From The Authors Guild:
The Authors Guild, the nation’s largest and oldest society of professional writers, discussed the benefits of competitive e-book pricing in a friend-of-the-court brief filed today with the Supreme Court of the United States.
The brief, filed jointly by the Authors Guild, Authors United, the American Booksellers Association, and Barnes & Noble, bolsters ongoing advocacy efforts by the Authors Guild and Authors United and asks the Supreme Court to review a decision by the Second Circuit Court of Appeals in U.S. v. Apple, which found that Apple violated antitrust law by coordinating with major U.S. book publishers to influence the price of e-books. In the brief, the author and book industry groups argued that the government’s focus on Apple’s allegedly anti-competitive activities was misplaced, because Apple’s conduct, in fact, enhanced competition by increasing e-book output, the number of e-book titles, and the number of e-book distributors, which led to technological improvements in the e-book market and enhanced freedom of expression and access to e-books.
In U.S. v. Apple, the Department of Justice brought a lawsuit maintaining that the publishers and Apple—by striking a coordinated deal to establish agency pricing for e-books—exhibited anticompetitive conduct by conspiring to fix prices. The publishers and Apple, on the other hand, maintained that Apple’s entry into the market actually increased competition, as demonstrated by the fall of Amazon’s market share from 90% in 2010 to around 60% two years later. After a 20-day trial in summer 2013, the trial court found that Apple colluded with the publishers to drive the price of e-books above the $9.99 favored by Amazon. The Second Circuit upheld that decision.
. . . .
In the brief submitted today, the groups sought to highlight the procompetitive impact of Apple’s conduct and the damaging effect on e-book publishing as well as the future of authorship that occurs when e-book distribution is in the hands of a single company. Attorneys with Kirkland & Ellis in New York and Washington, D.C. filed the amicus brief. “Absent correction,” they wrote in the brief, “the lower court’s wooden approach threatens to undermine the very objective of antitrust law—to ensure robust competition.”
“We authors feel strongly that diversity, competition, and the free flow of ideas are key to a healthy marketplace of books,” said Douglas Preston, founder of Authors United. “The numbers unequivocally show that Apple’s entry into the e-book market increased competition and gave authors and publishers greater choice in how content was delivered to the reading public.”
Link to the rest at The Authors Guild and thanks to Joshua for the tip.
PG says The Authors Guild has been making some noise about helping authors avoid the terrible contracts Big Publishing requires of them. Unfortunately, this amicus brief shows where AG’s real sympathies lie.
The actions of The Price-Fix Six could not have been more clearly illegal under US antitrust law. As PG mentioned during the trial, the facts of the lawsuit against Apple and five of the six largest publishers in the US would never have been used as the basis of a question on a law school antitrust exam because the violations were so obvious. A second year law student would instantly recognize them.
The “We broke the law because we wanted more competition” argument is as lame as it sounds. Amazon is permitted to gain a large share of the ebook market if it does so by providing good products and services at lower prices. Antitrust law exists to protect consumers and competition, not any particular group of competitors.
For all his virtues, Steve Jobs didn’t want to compete on price. That wasn’t (and isn’t) the Apple Way. Apple was coming to the ebook market late and didn’t want to deal with a company like Amazon who was all about low prices. Since Big Publishing didn’t like low prices either, Apple found ready allies in a plan to push the prices of ebooks up and keep them up.
Voila! Illegal price fixing.
The suit against the Price-Fix Six was brought by the US Department of Justice antitrust division. However, private antitrust suits are permitted and even encouraged under antitrust law by an automatic trebling of damages paid to a successful plaintiff. While Big Publishing has tried and failed to interest the DOJ in filing suit against Amazon, if Big Publishing really believes Amazon has violated antitrust laws, they can file that suit themselves.
Antitrust litigation is not cheap, but the big international media conglomerates that own all the big publishers have deep financial pockets. The fact that no private antitrust action has been filed is a huge indication, for PG at least, that Big Publishing’s lawyers are telling their clients that Amazon would win such a suit.