US sues Apple and book publishers over e-book prices– are digital comics next?
The Justice Department has at last filed an anti-trust complaint in New York against Apple and five publishers over an alleged price fixing conspiracy. The decision to sue comes after weeks of media leaks that suggested the government was trying to pressure the parties into a settlement.
The issue turns on whether five publishers colluded with Apple to implement “agency pricing” in which the publishers set a price and the retailer takes a commission.
The heart of the allegations turn on whether Apple acted as the hub of a conspiracy in which the publishers sought to freeze Amazon out of the e-book market unless it changed its pricing structure. Amazon had been using a wholesale model in which it bought books from the publishers and then charged what it liked.
Amazon often sold the e-books below cost in order to build market share and, in doing so, publishers believed it was setting an artificially low floor for prices.
The relevant question, of course, is: if agency pricing for e-books is found to be illegal, how long will the same price point hold for digital versions of comic books? Or does it not matter because DC, Marvel, et al are licensing their books to Comixology and Graphicly, which could be construed as a much stronger form of agency?
Needless to say, we’ll be watching this case with great interest.