Tuesday, June 5, 2012

Ebooks: Apple, Penguin and Macmillan eloquent the investigation of the Department of Justice

Macmillan, Penguin and Apple each have contested the allegations of the U.S. Department of Justice (DoJ), which is investigating an alleged collusion between Apple and publishers to fix prices of electronic books. Unlike four of their peers, both publishers have so far refused to sign an amicable agreement with the DoJ.

Penguin, in its response [PDF] explains that the principle of agency model (where the sale price to readers is set by the publisher, not the distributor) was proposed by Apple, and it was to take or leave it.

In sum, there was no conspiracy between the big publishers to impose this model. Penguin also rejects the interpretation made by the DoJ conversations and meetings conducted between publishers (phone calls between them have been identified for example by investigators). These discussions would have actually to the creation of common platforms for selling e-books: Bookish and aNobii.

Another meeting was noticed by the DoJ for the agenda, says Penguin, to celebrate the appointment of new CEO of Random House. Macmilan gives the same explanation and points out in his own statement that Random House is presented as not having participated in the alleged conspiracy. Clearly, his presence at this meeting did not make sense if discussions to organize a cartel were on the menu.

Penguin then estimates that adoption of the agency model has not stopped the price competition, but it has simply moved the retailer to the editor. Other changes brought about, Penguin talking about a larger dynamic of these rates, with some books for lower prices, greater choice of electronic media playback and increased wealth in the content. Quoted as such technical input from the iPad to perform more sophisticated books. Penguin cites for example the book Winnie the Pooh, comes with iBooks on the iPad, and whose treatment was lively color and impossible to do on the Amazon Kindle.


The second publisher, Macmillan, also rejects the accusations and poses a severe eye on the comments of the DoJ [PDF]. The editor states that "lack of direct evidence of this conspiracy in the government's complaint is revealing." A survey that lacks structure and that chains "innuendo on innuendo, which distorts the facts and suggests actions that have not occurred. "

About the editors' meeting already quoted and which was apparently discussed the future platform Bookish, Macmillan observes that this joint venture is never mentioned by the DoJ. And to see evidence that his principle is not disputed, and that the meeting in question was legitimate. Finally, Macmillan also returns on the proposed Apple - take it or leave - on the adoption of the agency model. To say that the boss of the editor, John Sargent, has agreed on a strictly unilateral.


Earlier in the week, it's Apple who had given his response to DoJ [pdf]. The manufacturer considered bluntly the government's conclusions, calling them "absurd" and "fundamentally flawed", saying investigators ignored certain elements that go against their convictions and to accuse them of siding with a monopoly rather than competition advocacy.

"The government from a false premise that the" market "of eBooks was characterized before the arrival of Apple with a" robust competition on prices. " This ignores a simple and compelling: before 2010, there was no real competition, there was Amazon.

At that time, when Apple entered the market, Amazon sold about 9 out of 10 electronic books and their influence on prices and product selection was almost absolute. The arrival of Apple has led to a considerable growth in the choice and variety of offers digital books in sales and has improved the quality of reading ebooks.

This is evidence of a dynamic and competitive market. These inconvenient facts are ignored in the complaint. Instead, the government focuses on price increases for a handful of titles. The complaint does not say that all digital books, or even most, have increased after the entry of Apple in the market. "

Amazon is again quoted in another passage "Without the entry of Apple, ebook distribution is essentially controlled by a single distributor (Amazon), then that would own virtually unlimited power in this area. Apple offered to all publishers, large or small, equal opportunity to use it as an agent to sell electronic books directly to consumers through the iBookstore and on non-discriminatory terms. "

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