Feeds

US Justice Dept rejects criticisms of ebook settlements

Apple and hundreds of other complainants are wrong

Top 5 reasons to deploy VMware with Tegile

The US Department of Justice has hit back at criticisms of its ebook case against Apple and five major publishers, saying its critics either don't understand or are just looking out for themselves.

The DoJ filed a case in April accusing Apple and five publishing houses of colluding on ebook prices in their attempt to counteract the growing dominance of Amazon in the market.

Three of the publishers have already settled the case, agreeing to rip up the contracts that contained agency agreements between themselves and Apple, thus once again allowing retailers to discount books as much as they want and ditch most-favoured nation clauses.

The agency model, not in itself illegal, was at the heart of the DoJ's concerns. Under those contracts, publishers set the price for ebooks and retailers take a percentage. Before Apple came on the scene, publishers sold their ebooks at a wholesale price and the retailers were the ones who priced them, allowing Amazon to sell ebooks at cost or below cost in order to shift its Kindle readers.

The DoJ claimed that Apple and the five publishers not only moved to the agency model but also discussed pricing, which is the part that's illegal under antitrust laws.

However, many of the critics of the settlement argued that going back to the old way of selling ebooks would return things to the way they were before Apple, when Amazon was dominating the market, which could also stop healthy competition.

The DoJ said it had received 868 comments in the case – from individuals, publishers, retailers and even Apple. While some supported the DoJ, others criticised the case, but the DoJ maintained that the critics either misunderstood the department's judgment or were trying to keep prices higher for their own purposes.

"Many critics of the settlements view the consequences of the conspiracy – higher prices – as serving their own self-interests, and they prefer that unfettered competition be replaced by industry collusion that places the welfare of certain firms over that of the public," the department said in its published response. "That position is wholly at odds with the purposes of the federal antitrust laws – which were enacted to protect competition, not competitors."

The DoJ claimed that it wasn't Apple's entry into the market that stopped Amazon from hoovering up even more than its massive 90 per cent share of the market, but rather the arrival of Barnes & Noble before Apple that "took significant share" from the etailer.

The department also denied it was dictating how the industry should do business.

"The United States does not object to the agency method of distribution in the ebook industry, only to the collusive use of agency to eliminate competition and thrust higher prices onto consumers," the DoJ insisted.

"Publishers that did not collude are not required to surrender agency agreements and even the settling publishers here can resume agency, if they act unilaterally, after only two years."

The DoJ said that none of the arguments put forth had changed its mind about the settlements and they would be going ahead.

HarperCollins, Hachette and Simon & Schuster are the three settling publishers. Apple, along with Penguin and Macmillan, are all planning to fight the case in court, in a trial that is currently set to start in June next year. ®

Beginner's guide to SSL certificates

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
DOUBLE BONK: Testy fanbois catch Apple Pay picking pockets
Users wail as tapcash transactions are duplicated
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.