Last Friday we told you about the DoJ’s likely lawsuit against Apple and five publishers. Essentially the DoJ is trying to prove that Apple and the others decided on a price fixing plan. Yesterday Salman Rushdie tweeted his thoughts on the matter: “Seems that the US Justice Dept wants to destroy the world of books. Letter from Scott Turow: Grim News: http://bit.ly/yEyRhX” and “Anyone who thinks that fair pricing that allows authors to make a living is a cabal or cartel system is deep in the grip of Napsterism..” Such strong words couldn’t even be captured in a 140 character setting (he used two tweets).
Rushdie is referring to the pre-Apple contract days, when Amazon and other online retailers were selling books at a steep discount ($9.99 or less). What he’s saying is that if retailers like Amazon are permitted to sell books at any price, authors stand to lose money. When Amazon and its peers got into the deep-discount e-book business, they really put a strangle-hold on bookstores, driving many independents out of business, thus making it harder for authors like Rushdie to turn a profit.
The Guardian reports:
At stake is the power to set prices for ebooks, with publishers defending the controversial agency model, which sees the publisher determining ebook prices instead of the retailer. Apple has backed the agency approach while Amazon has fought hard against its adoption, preferring to set prices itself and sometimes to discount ebooks ferociously. The agency model has already prompted an EU investigation into price fixing, with several publishers inspected over the commission’s belief that “the companies concerned may have violated EU antitrust rules that prohibit cartels and other restrictive business practices”. In America, meanwhile, a class-action lawsuit alleges that several major publishers conspired with Apple to increase ebook prices in order “to boost profits and force ebook rival Amazon to abandon its pro-consumer discount pricing”.
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