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.
via It’s on — US sues Apple, publishers over e-book prices — paidContent.
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.
- DOJ Sues Apple Over E-Book Pricing (technologyreview.com)
- How The $9.99 Ebook Died (buzzfeed.com)
Despite what it says on the cover of a print comic book, that cover price is merely the “suggested retail price.” A retailer can sell it at any price point he or she wishes. This is true of all similar material: books, magazines, newspapers, et al.
If manufacturers and certain major retailers or one or two major retailers that together or individually hold a dominant and domineering share of their market agree the product will go out at one specific price and only at that price, that has been defined as price fixing, a violation of the Robinson-Patman Act. The problem with electronic retailing is that the playing field is different and the concept of competition is different. The DOJ says it all boils down to the same thing, but of course the electronic retailers and some of those who sell their wares through these systems will argue it’s a horse of another color and those particular laws should not apply.
They will further argue that their monopoly (or duopoly, as the case may be) isn’t really a monopoly as that same product is available at competitive pricing at traditional brick-and-morter stores and chains.
But Apple and those publishers who have not already settled with the DOJ can win and outfits such as ComiXology might still be left holding the bag — IF they are the exclusive distributors of sundry product.
It will be an interesting court case.
When i first heard that DoJ was investigating Apple and publishers, i assumed it was a restraint of trade case involving their e-textbook cartel.