Monday, September 10, 2012

The DOJ vs Apple & Publishers: Links to date

A rehash of the DOJ vs Apple & Publishers case, just in case anyone is interested in studying how it began and how it has been playing out, or reviewing it from start to current. Snippets in block quotes are taken from my publishing news posts, which go up every other Friday, for timeline purposes and to explain what the articles are about; most links are straight from those snippets.

Plaintiff: U.S. Department of Justice
 Defendants: Apple, Simon & Schuster, Macmillan, Penguin, Hachette, and HarperCollins
       (*Random House not included in the lawsuit)


Feb 4, 2010
Hachette Book Group Switches to Agency Model (Simon & Schuster, Macmillan, HarperCollins, and Penguin also do so in the same year. All five enter Most Favored Nation clause with Apple.)

February 28, 2011

Random House Switches to Agency Model (last publisher to do so)

August 9, 2011
First lawsuits filed. (No link)

August 19, 2011:
More Lawsuits Over Agency Model

December 9, 2011:
U.S. Department of Justice is looking at mutli-agency ebook pricing deals.
From Friday, Dec 16, 2011:
"At the same time, the U.S. Department of Justice is looking at mutli-agency ebook pricing deals. (Dec 9) That's right, a bunch of publishers suddenly moved over to the agency model at the same time, and began setting identical pricing. Price matching across companies is legally discouraged (as in, there's a class-action lawsuit hitting the publishers right now for this practice). This is based on the idea that price matching discourages competition, which is anathema in a free-market economy. The DOJ has extended the deadline to resolve this issue, so it's something that will continue to be discussed in 2012. Oh, and the EU is looking into the same thing."

January 21, 2012:
Amended Price Fixing Complaint Ramps up Pressure on Publishers, Apple
From Friday, January 27
The saga of the lawsuit against publishers for price-fixing continues. The newest consolidation of claims does not target either RandomHouse or Amazon; those accused are Apple, HarperCollins, Penguin, Hachette, Simon & Schuster, and Macmillan. The suit asserts that the price-fixing between the major publishers targeted has "driven up the cost of e-books by as much as 50%." Amazon cites evidence of being approached by the 5 companies individually with threats to unlist e-book titles if they didn't capitulate to raising their e-book prices.

March 8, 2012
Justice Department May Sue Apple, Five Major Houses
From Friday, March 9, 2012
The Department of Justice warns Apple and Penguin, Hachette Book Group, Macmillan, HarperCollins, and Simon & Schuster that they will go ahead with the anti-trust lawsuit over eBook price fixing. No surprises here - they've just now been officially warned.

March 30, 2012
E-books settlement talks advancing: sources

April 2, 2012
DOJ May Be Close to Settling with Apple (edit from September: *snicker!* Yeah, we got that one wrong.)
From Friday, April 12, 2012
The DoJ is close to settling with Apple over price-fixing. This settlement may end Apple's "most-favored-nation" status. The deal may also shift pricing control from publishers to retailers, which is a move away from the agency model publishers have been using and back towards Amazon's wholesale model. Good news for Amazon.

April 11, 2012
Justice Dept. Files Suit Against Apple, Publishers Over E-book Pricing
DOJ Announces Three E-book Settlements, But Not With Apple
The Broad Strokes of the Hachette, HarperCollins, and S&S Price-Fixing Settlement President John Sargent issues official statement on Tor blog

April 12, 2012
DOJ is Likely to Lose E-book Antitrust Suit Targeting Apple 
 From Friday, April 20, 2012:
The DOJ has officially filed an antitrust lawsuit over e-book pricing against Apple and 5 of the Big Six publishers (but not Random House). HarperCollins, Simon & Schuster, and Hachette Group will be agreeing to a settlement in the DOJ vs. Big Five and Apple case. Apple, Macmillan, and Penguin will be fighting the antitrust charges in court. The terms of the settlement are quite a hassle, although they don't necessarily mean an end to the agency model - just the ability of publishers to set the prices, which is why the publishers wanted the agency model in the first place. CNET analyzes the case and suggests that it's not likely that the charges will stand against Apple, even if they do against the publishers. CEO of MacMillan, John Sargent, posts his statement on the issue on Amazon intends to lower prices on eBooks again....

The Short Version of DOJ against five major publishers and Apple:
When Amazon began selling eBooks at a loss, they gained almost 90% of the market. Shortly thereafter, five publishing houses and Apple each approached Amazon and pretty much said they wouldn't let Amazon sell their books if Amazon didn't switch to the "agency model" of pricing. This raised eBook prices, because it meant the publishers would be setting the prices instead of the retailers. Ironically, this earned the publishers less money per book than the "wholesale model" that allowed retailers to set the prices, as Amazon was absorbing the initial loss under the wholesale model. But since Amazon could use sales from their other markets absorb the cost of selling eBooks at a loss, Amazon began to dominate the market. Since the implementation of the agency model, Amazon has declined to about 60% of the eBook market, allowing other sellers (such as Apple and Barnes & Noble) to compete. Then the Department of Justice filed a antitrust lawsuit against Apple and the five publishers who demanded the agency pricing, on grounds that they colluded in an anti-competitive way to raise the price of eBooks. Amazon has come out and said the first thing they intend to do is lower prices on eBooks as soon as they can.

More related articles: US sues to lower prices of best-seller e-books, E-book antitrust suit against Apple a win for Amazon, and Speculation abounds that Amazon triggered e-book lawsuit. All three have a bias against Amazon (which is something to keep in mind when reading them), but they do give implications on how the ruling may affect the industry as a whole.

Amazon does give grants to independent booksellers and publishers adding up to a total of about $1 million. There's a long list tucked away on their page of their beneficiaries. Recipients say the grants are crucial to staying in business, but critics speculate on the possibility of Amazon using the grants to buy off independent publishers. It can't be denied that Amazon has been crucial to keeping some of these independent publishers in business, though.

 May 15, 2012
Apple Loses Motion to Dismiss Ebook Antitrust Suit
 From Friday, May 18, 2012
The DOJ rejects the motion to dismiss the class-action suit against Apple and 5 publishers for price-fixing. This is despite the settlement the DOJ has already reached with 3 of the publishers. (There's a shorter article here; these are not two separate cases but simply a motion to dismiss this single one, which I felt wasn't quite clear in the first article.)

May 31, 2012
Penguin and Macmillan Reject Price Fixing Charges 
From Friday, June 1, 2012
Penguin challenges the DOJ's claim that they conspired with four other major publishers and Apple to set prices, pointing out flaws in the DOJ's arguments and the weakness of evidence against them. Macmillan and Apple also intend to go to fight the lawsuit in court.

June 7, 2012
Barnes & Noble Urges Court to Reject DoJ's Price-Fixing Settlement
From Friday, June 15, 2012
Barnes & Noble urges the DOJ to reject the settlements of 3 big publishers over the price-fixing lawsuit, saying that the settlements are not in the public's best interest and that there is no factual basis that the settlements will actually address the issues raised by the lawsuit.

 June 25, 2012
Indie Publishers Push Back Agency Model, Criticize DoJ Deal

June 26, 2012
Readerlink Predicts DoJ Deal Will Lead to the 'Systematic Elimination of Competition'
Authors Guild Sees Return of Predatory Pricing if DoJ Deal Stands
From Friday, June 29, 2012
The Authors Guild, nine indie publishers, and Readerlink (a wholesaler) all submit protests to the DOJ against the settlements with Hachette, HarperCollins, and Simon & Schuster, based on the idea that the settlements will encourage predatory pricing by Amazon and will eliminate competition.

July 12, 2012
DOJ Misses Deadline to Post 800 Public Letters
From Friday July 13, 2012
The DOJ misses the deadline to publish 800 letters on the proposed e-book pricing settlement. With a stack this large, it hasn't been possible to read them all. They expect to have them posted by July 20, but question has arisen as to whether the delay violates the Tumney Act that gives the public the right to weigh in on decisions before the decisions are accepted by court.

July 23, 2012
Department of Justice Responds to Public Comments
Response of Plaintiff United States to Public Comments on the Proposed Final Judgement (Scribd file)
DOJ Highlights Letter from Self-Published Authors
DOJ Reviews Comments, Says E-book Deal to Go Ahead

July 26, 2012
Penguin Lodges Appeal in E-book Consumer Case 
From Friday, July 27, 2012
The DOJ begins responding to the letters from the public on the price-fixing lawsuit. Standing by their decision, they respond to Barnes and Nobles letter of protest and a letter from self-published writers in agreement, among others, and is generally dismissive of all claims that the settlement might be a bad idea, pointing out that claims that it will hinder competition are highly speculative. Penguin launches an appeal on the case, but is denied. 

August 13, 2012
Attorney Asks DOJ to Release Findings on Amazon's "Predatory" Ebook Pricing

August 15, 2012
Apple Says DOJ's E-book Proposed Settlement is "Fundamentally Unfair"

August 16, 2012
Apple, Publishers File Opposition to Proposed DOJ Settlement

August 23, 2012
DOJ Defends Settlement Against 'Ruinous Competition' Charges
 From Friday, August 24, 2012
Music industry attorney Bob Kohn asks permission to weigh in on the DOJ vs. Apple and Publishers case.. He includes the fact that even the DOJ admitted that Amazon was using predatory pricing, and asks the DOJ to release its findings.
Apple protests the DOJ's proposed settlement as unfair, including pointing out that the DOJ is attempting to rewrite their contracts with the affected party before even hearing any evidence, despite Apple never participating in the settlement. It also accuses Amazon of being a monopolist and driving the DOJ's investigation. (Also see PW article for more.)...

The DOJ defends its settlement, comparing publishers to railroads and other companies.

August 29, 2012
Court Will Allow More Five Page Amicus Briefs in E-book Case

August 30, 2012
Publishers to Pay $69M in eBook Pricing Settlement (Not DOJ but separate state lawsuits)

August 31, 2012
Checks, or Credit: The Broad Strokes of the States' E-book Settlement (Not DOJ but separate state lawsuits)

September 4, 2012
A Work of Art: Bob Kohn Submits DoJ Amicus Brief as Comic Strip

September 5, 2012
U.S. Attorneys Are Not Impressed by Bob Kohn's Comic Brief

September 6, 2012
Judge Approves E-Book Pricing Settlement Between Government and Publishers 
From Friday September 7, 2012
HarperCollins, Simon & Schuster, and Hachette are to pay $69 million in a settlement with state attorneys. This lawsuit parallels the DOJ vs Apple and Publishers one, but is not the same suit, because it's between the attorney generals and the publishers. Breakdown of who will pay what, for which books, is here. The money will be paid to the customers, not to the state attorneys.

Bob Kohn, music industry attorney who weighed in on the DOJ vs Apple and Publishers lawsuit, was submitted a 25-page amicus brief. The court decided this was too long and required him to resubmit it as a 5-page brief. So Kohn resubmitted it in comic form. The US attorneys were not impressed, responding in 5 paragraphs without addressing all of Kohn's points, and are urging the judge on the case to hurry up and submit a final judgement.

And, on Sept. 6, the judge did formally approve the settlement entered into by Simon & Schuster, Hachette, and HarperCollins with the DOJ. That still leaves Apple, Penguin Group, and Macmillan going to trial next summer. 

 Okay, as of Monday morning that's the current run-down. (Also, if you thought you noted that "e-book" comes in every capitalization/hyphenation imaginable, you were correct. I tried to keep the articles' spellings. I myself switched from eBook to e-book over the course of the year before settling on the latter, so you may see that, as well.)

What are your thoughts on the case?

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