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Trouble In E-Book Land?

August 26, 2011 | Out of Print | Comments (0)

Earlier this month a class-action lawsuit was filed in the United States which claims that "Apple Inc. and five of the nation’s top publishers, including HarperCollins Publishers, Hachette Book Group, Macmillan Publishers, Penguin Group Inc. and Simon & Schuster Inc. illegally fix prices of electronic books, also known as e-books."

The anti-trust litigation claims that Apple and the big publishers were worried that Amazon was on the way to being the dominant e-book reader and e-book retailer, thanks to the very popular Kindle e-book reader and e-book store, which featured significant discounts on some titles. The publishers didn't want the rapidly expanding e-book market to be based on discounts; instead they wanted to establish set prices for titles that all retailers would follow. Apple didn't want the Kindle to dominate the e-book reader market or expand into music and movie sales. 

When Apple entered the market in 2010 with the iPad and iBook Store, they agreed to the new pricing structure ("agency model") the publishers had developed and listed most titles at $14.99, compared to $9.99 at Amazon. The publishers then forced Amazon to adopt the new higher prices. As the lawsuit says, "if Amazon defied the publishers and tried to sell e-books below the publisher-set levels, the publishers would simply deny Amazon access to the title. The defendant publishers control 85 percent of the most popular fiction and non-fiction titles."

The result has been up to a 50% increase in the cost of e-books from these big publishers over the last year. The allegations of price fixing are just another negative aspect about the commercial e-books market, which also has problems such as excessive restrictions on ownership via Digital Rights Management (DRM), piracy, and a crowded e-reader marketplace.

As we saw earlier this year when Harper-Collins announced plans to limit the circulation of their e-book titles by libraries, changes in the commercial e-book market will have an impact on public libraries. What changes will this class-action litigation bring in the coming years?



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