DoJ rejects B&N/Authors Guild objections to settlement

The Department of Justice has rejected objections raised by the public to its proposed settlement with HarperCollins, Hachette and Simon & Schuster over alleged e-book pricing collusion and the agency model. Bookseller Barnes & Noble, American author association the Authors Guild and a group of US independent publishers including Grove/Atlantic and Perseus had been among those to lodge complaints.

The settlement with the three publishers, agreed in April, enjoined the publishers to terminate the Apple agency agreements, not to enter into any contracts that prevent retailers from setting their own e-book prices for a two-year period, and not to "enter into any agreement with an e-book retailer relating to the sale of e-books that contains a price Most Favoured Nation".

Macmillan, Penguin and Apple rejected the terms of the settlement and face trial on 3rd June 2013.

The DOJ received 868 public comments to the proposed settlement, with nearly 70 in favour of the settlement and the remainder opposing it. "Most of these came from publishers, authors, agents and bookstores that acknowledged an interest in higher retail e-book prices," the DoJ noted.

Barnes & Noble's objections to the settlement had claimed it would injure booksellers. The Authors Guild had said the proposed settlement was "not in the public interest". Referring to Amazon, the US authors body had stated: "The Justice Department is sanctioning the destructive, anticompetitive campaign of a corporate giant with billions in cash and boundless ambitions."

In a response published today
(23rd July), the DoJ said: "In the course of its investigation, the United States examined complaints about Amazon's alleged predatory practices and found persuasive evidence lacking . . . Even if there were evidence to substantiate claims of 'monopolization' or predatory pricing' they would not be sufficient to justify self-help in the form of collusion."

Responding to Barnes & Noble's comments, the DoJ asserted that Barnes & Noble was "worried that it will make less money after the conspiracy than it collected while the conspiracy was ongoing" and that that was not a matter for the court to consider. Many of the benefits B&N attributes to collusive pricing could be achieved in other ways, such as lowering costs, the DoJ said.

The DoJ also rejected an implication it said it drew from the Authors Guild submission, that price-fixing should be permitted in the publishing industry because of the cultural role books play in society. "An argument that a particular industry or market deserves a blanket exemption from the antitrust laws should be directed to Congress, rather than the United States or the court," the DoJ stated. It also noted that some members of the Authors Guild, including authors Joe Konrath and David Gaughran, had written in support of the Final Settlement.

The DOJ said that after "careful consideration" of the public comments, it had concluded that the proposed final judgement was an "effective and appropriate remedy for the antitrust violations alleged in the complaint".