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And Now For Something Completely Different

Anti-Trust Suit Against Ebook Publishers That Aren’t Amazon Announced; Amazon Immediately Lowers Ebook Prices


Just a month ago we were talking about the shady things Amazon.com does to use its 60% of the ebook market muscle to make smaller publishers lower prices against their better judgement. We were also talking about how the US Department of Justice had announced that it would be investigating six of Amazon’s competitors in ebook publishing (Apple, Simon and Schuster, Hachette Book Group, the Penguin Group, Macmillan, and HarperCollins) for colluding to set prices in the ebook market. Well, it only took about a month for the DoJ to announce that they had indeed found, in their opinion, enough evidence to prove that the six were trying to fix prices. And it took less than a day for Amazon.com to, seemingly coincidentally, announce plans to push down pricing on its ebooks, from $15 to $10 in some cases.

Needless to say, this is making everybody but Amazon nervous. From the New York Times:

Amazon, which already controls about 60 percent of the e-book market, can take a loss on every book it sells to gain market share for its Kindle devices. When it has enough competitive advantage, it can dictate its own terms, something publishers say is beginning to happen.

The online retailer declined to comment Wednesday beyond its statement about lowering prices. Asked last month if Amazon had been talking to the Justice Department about the investigation — a matter of intense speculation in the publishing industry — a spokesman, Craig Berman, said, “I can’t comment.”

The DoJ’s case against the six retailers, begins with Apple’s original rules for publishing on their iBooks platform: that anyone who publishes there cannot publish for other eReader formats at a price lower than what is charged on Apple’s devices, where Apple takes 30% of the cut. Half of the companies involved, HarperCollins, Hachette, and Simon & Schuster, have settled with the Department of Justice already, with Apple, Penguin, and Macmillan staying in for the long haul.

Of course, it’s all bad for sellers of actual books. If the six retailers were working in concert to raise prices in violation of law, that was actually good for them, lessening the competition for sales of their own books. If the six get split up under anti-trust law, the whole ebook market might have to lower prices in order to compete with Amazon, the two-thousand pound gorilla.

(via The New York Times.)

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  • Anonymous

    See.  When I heard about this, it all sounded too much like the government actually looking out for the regular folk, and I knew I must be missing something.  Thanks for clearing this up for me.

  • http://twitter.com/invalidname Chris Adamson

    Publishers were eager to see Apple succeed because they’re terrified of Amazon: http://www.npr.org/2012/01/23/145468105/publishers-and-booksellers-see-a-predatory-amazon .

    And rightly so. It’s not just about prices, it’s about policy. Amazon has already shown it’s willing to retaliate viciously; when publishers didn’t go along with Amazon’s below-cost pricing for eBooks, Amazon pulled their paper books from the store. And if Amazon dominates eBooks — as they likely will without competition from Apple (Nook and Google Books are non-factors at this point) — then you have to worry about what they’ll do with that dominance. Just last month, Amazon kicked out Digital Manga Publishing, which publishes yuri / BL manga, and only restored them after an online uproar. [ http://www.themarysue.com/is-manga-obscene-canada-and-amazon-seem-to-think-so/ ]

    Apple’s no saint… which means it’s an ideal foe to keep Amazon from rolling over us.

  • Frodo Baggins

    I’m honestly considering quitting Audible here. That is a major dick move.

  • http://vita-ganieda.livejournal.com/ Ganieda

    Here’s a cogent (and entertainingly apocalyptic) take on this from the owner of a small press:

    http://mrzine.monthlyreview.org/2012/milligan130312.html

  • http://twitter.com/sanguinepen Lee Jay Stura

    Sorry people, but I think it was ridiculous to charge more for the Kindle book than the paperback. Lowering the prices will cut down on piracy. I know I’ll buy more books for my Kindle if I’m not trapped into paying so much. 

  • David Ouillette

    While I understand your concerns about Amazon in the future, is the only alternative to accept getting screwed by Apple? 

  • John Wao

    I still prefer my books in the paper format. I get mine through the various book clubs I’m a member of.

  • Lucas Picador

    Digital media (books, music, video) are grossly overpriced right now. Ten dollars for an ebook version of a novel that sells in stores for not much more than that in paperback is absurd. It’s high time the DoJ started looking at this issue… I just hope they don’t stop with the ebook market, but start turning their attention to the various music and film industry groups in their roles as price-fixing cartels.

  • Anonymous

    And this would be perfectly fine by me IF I could read kindle books on my Sony Reader. I still don’t understand why they don’t sell alternate formats of their books. If they did, I don’t think I’d buy my ebooks anywhere else. 

  • Anonymous

    Amazon gives authors better royalties, and more control of their product.  They have been begging publishers to lower the prices on their ebooks.  This article is junk.  The only people being hurt by amazon when it comes to ebooks is the publishing companies, who are apparently the only corporation people want to see gouge their customers and collude on pricing. I don’t understand why publishers get this treatment, we all rejoiced as the music industry burned and we ended up with DRM free .99 cent songs which were a win for EVERYONE, but some how publishers aren’t just as bloated and useless.

    Publishers have been raping authors for 100′s of years.  Let them die a painful death.

  • Anonymous

    Publishers have been raping authors for 100′s of years.

    Pretty sure publishers haven’t been systematically sexually assaulting authors for any period of time.  Don’t use the word ‘rape’ out of context.  You’re minimizing a violent sexual crime when you do so.

  • Robyn Richardson

    Because no one seems to understand or is willing to find out how this actually works, here’s an easy article to bring yourself up to speed:
    http://news.cnet.com/8301-1023_3-57412587-93/why-e-books-cost-so-much/Also, this is not about piracy, this is about fair market share, preventing monopolies (I’m looking at you Amazon), and competitive business practices.  

  • Robyn Richardson

    Let me fill in a few holes in your statement: Amazon is hurting more that just the publishers (who they’ve been bullying for quite some time now)–they’re forcing a monopoly in the book selling industry and pushing out the independent bookstores (that have knowledgeable, hardworking, and caring staff).  You do not seem to understand how collusion works; the agency model is a business model, not price fixing. And your reference to the recording industry is moot because we still have DRM all over the place! Do some research before you so blatantly shit all over this issue.

  • http://vita-ganieda.livejournal.com/ Ganieda

    Amazon’s treatment of its authors is erratic at best, and if they secure a monopoly I guarantee it won’t improve. Their percentage royalties tend to be better by comparison then those offered elsewhere, but they pay off of sale price, not list price, and reserve the right to change those prices whenever they want. Combined with their platform policies, no, they really, really don’t give authors more control. Meanwhile, Amazon’s bullying attitude towards distributors and small presses is extremely damaging to authors and isn’t doing customers any favors. The DOJ case is flawed in its reasoning and alarming in its implications. And there is no centuries long campaign of sexual assault against authors by their publishers. 

  • Tromeritus Rex

     Quite. I’m not understanding the outrage, at least from a consumer standpoint. There’s no literal monopolizing going on. If you want to compete while still charging more, offer something *different* or better than Amazon. Secure exclusive interviews, author notes, whatever.

    I don’t believe regular books should go for lower than $10, but I’m also opposed to prices as high as the actual paperbacks/hardcovers for no added benefit (aside from less clutter).