Good rundown by Nilay Patel of the Department of Justice’s antitrust complaint against Apple and seven of the major book publishers.
The high-level idea, that the publishers wanted to move to the agency model (where they could set prices that retailers charge for their books) and that Apple was willing to give them this model shouldn’t be surprising. The question is if they colluded to do this — and Apple’s supposed “most favored nation” clause certainly doesn’t look good.
This case is actually pretty fascinating because had Apple not accepted the agency model to gain some traction in e-books, we’d probably be hearing the publishers complaining to the DoJ that Amazon was using their monopoly in e-books to destroy their businesses.
Instead, Amazon (seemingly) got screwed and was forced accept the agency model as well. The DoJ doesn’t care about that as much as they care about what that means for consumers — higher prices.
Also interesting is that a bunch of the publishers settled right away to get out of this mess. But as Macmillan CEO John Sargent clearly implies in his open letter, that doesn’t necessarily mean that anyone was doing anything wrong, just that the other publishers did not want to bogged down in legal proceedings for months (or years) and pay all the fees associated with fighting the government.
Macmillan will fight this. As will Apple. And a few others.
Amazon is obviously thrilled about all of this. They want to go back to $9.99 e-books.
I’d love that too — all consumers would. But the issue is really the publishers versus Amazon here. They’re (probably rightfully) worried that if Amazon can go back to completely owning the market, there will be no stopping them from say, replacing the publishers outright one day (which they’re already trying to do).
This really seems to be a two-headed coin. Both sides potentially point to antitrust concerns. It’s about figuring out the lesser of two evils. And depending on your vantage point, that changes.
Though that obviously doesn’t excuse collusion, if it happened.