Authors Guild president and novelist Scott Turow sent a blunt letter to members this afternoon, calling the possibility of a Department of Justice lawsuit against Apple and five major publishers “grim news for everyone who cherishes a rich literary culture.”
We’ve reprinted the entire letter below, but here is an excerpt: “Amazon was using e-book discounting to destroy bookselling, making it uneconomic for physical bookstores to keep their doors open … The irony bites hard: our government may be on the verge of killing real competition in order to save the appearance of competition.”
The news broke yesterday that the DOJ may sue Apple, Simon & Schuster, Hachette Book Group, Penguin Group (USA), Macmillan and HarperCollins for allegedly colluding to fix eBook prices when they established the agency model for eBook pricing.
March 9, 2012
Yesterday’s reports that the Justice Department may be near filing an antitrust lawsuit against five large trade book publishers and Apple is grim news for everyone who cherishes a rich literary culture.
The Justice Department has been investigating whether those publishers colluded in
adopting a new model, pioneered by Apple for its sale of iTunes and apps, for selling ebooks. Under that model, Apple simply acts as the publisher’s sales agent, with no authority to discount prices.
We have no way of knowing whether publishers colluded in adopting the agency model for e-book pricing. We do know that collusion wasn’t necessary: given the chance, any rational publisher would have leapt at Apple’s offer and clung to it like a life raft.
Amazon was using e-book discounting to destroy bookselling, making it uneconomic for physical bookstores to keep their doors open.
Two years after the agency model came to bookselling, Amazon is losing its chokehold on the e-book market: its share has fallen from about 90% to roughly 60%. Customers are benefiting from the surprisingly innovative e-readers Barnes & Noble’s investments have delivered, including a tablet device that beat Amazon to the market by fully twelve months. Brick-and-mortar bookstores are starting to compete through their partnership with Google, so loyal customers can buy e-books from them at the same price as they would from Amazon. Direct-selling authors have also benefited, as Amazon more than doubled its royalty rates in the face of competition.
Let’s hope the reports are wrong, or that the Justice Department reconsiders. The irony bites hard: our government may be on the verge of killing real competition in order to save the appearance of competition.
This would be tragic for all of us who value books, and the culture they support.
Editor’s Note: Turow talked about the future of publishing in this special video interview with Mediabistro.