Apple E-Book Antitrust Ruling

The big publishing news from today is the ruling against Apple, who were have found to have violated antitrust rules by colluding with the big five to raise e-book prices.

In short form, and as un-judgementally as possible, Apple made a deal to transition from a store-set pricing model to an agency pricing model, which means that the publisher would set the price of the e-books. They also included a “most favoured nation” clause in their contracts with Apple guaranteeing that Apple would be able to sell books for the same price the books were available in any store. The publishers then approached Amazon and threatened to withdraw their books from the Amazon store if Amazon didn’t also raise e-book prices.

You can read a more complete analysis of the ruling here.

I am of two minds on this.On one hand, it’s all too easy to vilify Apple. Steve Jobs was not a nice person and quotes like:

I can live with this, as long as they move Amazon to the agent model (meaning the publishers, and not retailers such as Amazon, could set prices) too for new releases for the first year. If they don’t, I’m not sure we can be competitive.

certainly point toward a level of collusion between Apple and the big five. Setting up a price consortium consisting of a favoured retailer and the five companies responsible for producing the vast majority of the content within an industry is a pretty clear example of anti-trust.

On the other hand, much ink has been spilled regarding Amazon’s possibly predatory pricing and the impact it has had on the industry.

So really, who are the good guys here? The people driving the price of e-books up or the people driving the perceived value of books down? It’s a difficult issue. On one hand, as a reader I like to buy cheap books. I like to have a large selection of books. I like buying books to be convenient. At two books a week, even a small mark-up in book prices will have a negative impact on my pocket book. 

However as a writer I understand the amount of time and effort that goes into producing a book. <hyperbole>I put two years of my life into something, I’d like to think it’s worth more than $0.99. </hyperbole> Agency pricing models prevent Amazon from using loss-leaders to drive business out of competitors funnels and into their own. These could ultimately end up being anti-monopolistic practises.

As I said before, I’m undecided. I am not entirely comfortable with Amazon or with Apple. I’m not entirely certain that either company has the best interests of readers or of authors in their hearts. Instead I think we see two companies known for aggressive and monopolistic practises using the courts to try and get one up on each other.

And Amazon appears to have won this round.

Since I honestly don’t know what to think about all this I’d be interested to hear your opinion. Leave a comment and let me know whether the ruling against Apple ultimately help or harms readers, writers and publishing. 

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