walkitout (walkitout) wrote,
walkitout
walkitout

Rumors about the Justice Department and the Agency Model

http://www.reuters.com/article/2012/03/08/us-apple-ebooks-idUSBRE82715J20120308

I recognize there's a lot of loose talk about how Amazon is a monopoly and how if we let them control, well, everything, then, well, bad things might happen. More specifically, the idea seems to be that if we pay cheap prices for stuff at Amazon now, then everyone else will go out of business and Amazon will charge us more later. So to avoid that Dread Fate we should, I guess, pay more for things now.

Or something involving ePub as a standard. I don't really understand it all.

The iPad -- when it was still a har de har har terrible name choice and not the subject of a massive trademark dispute involving the seizure of goods in China -- was released along with the iBookstore, and with that came the "Agency Model" of pricing. That is, instead of companies buying books and then selling them for whatever the heck they felt like selling them for, companies took delivery of books which still belonged to the publisher and sold them on a consignment model in which the publisher set the price and the "retailer" took specified cut (in this case, 30%).

When this happened, there was much ha ha we showed them/Apple will save the publishing industry and other loose talk, also, a disagreement between Amazon and Macmillan that resulted in Macmillan books (p-form and e-form) not being available for sale for a brief period of time on Amazon.

Along with the other talk, there were people commenting that the behavior of Apple and 5 of the Big 6 publishers looked kinda illegal, specifically, it looked like collusion with the goal of raising prices, which might be monopolistic.

The Wall Street Journal seems to be the main source for the current rash of articles suggesting that US and European regulators are contemplating taking action. Needless to say, no one is commenting officially, with their names attached, altho there is a consolidated class action suit in progress as well. Coverage at WSJ is by Thomas Catan and Jeremy Trachtenberg and appears not to be behind a paywall.

http://online.wsj.com/article/SB10001424052970203961204577267831767489216.html

The Justice Department didn't limit itself to the price issue, however. "Among the issues that the Justice Department has examined is the effort by three publishers involved in the probe to "window" e-books in late 2009, according to people familiar with the matter."

I wish I hung out with someone who was going to the cocktail parties where this stuff was being dished. Trying to decipher this kind of coverage from afar is so uncertain.

ETA: As usual, Nate's commentary is worth reading:

http://www.the-digital-reader.com/2012/03/08/doj-anti-trust-lawsuit-against-price-fix-6-only-bewnefits-amazon/
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