.
I regret that we have reached this impasse. Amazon has been a valuable customer for a long time, and it is my great hope that they will continue to be in the very near future. They have been a great innovator in our industry, and I suspect they will continue to be for decades to come.
It is those decades that concern me now, as I am sure they concern you. In the ink-on-paper world we sell books to retailers far and wide on a business model that provides a level playing field, and allows all retailers the possibility of selling books profitably. Looking to the future and to a growing digital business, we need to establish the same sort of business model, one that encourages new devices and new stores. One that encourages healthy competition. One that is stable and rational. It also needs to insure that intellectual property can be widely available digitally at a price that is both fair to the consumer and allows those who create it and publish it to be fairly compensated.
Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set the price for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.
The agency model would allow Amazon to make more money selling our books, not less. We would make less money in our dealings with Amazon under the new model. Our disagreement is not about short-term profitability but rather about the long-term viability and stability of the digital book market.
(snip)
All best,
John
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Amazon did indeed take down Macmillan's books, igniting a firestorm. After a few days, Amazon backs down and then four of the Big 6 conclude agency pricing agreements with Amazon on the same terms as Macmillan. The biggest publisher, Random House, sat on the side lines for a year before joining the rest of the Big 6.
When you describe the actual process of the implementation of agency pricing, instead of the the Mobile read version where five publishers move in lockstep to directives from Cupertino , then the case for conspiracy looks less compelling.