Monday, July 23, 2012

Department of Justice upholds "Final Judgment" in Antitrust Case against Publishers

A few months ago, the Department of Justice (DoJ) investigated and ruled on an Antitrust case against Apple, Inc, Hachette Book Group, Inc, HarperCollins Publishers, Holtzbinck Publishers d/b/a MacMillan Group, The Penguin Group, and Simon and Schuster, Inc. You can read more about the case and its implications in two earlier blog posts that I wrote for Indies Unlimited HERE and HERE.

The DoJ has determined that the proposed “final judgment” provides “an appropriate and effective remedy” for the antitrust violations. They are quoted as saying that the comments to dismiss the case were being submitted “by those who have an interest in seeing consumers pay more for e-books…”

The DoJ showed little interest in the comments from some of the big players in the industry, including Barnes & Noble, Books-A-Million and the Authors Guild. The go further to say that arguments that Amazon will eventually monopolize the e-book industry as “highly speculative at best.”

The DoJ also noted that not all authors objected to the settlement. Apparently, many mainstream or traditionally published authors were against the settlement. The largest group in favor of the settlement was self-published authors. In one comment by a group of self-published authors, the traditional publishers and literary agents were described as “… all kinds of middlemen which have gone from being indispensable to optional … “

The purpose of the Final Judgment is to 1) end the current collusion (price fixing); 2) restore competition eliminated by that collusion; and 3) ensure compliance. Specifically, the settlement enforces the following: A) Refrain for two years from entering into contracts containing retail price restrictions and price commitment mechanisms; B) stop communicating competitively sensitive information to competitors; C) not retaliate against retailers that exercise discounting authority; and D) agree not to fix terms or prices with competitors for the provision of e-books.

The final judgment does not impose a business model on the e-book industry. However, for two years, Settling Defendants cannot prohibit retailers from discounting e-books.

There’s much more in this 66 page document from the Department of Justice. I hope that I have picked out the key points to help us understand what it means and how it will affect us. For more information you can view the decision at

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is the author of the #1 Kindle bestselling novel, The Card, and a weekly contributor to the indie writing and publishing resource, Indies Unlimited.

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