December 20, 2014

Agency Model Antitrust Investigation Could Close Soon

The Department of Justice’s ongoing investigation of Apple and five major publishers could reach a conclusion as early as this week, according to Bloomberg. The department is looking into whether the publishers and Apple violated antitrust laws when they decided to adopt the “agency model” of ebook pricing.

Apple, Penguin and Macmillan are prepared to fight on, according to unnamed sources cited by Bloomberg, while Hachette, Simon and Schuster, and HarperCollins are reported to be looking to settle.

In the class action pricing lawsuit over these allegations, Apple made a motion to dismiss on the grounds that it shouldn’t be lumped in with the publishers, according to Publishers Weekly, and publishers argued that they’d made the decision independently. Maja Thomas, senior vice president of Hachette Digital, argued on a technology panel at OnCopyright (held March 30 at Columbia Law School) that the agency model, however arrived at, actually lowered prices on 80 percent of ebooks, raising the differential only on the most popular titles.

Last Friday representatives of the American Booksellers Association visited the department to defend the agency model, according to publishing industry news site Mediabistro. “The critical point we made to DOJ was that any attempts on the government’s part to remedy any alleged wrongdoing must not end the agency model, which has  created a more competitive marketplace,” association CEO Oren Teicherb said in a letter to members. Regional associations are lobbying to keep the agency model as well, according to PW.

Wired speculates about possible settlement terms and what they might mean for the industry; what’s even more unclear is what impact, if any, this will have on the continuing question of selling ebooks to libraries. But one thing that is clear is that publishers won’t be able to sit down and discuss it as a group any time soon: as a lawyer for Elsevier said from the audience at the AAP’s annual meeting, antitrust concerns mean that any new models are more likely to have to come from the library side. And Thomas concurred:Publishers used to be able to talk to each other a lot more before the DOJ started to investigate us.”

Meredith Schwartz About Meredith Schwartz

Meredith Schwartz (mschwartz@mediasourceinc.com) is Senior Editor, News and Features of Library Journal.

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