Publishers: What eBook pricing conspiracy?

publishers what ebook pricing conspiracy ebookpublishingThe two named publishers remaining in the US Department of Justice’s legal battle over the potential price fixing of eBooks have finally responded to the accusations of conspiracy with Apple to raise digital pricing. Unsurprisingly, they both deny allegations of illegal or improper behavior, but it’s what else they say that’s more telling about the future direction of the case.

Penguin and Macmillan are the only two publishers of the five named who haven’t already settled with the DOJ (Hachette, Simon and Shuster and HarperCollins all settled back in April), and judging by the public statements both released today, it looks as if they are joining Apple in staging a strong defense against what they see as entirely unfair charges. “Penguin did not conspire to fix the prices of eBooks with other publishers or with Apple,” the lengthy Penguin response begins, explaining that the publisher, before going on to add that “The form of the vertical relationship — agency — made independent business sense to Penguin.”

The agency distribution model used by Apple is noted as having “specifically been found by the U.S. Supreme Court to be a legitimate way to do business,” with “incontrovertible pro-competitive aspects.” Not the least of those pro-competitive aspects is that it “demolished what was widely recognized in the book industry as a ‘barrier to entry; — Amazon’s business practice of selling certain new release eBooks below-cost for certain periods of time — and prevented Amazon from cementing itself as a monopolist that would continue to dominate the sale of eBooks and eReaders.” Somewhat staggeringly, Penguin’s response then goes on to respond to each and every one of the 104 allegations leveled by the DOJ in the original complaint, one by one. Apparently, Penguin’s lawyers, unlike its writers, get paid by the word.

Macmillan’s response, in comparison, is much shorter – but also more vitriolic. “Macmillan did not participate in any illegal conspiracy,” it reads, adding “It did not participate in any conspiracy to raise, fix or stabilize e-book prices, to end price competition among e-book retailers, to limit retail price competition between publishers, or to move the distribution of e-books to the agency model.” It goes on to add that “the lack of direct evidence of conspiracy cited in the Government’s Complaint is telling [and is] based entirely on the little circumstantial evidence it was able to locate during its extensive investigation, on which it piles innuendo on top of innuendo, stretches facts and implies actions that did not occur and which Macmillan denies unequivocally.”

Clearly, neither Penguin nor Macmillan is in any rush to follow their fellow publishers to legal settlement anytime soon. It’ll be interesting to see quite where this ends up going, once it gets to court.


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