walkitout (walkitout) wrote,
walkitout
walkitout

Debunking debunkery: a crucial error in a Publishers Lunch post about settling defendants time frame

I previously blogged about the Hachette Amazon Thing.

http://walkitout.livejournal.com/1129808.html

I asserted: "The group of publishers did not have precisely the same time frame when they could begin to demand that retailers accept the agency model -- Hachette came up first and this is likely to be the cause of the current, ongoing dispute with Amazon."

Over at Publishers Lunch, this idea is debunked (h/t Nate, over at The Digital Reader):

http://lunch.publishersmarketplace.com/2014/06/getting-things-straight-two-wonky-important-hachettesettlement-things-people-get-wrong/

The settlement to which I pointed in my earlier post, http://www.justice.gov/atr/cases/f286800/286808.pdf, does not mention anything about staggered anything, so I agree that was an error in what I wrote.

However, Michael Cader introduces a new error:

"To review, the court did not approve the settlements with the first three publishers until September 6, 2012 -- so those conditions apply at least until September, 2014. The exact expiration depends on contractual processes under the settlement that have not been confirmed publicly. Based on when each publisher moved to Agency Lite pricing in the marketplace, the working expectation is that Harper will be the first to come out of the restrictions, in early September, following by Hachette and then Simon & Schuster, both in early December. The separate settlements for Macmillan and Penguin Random House specifically indicate those two companies are free of the agency restrictions on December 18, 2014."

In the DOJ settlement to which I link above and in my original piece, the language is unambiguous. "For two years after the _filing_ of the Complaint, Settling Defendants shall not enter into any agreement with any E-book Retailer that restricts, limits, or impedes the E-book Retailer from setting, altering, or reducing the Retail Price of one or more E-books, or from offering price discounts or any other form of promotions to encourage consumers to Purchase one or more E-books."

My emphasis on _filing_ of the Complaint, NOT date of the settlement -- Cader made that mistake when he asserted the two years would run from the approval of the settlement plus two years. He is correct in noting that the exact expiration is subject to the contract between the publisher and the retailer -- we don't know what dates that covered; one would expect the publisher to be smart enough to have it run out right when they could earliest restrict the retailers from controlling the price, but, you know *shrug*.

On the one hand, I'm being picky about someone who noticed an error that I, along with many other people, made (I'm sure Cader has no mortal clue who I am -- he's responding to other coverage). On the other hand, this date error (two years after the settlement vs. two years from the filing of the complaint) does have an impact on his conclusion, which is the whole point of his piece:

"So any idea that HBG is trying to "force" Amazon back to full agency now, which also appears in various articles and blogs, must be wrong. They are not currently permitted to do that under the consent decree."

Ooops. All in all, I'm pretty sure this is a more serious error than thinking the publishers are staggered.

ETA: from the beginning of the Final Judgment As To Defendants Hachette, Harpercollins, and Simon & Schuster, the date the complaint was filed is given as April 11, 2012, so that plus two years yields April 11, 2014.

ETAYA: Oh, actually, there is a staggering on the page before what I quoted. The publishers get to each pick separately the start date on a separate 2 year period and they have a choice.

"For two years, Settling Defendants shall not restrict, limit, or impede an E-Book Retailer's ability to set, alter, or reduce the Retail Price of any E-book or to offer price discounts or any other form of promotions to encourage consumers to purchase one or more E-books, such two year period to run separately for each E-book Retailer, at the option of the Settling Defendant, from either: 1. the termination of an agreement between the Settling Defendant and the E-book Retailer that restricts, limits, or impedes the E-book Retailer's ability to set, alter, or reduce the Retail Price of any E-book or to offer price discounts or any other form of promotions to encourage consumers to Purchase one or more E-books; or 2. the date on which the Settling Defendant notifies the E-book Retailer in writing that the Settling Defendant will not enforce any term(s) in its agreement with the E-book Retailer that restrict, limit, or impede the E-book Retailer from setting, altering, or reducing the Retail Price of one or more E-books, or from offering price discounts or any other form of promotions to encourage consumers to Purchase one or more E-books."

I don't think we can know with certainty when Hachette (or any of the other publishers) sent such a letter, which is presumably what they decided to do. Earlier versions of the Final Judgment started to appear with the filing of the original complaint, and contained the same language (two years, starts from the agreement ending/the letter being sent); it is reasonable to believe that the publishers would have sent this letter not any later than this, because it was pretty clearly going to be Part of the Deal and doing it sooner started the clock sooner.

Again, we don't really _know_ because we don't know what the publishers actually did. Cader's attempt to use this agreement to prove that full agency cannot currently be on the table fails. But he _is_ right about the lack of explicit staggering in this agreement.
Tags: e-book coverage
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