This is dog-bites-man news, I suppose, but Barnes & Noble is opposed to the idea of having to compete with Amazon on the price of ebooks. They have made their case in a court filing in the Department of Justice’s lawsuit against Apple and several publishers.
“We think that the Department of Justice got this wrong,” Gene DeFelice, the company’s general counsel, said in an interview. “The settlement destroys independently negotiated commercial relationships. It harms authors, innocent publishers and bookstores, including small-business owners. And it also punishes consumers who stand to benefit from increased competition and lower prices brought about by the agency model.”
Here’s some background on the DOJ suit.
The crux of the disagreement, it seems, is whether the “commercial relationships” were “independently negotiated.” The DOJ contends that there was collusion, because none of the publishers could afford make a deal with Apple that guaranteed higher ebook prices (via the agency model) if its competitors weren’t going to follow suit (and, probably, Apple wouldn’t have made that deal).
Note that it’s not just the agency model that’s at issue, but the “most favored nation” status granted Apple, in which publishers agree that they must use the agency model with all other ebook distributors if they use it with Apple. This is what prevents Amazon from undercutting Apple’s prices.
In any case, Barnes & Noble (who isn’t a party to the suit, just a very interested bystander), claims that prices will go up as a result:
Barnes & Noble replied to us with a statement from general counsel Gene DeFelice, who says “The settlement is likely to lead to predatory pricing and increase monopoly by Amazon.” The settlement will also decrease competition, leading to “less choice and increased prices in medium and long term,” DeFelice said.
This is the scenario that I just don’t get. Right now I buy ebooks on Amazon and read them on the Kindle app on my iPad. If Amazon starts raising prices, I’ll just go buy my ebooks at the Apple store and read them on the Apple reader for the iPad. Further, if ebook prices do go up, that would make the prices of hardcover and softcover books attractive once again, which should please Barnes & Noble (assuming they’re still around at that point). Where does the monopoly pricing power kick in?
Of course, authors are worried, because their royalties may go down. Bricks-and-mortar bookstores are worried, because their sales may go down. The world is changing, for everyone. The question is what can the various parties do–legally–to protect their interests in the new world.