S&S hit with class action lawsuit on ebook royalties

[Froide]

Originally Posted by fjtorres

This particular trick is exactly what Harlequin did to a lot of their authors: they set up a wholly owned subsidiary to buy manuscripts that it then licensed (dirt cheap) to its parent company so they didn't pay royalties on the sale price but on the artificially low license payout. The practice is called self-dealing and is usually but not always illegal.

Should be illegal in this have-your-cake-and-eat-it-too (aka, screw both authors and readers) scenario. If it isn't, then I hope this legal action achieves its desired outcome.

[fjtorres]

Originally Posted by Froide

Should be illegal in this have-your-cake-and-eat-it-too (aka, screw both authors and readers) scenario. If it isn't, then I hope this legal action achieves its desired outcome.

Self-dealing can be legal in cases were the units charge each other fair market rates, say for translation rights. It is not legal when used to artificially lower royalties (Harlequin case).
It is legal but politically charged to do it for tax minimization (done by practically all manufacturing multinationals, especially car companies).

[Froide]

Originally Posted by fjtorres

Self-dealing can be legal in cases were the units charge each other fair market rates, say for translation rights. It is not legal when used to artificially lower royalties (Harlequin case).
It is legal but politically charged to do it for tax minimization (done by practically all manufacturing multinationals, especially car companies).

Regarding the first - LEGALLY PERMITTED transfer pricing - scenario - yes, I'm well aware of this (and even provided oversight for transfer pricing among the various ventures, at a regulated firm I once worked at). It does happen in manufacturing multinationals and in automotive firms (as you pointed out), as well in all vertically integrated, and even horizontally integrated, firms, whether they operated domestically or internationally.

Regarding the second - SEEMINGLY SHADY- scenario - I reiterate my earlier statement, because the self-dealing in this case appears underhanded and may be similar to that in the Harlequin case.

[fjtorres]

Originally Posted by Froide

Regarding the second - SEEMINGLY SHADY- scenario - I reiterate my earlier statement, because the self-dealing in this case appears underhanded and may be similar to that in the Harlequin case.

On the surface the claims sound similar in that writers were "sold a bill of goods" under guise of helping them. But contracts are involved. And old ones at that. The courts will have tbeir say.

This may or not be the best test case of the switch in ebook royalties but the word is out now. Better plaintiffs may emerge. Or other suits.

Plenty of victims out there.

[Nate the great]

There's more to this story than royalties. Apparently S&S isn't the publisher. They sold the book to Wiley way back in 1998.
http://the-digital-reader.com/2016/0...oesnt-publish/