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DoJ settlement 'would injure booksellers', says B&N

07.06.12 | Bookseller staff

Barnes & Noble has said the Department of Justice's proposed settlement with HarperCollins, Hachette and Simon & Schuster over alleged e-book pricing collusion "substitutes one alleged cartel for a new cartel on the industry, albeit one run by the [DOJ]".

In a complaint sent to the DOJ this morning, US retailer B&N said "our nation's culture, and the future of copyrighted expression" was at stake in the affair. It argued that the proposed settlement was "analogous to a cartel imposing a detailed business model on publishers", and that it would "injure innocent third parties, including Barnes & Noble, independent bookstores, authors, and non-defendant publishers; hurt competition in an emerging industry; and ultimately harm consumers".

B&N argued that the agency model encouraged innovation and said the proposed settlement would "harm Barnes & Noble and other brick-and-mortar e-book distributors by leaving them where they were two years ago: a dominant player will set uncompetitive prices that all other potential competitors must meet to compete. Unable to compete with below-cost pricing, e-book distributors will drop from the e-book space."

Meanwhile, the Authors Guild has said in a statement that "the proposed settlement is not in the public interest", calling for it to be "rethought, and substantially modified". The statement said: "The Justice Department is sanctioning the destructive, anticompetitive campaign of a corporate giant with billions in cash and boundless ambitions. The situation is bizarre, and without precedent, to our knowledge: the Justice Department is intervening to help entrench a monopolist."

The US authors organisation is calling on its members to speak up and write to the DOJ too, to "let the Justice Department know that bookstores play a vital role in our literary ecosystem, and the public has a strong interest in protecting them from predation".

The deadline for comments on the settlement is 25th June.

At the end of May, Penguin and Macmillan, the two publishers not settling the case, hit back at the US government claims, with Penguin accusing Amazon of "predatory" and "monopolist" behaviour, and Macmillan saying the government's claims "stretches facts and implies actions that did not occur and Macmillan denies unequivocally". The week before, fellow defendant Apple filed its response to the lawsuit, saying the government was siding with "monopoly, rather than competition".

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