The Department of Justice recently filed a motion
asking that its settlement with Hachette, HarperCollins, and Simon &
Schuster in its e-book pricing lawsuit be approved in federal court. No surprise there.
If accepted, sometime around the middle of September,
retailers will be able to set their own prices for e-books, at least from the
three publishers in the settlement. The
settlement allows the agency-pricing model that came under DOJ scrutiny to
remain, but the provisions of the settlement make anything resembling the
current agency model highly unlikely.
While the settlement allows retailers to set the sales
prices, publishers can prohibit discounts on their books. That provision comes
into play when the total sales of a year exceed the margin the retailer has
earned, according to an analysis of the agreement in The Shatzkin Files.
However, the article also points out how easily that discount
prohibition may be sidestepped. For instance, a retailer such as Amazon may choose
to cut e-book prices way below its costs during a specific time frame, such as
the upcoming holiday season, figuring to make up the margin over the next nine
months. In the meantime, other publishers who may still be clinging to the
agency-pricing model may have to lower its prices just to stay competitive.
Which is exactly what many in the bookselling industry
feared all along.
