Likely you don’t usually turn to The Rumpus for your serious economic news, but it’s an important weekend, so I’m putting on an old hat here: Monday is the deadline for the public to comment on the settlements in the antitrust lawsuit the Department of Justice brought against several publishers, and Apple, for colluding against Amazon. The settling defendants are the major publishers Hachette, HarperCollins, and Simon & Schuster. Approval of the settlement is imminent, but under the law the Department of Justice must seek public comment on the settlement beforehand.
As of a little over a week ago the DOJ told the court they had received over 150 public comments. That’s an unusual amount; for context, in the Microsoft lawsuit you may remember hearing a lot about a few years back, the Department received “only” 47.
Many people I spoke to this week had some vague idea they ought to submit a comment but weren’t sure of why, or what to say. I am here to tell you that you are not alone.
And usually this is the place where the writer admits that they are not a lawyer and they aren’t really familiar with the legal issues involved. Well, I am a lawyer, though not an antitrust expert by any means. I still think the issues are a bit complicated to give to people who have not gotten themselves ridiculously into debt to read about carbolic smoke balls.
One piece of evidence: this week the New Yorker published a long piece by Ken Auletta on the lawsuit and the settlement (not online, which is cruel cruel cruel, New Yorker), and as Publisher’s Lunch immediately pointed out, got the terms of the settlement slightly wrong. Oops. It wouldn’t be such a big deal — even to my eyes the settlement decree is a byzantine read — except that what the public has been invited to comment is precisely the terms of the settlement. You or I might want to write a long screed to the Justice Department about this or that part of Amazon that we greatly dislike; we might want to argue that breaking up Amazon’s monopoly over e-book sales is the very definition of promoting competition, even if involves fairly bald price-fixing. But that is not really what is being asked here. What the court must consider under the law is if this settlement is in the “public interest.”
Whatever else one might think of this very complicated issue, I don’t think it is.
Settlements are funny things. Though sometimes they look an awful lot like admissions of guilt, just as often they aren’t. Most companies settle lawsuits these days not because they think they have no case but because actually fighting a case is enormously expensive, not to mention stressful. Not to be overly pro-defendant, but it is the reality that the structure of the modern American lawsuit is a giant pain in the ass. The process of discovery, where the parties exchange the evidence they plan to use, is a monster in and of itself, devouring trees and server farms the world over.
Now, the only people who know the true calculus of why the three settling publishers settled work there. Even their public comments on the matter will be the result of long discussions with lawyers about what and what not to say. But several told the New Yorker they wish they could have fought this, that they do not feel they actually fixed prices. Auletta suggests the legal picture is bleak but without getting into the details it’s far more complicated than he says. There are people already arguing that it upends traditional antitrust doctrine, and there are certain signals available only to those with antitrust lawyer goggles on that the Department of Justice knew this, and drafted its complaint to that end.
In fact the best objections are found in a filing from Barnes & Noble. Perhaps you never imagined hearing that, brought up as many of us were in the age of You’ve Got Mail and the evil of the megabookstore. But they hired a very good lawyer, David Boies. His brief to the court points out that what this settlement proposes to do is not just forbid any future price-fixing. It proposes to restrict the settling defendants from negotiating any kind of pricing agreements with any e-book retailer for the next two years.
Why does Barnes & Noble care? Well, that prohibition on pricing agreements includes not just Amazon, but the relatively innocent bystander (bear with me here) Barnes & Noble. It simply takes one perhaps overly-rigid way of doing things — the agency-pricing model you’ve heard about and which I’ve glossed over for simplicity’s sake — with another.
In no universe I am aware of does this count as “letting the market decide.” It will skew the outcome of this enormous upheaval the books industry is undergoing at the moment, and not in a way that necessarily benefits book buyers or book authors. And we are still a year away from a trial on the merits of the case. If the digital era has taught us nothing, it’s that so much could change in that time.
These discussions tend to dissolve very quickly into hyperbole on both sides; either Amazon is evil, or the publishers are. I tend to take a less self-sure view of all of it. If you read along with me on Saturdays you will have noticed that I am at best a qualified booster of traditional publishing. I think the way the big publishers do things could do with some shaking up. I think that’s ultimately good for all of us. I don’t think it’s wise for them to follow down the garden path the recording industry set before them. There are many bookish people who hate ebooks but there are others too. I think there is room for all of us, but it’s going to take some puzzling out to see how we can all best complement each other.
My point is that I don’t think this settlement is the best way for that to happen. Flexibility will be key for everyone as we start to figure out what kind of role writing will have in an internet-driven culture. Whatever settlement any of the defendants make, it shouldn’t be about carving even small bits of our collective future in stone.
There’s no vote on this, of course, and it’s hard to say whether any court will put much weight on the comments you send them. But at the very least, there’s this: any judge deluged by well-written letters on the subject will at least have to consider the possibility that the “public” doesn’t see its interest protected here, at all.
If you do choose to comment, the Authors’ Guild recommends the following:
You may send comments by regular mail or e-mail to:
John R. Read, Esq.
Chief, Litigation III
Antitrust Division, United States Department of Justice
450 5th Street, NW, Suite 4000
Washington, D.C. 20530Please include a reference to the litigation:
United States v. Apple, Inc., et al., 12-cv-2826 (DLC) (SDNY). Comments on Proposed Final Judgment as to Defendants Hachette, HarperCollins and Simon & Schuster.
