Then on April 18, the Toronto Globe & Mail reported a class action suit is being filed in
British Columbia charging Apple, the publishing
companies, and their Canadian subsidiaries of fixing e-book pricing.
The complaints have caused a predictable stir
around the industry. Some argue that agency pricing forces consumers to pay
more for their e-books than necessary. Others claim the pricing model actually
created competition and the DOJ move only makes it easier for Amazon to finish
off its opposition, namely the other publishers and booksellers big and small.
Amazon has been pretty quiet about the whole
thing, although it has announced a new round of aggressive price cuts on e-book
titles. That has many predicting a new round of doom-and-gloom for booksellers,
as well as the suggestion it might ultimately lead to a DOJ investigation into monopoly
claims against the retail giant.
The really
interesting twist to the current debate is experts saying Apple will likely win its part of the case.
“The case against Apple will be more difficult to prove
given that Apple was a new competitive entrant into that market and was trying
to find a way to compete with a dominant market player, Amazon,” attorney David
Vance Lucas told MacNewsWorld. “Apple’s
attempt to enter the market actually was pro-competitive, long term.”
Apple also appears
to have legal precedents on its side and wants its day in court. The DOJ had to admit its 1982 antitrust
case against IBM was “without merit” and federal appeals courts ruled against
the DOJ when it tried to use antitrust laws to split Microsoft into two
companies.
“The DOJ knows its case is not a slam-dunk,
so, all things being equal, might very well prefer not to go to court, so you
would expect there to be continued discussions between the holdout publishers,
Apple and the DOJ over terms of settlement they could all accept,” said
Geoffrey Manne, executive director of the International Center for Law and
Economics.
One question remains: What does this all mean
to the average reader?
First, e-book readers will likely see lower
prices, but probably not until June, the earliest that the DOJ settlement with
Simons & Schuster, Hachette, and HarperCollins can go into effect,
according to an article in paidcontent.org. In
addition, all the legal sparring does not mean an end to agency pricing because
the model was not declared illegal, just the way it was created.
