Quote:
Originally Posted by VioletVal
The DOJ won't need information from Amazon to enforce breakeven sales. If Amazon sells ebooks at below cost, one of the publishers could file a complaint and provide that information, along with supporting records, to the DOJ.
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First of all, the settlement doesn't prevent Amazon from selling at below cost. It requires that across an entire publisher's line that Amazon at least breakeven. Consequently, Amazon could sell a book at a loss as long as over all of the books by the publisher it sells it breaks even.
Second, how would the publisher know whether Amazon is at least breaking even over its entire line? Amazon changes pricing almost hourly. A publisher would have to have the data to know that Amazon sold x copies at y price, z copies at b price, etc., something no publisher could possibly know. The only way to be certain would be with data from Amazon.
In the absence of agency pricing, publishers would need to return to a wholesale model. Under the wholesale model, Amazon would pay the wholesale price regardless of what it retails a book for. For example, if the wholesale price is 50% of the list price and the list price is $20, Amazon would pay the publisher $10 for every copy it sold regardless of whether Amazon sold 75% of the copies for $1.99 and 25% for $12.
The publishers could not monitor Amazon's sales. There is no way for a publisher to know that during the hours of 7 to 11:59 a.m. Amazon sold 1,000 copies at $1.99 each but that during the hours of 12 noon to 12 midnight it sold 100 copies at $12.49, even though the wholesale price is $10.
Publishers would only know that Amazon sold 1,100 copies at a wholesale price of $10 each.
The information needs to be provided by Amazon, which it won't provide considering it to be a trade secret.