Rare Book Monthly

Articles - January - 2013 Issue

And Then There Was One – Macmillan Settles eBook Price-Fixing Suit

Penguinglogo

Penguin has settled.

One more publisher accused by the U.S. Department of Justice of artificially fixing the price of eBooks has bowed out of the suit with a settlement. Penguin Group has joined Hachette, HarperCollins, and Simon & Schuster in settling the dispute with the Department of Justice. That leaves just one publisher – Macmillan – still in the suit, along with the firm with whom they allegedly conspired to fix prices – consumer technology giant Apple, the world's largest corporation. The suit, now between the DOJ and Apple/Macmillan, is scheduled to be heard in June 2013.

For a look at the mess leading up to this point, click here. Basically, Amazon set out to dominate the then new electronic book business by selling eBooks very cheaply, at prices not much more (occasionally less) than cost. It made it very hard for others to compete. The publishers did not like this pricing, because, although they were selling their books, they felt consumers would get so used to low prices, they could never raise them again. They were also concerned that if eBook prices were too cheap, they would have trouble selling more expensive paper copies.

Meanwhile, Apple wanted to sell eBooks, but not for an absence of profit. Apple likes to make money. The result, according to the Department of Justice, was that Apple and the publishers agreed to change the method by which they would set prices. Instead of a wholesale price, from which retailers could set their own prices, the publishers set the retail price, and allowed the retailers to make a commission (generally 30%). Those set retail prices, which Amazon was now obligated to use, were considerably higher than those Amazon previously charged. The DOJ looked at this and concluded it amounted to illegal price fixing.

On December 18, the DOJ announced that Penguin had joined the other three in abandoning their so-called “agency pricing” agreement with Apple (agency pricing is where the manufacturer, not the retailer, sets the retail price). According to the DOJ, “Before the companies began their conspiracy, retailers regularly sold e-book versions of new releases and bestsellers for, as described by one of the publisher’s CEO, the 'wretched $9.99 price point.' As a result of the conspiracy, consumers were typically forced to pay $12.99, $14.99, or more for the most sought-after eBooks.” Jamillia Ferris, Chief of Staff and Counsel at the DOJ’s Antitrust Division, added, “Since the department’s settlement with Hachette, HarperCollins and Simon & Schuster, consumers are already paying lower prices for the eBook versions of many of those publishers’ new releases and bestsellers.”

While the settlement has led to a reduction in some eBook prices, notably at Amazon, the settlement is being challenged by Apple. They believe their contracts with the publishers, in which the latter agreed to use the agency pricing model, are still legal and valid contracts. In other words, Apple maintains that the DOJ suit is bad law, and the publishers do not have a right to agree to a settlement which, in effect, overrides the Apple contracts with them. Apple considers those “agency” contracts to be legal and binding. If I were a betting man, I would bet against Apple on this claim, but I know betting is illegal, regardless of whether these contracts are, so I won't go there.

Stay tuned.

Rare Book Monthly

  • <center><b>Hindman Auctions<br>Fine Books and Manuscripts<br>November 12-13, 2020</b>
    <b>Hindman Auctions, Nov. 12-13:</b> MACHIAVELLI, Niccolò. <i>Nicholas Machiavel's Prince. Also, The life of Castruccio Castracani of Lucca…</i> Translated by Edward Dacres. London, 1640. $25,000 to $35,000.
    <b>Hindman Auctions, Nov. 12-13:</b> FILSON, John. <i>The Discovery, Settlement and present State of Kentucke: and An Essay towards the Topography, and Natural History of that important Country…</i> Wilmington, Del.: James Adams, 1784. $20,000 to $30,000.
    <b>Hindman Auctions, Nov. 12-13:</b> ELUARD, Paul. <i>Un poeme dans chaque livre.</i> Paris: Louis Broder, 1956. $20,000 to $30,000.
    <center><b>Hindman Auctions<br>Fine Books and Manuscripts<br>November 12-13, 2020</b>
    <b>Hindman Auctions, Nov. 12-13:</b> LEWIS, James Otto. [<i>Aboriginal Port Folio.</i> Philadelphia: Published by the Author, 1835-1836]. $15,000 to $25,000.
    <b>Hindman Auctions, Nov. 12-13:</b> [ILLUMINATED MANUSCRIPTS]. BOOK OF HOURS, use of Rome, in Latin. [Southern Netherlands (Ghent or Bruges), c.1460]. $8,000 to $12,000.
    <b>Hindman Auctions, Nov. 12-13:</b> MORE, Thomas, Sir. <i>The Workes ... wrytten by him in the Englysh tongue.</i> Edited by William Rastell. London, 1557. $8,000 to $12,000.
    <center><b>Hindman Auctions<br>Fine Books and Manuscripts<br>November 12-13, 2020</b>
    <b>Hindman Auctions, Nov. 12-13:</b> [KELMSCOTT PRESS]. MORRIS, William. <i>Love is Enough.</i> Hammersmith: The Kelmscott Press, 1897. $5,000 to $6,000.
    <b>Hindman Auctions, Nov. 12-13:</b> LINCOLN, Abraham. Autograph endorsement signed as President (“A. Lincoln”), 24 February 1863. $4,000 to $6,000.
    <b>Hindman Auctions, Nov. 12-13:</b> WASHINGTON, George. Address panel with autograph free frank signed ("G:o Washington"), as Commander in Chief of the Continental Army, 5 August 1777. $3,000 to $5,000.
    <center><b>Hindman Auctions<br>Fine Books and Manuscripts<br>November 12-13, 2020</b>
    <b>Hindman Auctions, Nov. 12-13:</b> GOREY, Edward. <i>The Beastly Baby.</i> N.p.: The Fantod Press, 1962. $1,000 to $1,500.
    <b>Hindman Auctions, Nov. 12-13:</b> FROST, Robert. Photographic reproduction signed and inscribed ("Robert Frost”), to R.V. Thornton, 1955. $1,000 to $1,500.
    <b>Hindman Auctions, Nov. 12-13:</b> GOREY, Edward. <i>The Bug Book.</i> New York: Looking Glass Library, 1959. $500 to $700.
  • <b>Swann Auction Galleries Nov 17:</b> Jane Austen, <i>Pride & Prejudice,</i> 3 volumes, first edition, London, 1813. $20,000 to $30,000.
    <b>Swann Auction Galleries Nov 17:</b> John Hancock, Uncommon Privateer Commission, signed as President of Continental Congress, 1777. $6,000 to $9,000.
    <b>Swann Auction Galleries Nov 17:</b> Frank Lloyd Wright, photograph signed & inscribed. $2,000 to $3,000.
    <b>Swann Auction Galleries Nov 17:</b> Abraham Lincoln, document signed conscripting troops for first national draft in U.S., 1863. $15,000 to $25,000.
    <b>Swann Auction Galleries Nov 17:</b> Jane Austen, <i>Sense & Sensibility,</i> 3 volumes, first edition, London, 1811. $30,000 to $40,000.
    <b>Swann Auction Galleries Nov 17:</b> Charles Dickens, <i>American Notes for General Circulation,</i> first edition, inscribed to Richard Henry Dana, Jr., London, 1842. $30,000 to $40,000.
    <b>Swann Auction Galleries Nov 17:</b> John Maynard Keynes, <i>The General Theory of Employment, Interest & Money,</i> first edition, London, 1936. $5,000 to $7,500.
    <b>Swann Auction Galleries Nov 17:</b> Alexandre Raymond, <i>L’Art Islamique en Orient,</i> 2 volumes, first editions, Péra-Constantinople, 1922-24. $3,000 to $4,000.
    <b>Swann Auction Galleries Nov 17:</b> Igor Stravinsky, autograph musical quotation signed, 3 bars from <i>Perséphone,</i> 1936. $1,500 to $2,500.
  • <b>Christie’s, Nov 3 :</b> REGAMEY, Felix (1844-1906). Unique drawing showing Verlaine and Rimbaud in London, September 1872. €70,000 to 100,000
    <b>Christie’s, Nov 3 :</b> LABORDE, Alexandre de (1773-1842). <i>Voyage pittoresque et historique de l’Espagne.</i> Paris : 1806-1820. €20,000 to 30,000
    <b>Christie’s, Nov 3 :</b> BOCCACE, Jean (1313-1375). <i>Il Decamerone…</i> Venise : Gabriele Giolito di Ferrari, 1542.<br>€ 12,000 to 15,000
    <b>Christie’s, Nov 3 :</b> LAMBERT, Yvon (1936). Full collection of writings from <i>Une rêverie émanée de mes loisirs.</i> Paris : 1992 - 2018. €50,000 to 70,000
    <b>Christie’s, Nov 3 :</b> JOUVE, Paul (1878-1973) -- KIPLING, Rudyard (1865-1936). <i>La Chasse de Kaa.</i> Paris : Javal & Bourdeaux, 1930. €2,000 to 3,000

Article Search

Archived Articles

Ask Questions