Dispatches from the Digital Revolution
It’s often said that politics makes strange bedfellows. Apparently this is also true when the government involves itself in the book industry: Last week, the American Booksellers Association and Barnes & Noble joined forces to file an amicus brief and become “friends of the court” in the proposed agency model settlement following the Department of Justice’s price fixing lawsuit on Apple and the publishing “big five.”
(For a simplified explanation of the agency model, read the breakdown from Appazoogle‘s Leah Thompson. For a bit of background on the lawsuit itself, check out a response from Appazoogle‘s Keira Lyons.)
Under the proposed settlement, three settling publishers, Hachette, HarperCollins, and Simon & Schuster, would be forced to end their agency model agreements with B&N and ABA member bookstores and be barred from entering any agency model agreements for the next two years. (For the record, other parties involved in the lawsuit—Apple, Penguin, and Macmillan—have not entered into the proposed settlement.)
However, interested parties don’t want the settlement to proceed as planned, believing that ending the agency model and not punishing the publishers for their alleged price fixing would lead to an Amazon monopoly on ebook sales. (Supposed) price fixing is one thing. Anticompetitive business practice is another. B&N and the ABA’s joint filing said, ”The end loser of this unnecessary and burdensome regulatory approach will be the American public, who will experience higher overall average e-book and hardback prices and less choice.”
Late on Friday, August 3, the DoJ asked Judge Denise Cote to approve the settlement agreement; on Tuesday, August 7, Judge Cote accepted the ABA and B&N’s filing. Interestingly, as PW reported Tuesday, Judge Cote decided to accept the filing as the brief itself, since the organizations had written their filing more as an argument against the final result of the agency model lawsuit and not used it just to argue why they should be granted “friend of the court” status. Apparently, the two got a little wordy and exceeded their page limit, so they’re not allowed to make any additional comments.
Judge Cote is kind of reminding me of one of my professors from PSU…
As of this writing, the court hasn’t yet reached a decision on the DoJ’s settlement or the original lawsuit. But that’s not really the part of all this I’m finding most interesting this week. Like many people, I kinda got stuck on the part where B&N and ABA worked together. It seems like only yesterday that the ABA member stores and B&N were up in arms over the big box store pushing indies out of business. But when both indies’ and chain booksellers’ livelihoods were threatened by online giant Amazon, the independent-versus-chain rivalry gave way to the online-versus-physical store battle.
The association reported that, in an email to member bookstores, ABA CEO Oren Teicher wrote,
I know that for some this joint action with B&N may seem an unlikely cooperation. However, we believe that in this matter it is important that bricks-and-mortar bookstores speak in one voice in order to make the strongest case possible against a consent decree that would unfairly hurt bricks-and-mortar retailers, greatly limit consumers’ options, facilitate below-cost pricing, and, ultimately, very likely lead to a monopoly.
When the government takes the bully’s side, it seems, former rivals have banded together in the face of an even greater danger. Or, in the immortal words of Bill Murray (just substitute “business” for “city”)…
I’m not sure that B&N and the indies have had quite such an antagonistic relationship lately. After all, when confronted with a shift to online booksales, old quarrels over physical real estate seemed to pale in comparison.
In any case, with this case and the lawsuit over Google’s Library Project, it seems that ebooks and online bookselling have begun to impact more than just the book business. Although the courts haven’t yet made decisions in these cases, the arguments in favor of the book scanning project and the agency model may call into question our established copyright and business law.