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    Thursday
    Jul192012

    Senator Charles Schumer Says, Drop E-Book Lawsuit

    If you love books you should be following the Department of Justice’s anti-trust lawsuit against Apple and Macmillian charging that they colluded with regard to e-book pricing.

    The suit took an interesting turn when New York Senator Charles Schumer wrote an opinion piece titled Memo to DOJ: Drop the Apple E-Books Lawsuit in the Wall Street Journal Tuesday.

    Courtesy of ewidge under Creative Commons

    “The suit will restore Amazon to the dominant position atop the e-books market it occupied for years before competition arrived in the form of Apple. If that happens, consumers will be forced to accept whatever prices Amazon sets,” said Schumer, a ranking Democrat on the Senate Judiciary Committees’ Subcommittee on Anti-Trust, Competition and Consumer Rights.

    At issue is the question of who sets the price of e-books. It’s an issue we’ve looked at here before. In a 2010 post, A Third Wave Rocks Publishers’ Leaky Boat, we examined the implications of Amazon setting e-book prices at an artificially low $9.99 to establish a market for its new Kindle e-reader. When Apple entered the e-book marketplace with its iPad it agreed to let publishers set their prices over a range beginning at $9.99. Many in the book industry hailed the move as providing some competition for Amazon.

    It was that agreement that led to the Justice Department’s suit contending is that the deal would cause consumers to pay higher prices for e-books.

    But, said Schumer, “…the average price for e-books fell to $7 from $9, according to a filing in the case. The Justice Department has ignored this overall trend and instead focused on the fact that the prices for some new releases have gone up.”

    The issue of the future of e-books is at the heart what will happen in the publishing industry. The website Galley Cat reported that, “Digital books are now “the dominant single format” in the adult fiction category, according to a new BookStats joint report from the Association of American Publishers and the Book Industry Study Group. eBooks exploded in the adult fiction category last year, accounting for 30 percent of net publisher sales in 2011–up from 13 percent the year before.”

    It’s in the interest of consumers to maintain competition in the e-book market. That was the point of the anti-trust suit. Schumer contends that the suit’s result would be just the opposite because it would leave Amazon virtually unchallenged in the e-book market. He thinks we should all be concerned.

    “If publishers, authors and consumers are at the mercy of a single retailer that controls 90% of the market and can set rock-bottom prices, we will all suffer,” said the senator. “Choice is critical in any market, but that is particularly true in cultural markets like books. The prospect that a single firm would control access to books should give any reader pause.”

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