U.S. Justice Dept. to Sue Publishers, Apple, for Price Collusion?

[charmian]

http://online.wsj.com/article/SB1000...767489216.html

WSJ reports that the U.S. Justice department may sue Apple and five publishers for violating antitrust laws.

[SeaKing]

Makes my heart glad!

[FizzyWater]

One idea floated by publishers to settle the case is to preserve the agency model but allow some discounts by booksellers, according to the people familiar with the matter.

I'm trying to figure out how this works...if they say "you can discount The Help for 25%", isn't that still agency pricing? It's like when the agency sets a sale price of 1.99 or 2.99 to get you to buy the first book in the series.

[HarryT]

Originally Posted by FizzyWater

I'm trying to figure out how this works...if they say "you can discount The Help for 25%", isn't that still agency pricing? It's like when the agency sets a sale price of 1.99 or 2.99 to get you to buy the first book in the series.

As you rightly say, Agency publishers already can - and do - discount books.

[carpetmojo]

Originally Posted by FizzyWater

I'm trying to figure out how this works...if they say "you can discount The Help for 25%", isn't that still agency pricing? It's like when the agency sets a sale price of 1.99 or 2.99 to get you to buy the first book in the series.

It would seem all they would be doing here would be simply setting a "minimum price" - as you say, amounts to the same thing.
And I just wonder if prices might just creep up, only a little, of course - just enough, coincidentally, to make up for any possible reduction in profit ?

No, sorry, I'm being far too cynical.............

[xg4bx]

Originally Posted by carpetmojo

It would seem all they would be doing here would be simply setting a "minimum price" - as you say, amounts to the same thing.
And I just wonder if prices might just creep up, only a little, of course - just enough, coincidentally, to make up for any possible reduction in profit ?

No, sorry, I'm being far too cynical.............

not cynical, completely 100% realistic. thats exactly what would happen.

[fjtorres]

One item that caught my eye:

isn't the first time the Justice Department has taken action against Apple for allegedly colluding with other companies. In 2010, several technology companies agreed to settle Justice Department allegations that they colluded to hold down wages by improperly agreeing not to poach each other's employees.

The evidence that surfaced in that case, as well as an ongoing private class-action lawsuit that followed, showed Mr. Jobs as a prime mover behind that antipoaching agreement. Apple didn't admit to any wrongdoing.

Also of interest:

A second publishing executive said that "a settlement is being considered for pragmatic reasons but by no means are we close." This person said that there are significant legal costs associated with the probe. "You have to consider a settlement, whether you think it's fair or not," the person said.

No. Kidding!
A settlement keeps DOJ findings out of the public record where they could be fodder for the ongoing Class Action Suits.

As to what form a watered-down Agency Model might take, it might allow for loyalty program discounts and retailer discount coupons so the book price would stay fixed but vendors could run full-store discount sales. (20% off on any ebook over $9.99, for example)

One advantage for Publishers that settle before the formal lawsuit is filed is that they can shift the onus on their partners that *don't* settle or Apple. However, it also weakens their case before the EU. Heh-heh. I rather hope they don't so the facts become public.

Oh, and note that Random House is not one of the 5 being sued.
So, by waiting a few months to join the Scam, they got most of the benefits of price fixing but put enough daylight between them and the other conspirators to avoid the Antitrust batle. Their lawyers earned their keep there.

[stonetools]

The DOJ has been investigating the agency pricing agreement for some time. The reason why they haven't taken legal action, IMO? Because they realize that undoing agency would hand the ebook retail market to Amazon on a silver platter. They would be creating more work for themselves ( future action vs Amazon) if they just undid the agency model.
I'm thinking that they may end up leaving agency in place, but remove any terms favorable to Apple. Whatever the DOJ does , it's going to take Into the account the publisher's stated goal of preserving a diversity of ebook retailers.

[HarryT]

The European Commission is also currently investigating the issue of eBook pricing.

[JeremyR]

I doubt much will come of this, that's what political fundraisers are for. That got the government off of Google's back...(when they stole people's info while doing street view? It's illegal to grab that from people's wireless, passworded or not. Unless you are Google...)

[fjtorres]

Originally Posted by JeremyR

I doubt much will come of this, that's what political fundraisers are for. That got the government off of Google's back...

...and got them on Microsoft's in the first place.
(shrug)
The question is who paid off the most politicians. If it's gotten this far odds are the Publishers got out-lobbied.

[markbot]

I wouldn't be surprised if the publishers settle or they out right lose this case.

I thought in Europe that they like agency pricing on books...keeps the Mom & Pops alive since there can't be discounting.

I stopped buying ebooks unless they are really cheap. I use my Kindle to read digital library books and out of copyright content only, for the most part. I stopped buying books in general...I just go to the library now.

[djulian]

Came to post the article, see that I'm a bit late on the draw. Either way, I'm happy about this development.

[GeoffC]

BBC web link to the same story .... http://www.bbc.co.uk/news/technology-17300074

[GeoffC]

Consumer affairs magazine Which has just realised there is an issue of transfer of ebooks as part of a person's estate - neither Apple nor Amazon have confirmed what happens - citing the fall-back that we don't really own ebooks, just 'rent' them ....