DOJ could ‘wipe out publishing industry’ with Apple ebook case

Karen Haslam
22 July, 2012
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The US Department of Justice could “wipe out the publishing industry as we know it”, with its lawsuit accusing Apple and book publishers of conspiring to raise ebook prices.

US Senator Charles Schumer warned that if it goes ahead with the lawsuit against Apple, the DOJ will allow Amazon to regain its monopoly in the publishing market.

Schumer expressed his views in an opinion piece at the Wall Street Journal. His “Memo to DOJ: Drop the Apple E-Books Suit: Restoring Amazon’s monopoly in digital publishing is not in the public interest,” article suggests that Apple plays a vital role in the ebook industry that leads to competitive pricing.

Schumer noted that Amazon was able to take an early lead in the ebook market, and, crucially, sell books below cost, thanks to its large product catalogue.

Schumer wrote: “They could allow their books to be sold at the prices Amazon set, thus undercutting their own current hardcopy sales and the future pricing expectations for digital books – or stay out of the e-books market entirely. In an increasingly digital age, the latter was simply not an option.”

He claims that Apple’s Agency Model gives the power back to the publishers. The DOJ, on the other hand, believes that this Agency Model infringes on antitrust laws.

Schumer claimed that the DOJ: “Misses the forest for the trees”. He suggested that they are ignoring the overall downward trend of average ebook prices and instead focusing on new book prices.

He suggested that consumers have “a more pressing long-term interest in the survival of the publishing industry.”

The trial will begin on June 3, 2013. Apple and two publishers are fighting the antitrust charges. The US department of justice accuses Apple and those publishers of conspiring to raise ebook prices in the iBookstore.

Apple claims that publishers were not happy with Amazon’s pricing tactics and wanted to set their own prices in the iBookstore. The company also claims that the US government has sided with monopoly rather than competition in bringing a case of ebook price-fixing against Apple.


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