Commentary
Comic Relief In Ebook Lawsuit
- by Wendy Davis , Staff Writer @wendyndavis, September 5, 2012
When Bob Kohn, a longtime entertainment attorney, wanted to weigh in on the Department of Justice's antitrust lawsuit about ebook pricing, he did what lawyers typically do: He drafted papers -- filled with dry legalese, footnotes and citations to precedent -- and then asked U.S. District Court Judge Denise Cote for permission to submit his 25-page brief.
This week, Kohn did so -- but it's safe to say that his filing wasn't what Cote had in mind: He submitted a five-page comic strip about the case.
The cartoon shows Kohn explaining to his wife why he believes the DOJ's proposed settlement is a bad idea. (It's illustrated by Julia Alekseyeva, a student he found through his daughter, according to The New York Times.)
His argument itself raises many of the same concerns that other opponents have brought up. Kohn's cartoon alter-ego says that Amazon's $9.99-per-book price for bestsellers was "predatory" and bad for consumers -- presumably because Amazon would have monopolized the ebook market had it continued to sell so cheaply. The character goes on to argue that the DOJ shouldn't have targeted companies for allegedly trying to bring the price up to a more "efficient" level.
The lawsuit dates to April, when federal prosecutors sued Apple and five book publishers -- Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster -- for allegedly conspiring to increase the price of bestselling ebooks from Amazon's $9.99-per-download rate. The complaint alleged that Apple forged a deal with the publishers to move to move to an "agency" model -- meaning that the publishers would set prices and Apple would act as their agent, selling the books for a 30% commission. Before, the publishers and Amazon worked on a wholesale model, which involved Amazon purchasing the books at wholesale and then retailing them for whatever price it wished -- often at deep discounts.
Three of the publishers -- Hachette, HarperCollins, and Simon & Schuster -- agreed to settle the complaints.
If Cote approves the deal, the companies will have to end their contracts with Apple, and also end any contracts with retailers like Amazon that limit their ability to offer cut-rate prices.
Cote hasn't yet indicated whether she'll accept Kohn's submission in the case. But even if she doesn't, his brief will almost certainly draw more attention than a typical friend-of-the-court filing in an antitrust lawsuit.
Wendy Davis is a Senior Writer at MediaPost. You can reach Wendy at wdavis@mediapost.com
These publishing houses are fools. The answer is simple: Sell the ebook themselves. They don't need Amazon or Apple. Their mindset is so locked into the publisher/distributor model (we publish, you distribute), they don't realize they can be both. You don't need a major capital investment like warehouses, trucks, store fronts, etc., to set up an ebook distribution system like you would for physical books. Once these houses realize this, Amazon would have to play by their rules, or its days as an ebook distributor are numbered.
I already do that myself but it is difficult to compete with Amazon's dominance in the marketplace. So the concept of Manufacturer's Suggested Retail Price does not wash with Amazon, which discounts the prices no matter what they are. If you post an ebook for $9.99, Amazon will find a way to take it lower than that, then compensate the publisher based on that price. As for playing by the rules, Amazon does not care. It will do whatever it wants. BTW, ask Bezos why he has not issued a dividend to his shareholders if he claims he has made so much money. As usual with all operations at Amazon, he will not respond.