Blog Ipsa Loquitur

Published on under The Digital Age

Nilay Patel, writing for The Verge, on the just-filed ebook price-fixing case against Apple and the publishers:

The government alleges that the publishing industry openly colluded to raise ebook prices and end Amazon’s dominance, and that Apple was a willing participant in the scheme. What’s more, the alleged conspiracy sounds like it was actually quite a conspiracy, with secret CEO meetings in private New York dining rooms and promises made to bosses up and down the chain. It’s all quite juicy, so let’s dig in.

Although Apple is listed as the first defendant, the bulk of the case is really about the publishers involved: Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster. According to the government, these publishers greatly feared Amazon’s $9.99 Kindle book prices, which they called “wretched,” and worked for years on a scheme to raise prices and limit competition. They also feared that consumers would get used to paying $9.99 for bestsellers and ultimately decrease publishing profits.

And this breakdown goes on. As always, Patel has the most concise and cogent summary of the key legal issues at play. It really sounds like slimy business. The publishers felt like Amazon had too much leverage in the retail book market, and as such, they agreed to set prices with the new kid in the ebook market (Apple). Apple, for its part, was eager to get a foothold in a growing market, and was happy to not only acquiesce, but actively secure publishers for the price-fixing cartel.

Note that three of the seven publishers have already settled, and the lawsuit was only filed yesterday. So there are at least a few folks who’re pretty sure the complaint is accurate.

Read the excellent summary at The Verge.