Inkling Books' Michael W. Perry on the DoJ's E-Book Price-Fixing Settlement

By Michael W. Perry

Yes, the judge in the Google Book Settlement clearly listened to what writers were saying, particularly [the approximately] 90 percent of them who wrote in opposition to it (including me). This judge seems less open to news from the trenches or the facts of the case.

Keep in mind that there’s another and more mature market that demonstrates just how effective agency pricing can be at keeping prices down and quality high. That’s the apps for Apple’s iDevices. One reason I opted for the latest iPad rather than a MacBook Air is the marvelously low prices for impressive iOS software. I just picked up a well-featured, beautifully laid out writing app (Notability). A similar app on a Mac would cost at least $30. This one was on sale for 99 cents and the list price is just $1.99. That’s agency pricing with the price set by the developer precisely like the iBookstore.

My own take is that this move is yet another example of the Chicagoification of the federal government in the last almost-four years. It’s a simple but vile scheme. Create lots of complex and often ambiguous rules, so many that anyone can be branded a criminal. Then apply those rules selectively to ‘encourage’ campaign contributions and crush opponents.

The owners of Gibson Guitar give to Republicans and they’ve been prosecuted on dubious grounds—violating Indian laws that India doesn’t consider violated. Their chief competitor gives to Democrats and is left alone (for the very same alleged crime! —Ed.) Gallup has had a similar clash with the Obama administration over their tracking of unemployment rates and is facing similarly dubious prosecution. And don’t forget the prominent big city Democrats who thought they could ban Chick-fil-a from their cities. They cannot do that, but watching Obama in action, they thought they could. This is nasty stuff.






That’s precisely how the Chicago machine works. If you’re a nobody, you can’t fight the machine. If you’re a somebody, you have a business or real estate in the city. All of a sudden your restaurant is violating a fire code and gets shut down. All of a sudden, you’re violating all sorts of regulations. You’re too buried in hassles and prosecutions to fight city hall.

The scary thing about this book settlement is that it applies a muddled set of pricing rules to at least some publishers and authors, opening the door for similar prosecutions of you and I. Do you want to take on the DOJ when even some of the Big Six publishers didn’t feel they had the resources to do so?

And that’s moving into political free speech.Take a very recent example: The Obama administration has leaked like a sieve in an effort to put a positive spin for itself on Bin Laden’s execution, including the names of Seal Team Six—putting their families at risk. But when one member of that team, Mark Owen, publishes No Easy Day, which has a less flattering look at Obama’s role, his prosecution is threatened. And the administration’s defense of that is almost Nixonesque. The president, Defense Secretary Panetta claims, can’t break the law.

And we should not think that the potential for political censorship is confined to Democrats. More that a few incumbent Republicans find it appealing. That’s why we had FECA–the Federal Election Campaign Act that was overturned by the Supreme Court in Citizens United.

Ponder for a moment what is the most valuable form of free speech. Like me you’ll probably come us with a list that includes:

* Political free speech as opposed to artistic, literary or religious. Artist can’t throw me in prison. Governments can.

* Speech directly connected to those running for political office. These are the people who’ll be running the government.

* Speech made just before elections when the impact is greatest.

* Speech by advocacy groups as opposed to general news outlets. And keep in mind that we know what POV advocacy groups represent. They’re at least being straight forward.

* Speech that is likely to be the most effective at reaching the most people, i. e. TV ads rather than long, serious books.

What I’ve listed is precisely what FECA banned. In fact, during the Supreme Court hearings, a debate developed over whether the act could be used to ban the publication of a book critical of a candidate just before an election. Opinion from those supporting FECA waffled one way and the other, but the general consensus from FECA supporters seemed to be that what they wanted to ban were effective ways to prevent advocacy groups from reaching the great mass of voters. Since a book is unlikely to have that impact, it didn’t have to be banned.

In short, FECA was an effort to target the most critical and effective forms of political free speech just before elections. Those in politics who supported it are the ones who need to be watched carefully. Most of us know who they are.

For my part, I want to live in a society where my opponents—as well as my friends—have the right to influence elections right up to election day, and by any peaceful means they choose. As Martin Niemoller, a German pastor said:

First they came for the communists,
and I didn’t speak out because I wasn’t a communist.

Then they came for the socialists,
and I didn’t speak out because I wasn’t a socialist.

Then they came for the trade unionists,
and I didn’t speak out because I wasn’t a trade unionist.

Then they came for me,
and there was no one left to speak for me.

This fuss is not just about how books are priced. It’s about what rules the government can impose on the books we write and publish—meaning what rationale they can use to ‘come for us.’

In the end, this is a free speech issue. The price I set for my books is my business and not the government’s affair. Prosecuting me for using agency pricing is as much censorship, or at least potential censorship, as kicking down my door in the middle of the night or burning my books in a public square. All it takes is for laws to be selectively applied.

* * *

About the Author: Michael W. Perry was the editor of Chesterton on War and Peace: Battling the Ideas and Movements that led to Nazism and World War II. It won an award from the American Chesterton Society as the best G. K. Chesterton book of 2009.

28 Comments on Inkling Books' Michael W. Perry on the DoJ's E-Book Price-Fixing Settlement

  1. Wow, TeleRead. Just wow.

    There’s a place for everything and this isn’t it. Not at all what I expect from you guys. I’m more than half tempted to delete the feed from my RSS reader.

  2. According to everything I have read, the heart of the DoJ case that by all agreeing to go to agency pricing at the exact same time, the Big 5 and Apple were in fact colluding, which is what’s against the law. Random House, which waited a year to go to agency pricing (and is still using it), was not part of the suit. Neither is Smashwords, which has always let authors and publishers set prices. If I own a gas station and charge $4/gallon for the gas I sell, that’s my right. But if I have breakfast with every gas station owner in town every morning and we ALL agree to change $4/gallon, that’s a violation of antitrust laws.

  3. Wow, talk about an over-the-top slippery slope article with a lot of unrelated side matter. You could make the same argument about ANY law – “if we have laws against littering that MIGHT only be enforced against Republicans, our government is as bad as the Nazis!”

    And the tired old trope about Obama being much more regulation-happy are not borne out by the facts.

    Now I have yet another reason not to buy books from this company!

  4. Totally agree with Rob Siders, “There’s a place for everything and this isn’t it.”

  5. Someone who wants to bitch about politics and praise non-ebooks Apple apps should do it somewhere else. This is in no way appropriate for Teleread. Or I should say, for the Teleread that was, which I’m missing more and more.

  6. I do want to add that in general I LIKE Teleread of late – fewer press releases regurgitated verbatim – just think this particular piece is poorly reasoned and doesn’t reflect well on Inkling.

  7. Wow this author missed the mark. Agency Pricing is like a monopoly. They do nothing but squeeze the costumer for all it can. The DoJ case was not about the publishers going to a agency pricing but colluding on attacking Amazon and price fixing. So you have a book Mr. Author. So sell it. The distributors that buy your book should have every right to charge whatever they feel like to their customers. It is called a free market and is what America’s economy was founded on. If you don’t like it, try to sell your book yourself to individuals. Odds are your not going to nearly sell a tithe of what you would sell going through distributors. This might be stretching it a bit, but I see agency pricing more like communism. They told everyone what their labor was worth and that was final. The publishers setting the price on their books smacks of the same idea.

  8. For what it’s worth, I think there’s a place for all opinions to be aired, no matter how wrong-headed they are. When you don’t have to spend the time and effort chasing it down, you have more energy left over to use pointing and laughing at it.

  9. The photo of Obama burning books is so completely ridiculous. Seriously, this writer runs a major company?

  10. So…price-fixing, anti-competitive behaviour, and colluding to rip off both consumers and authors is a Good Thing because Democrats?

    Somebody seriously needs to up his lithium dosage.

  11. And how does a political diatribe relate to ebooks? Are we now going to have commentators like FOX or MSNBC whose agenda is the purpose?

    And to say what has been said before, Agency Pricing is legal but the collusion wasn’t. Or, in political mode, it wasn’t the crime it was the cover up.

  12. @Greg M. : “And how does a political diatribe relate to ebooks? ”

    Because clicks?

    Although I think the DoJ is acting like a bull in a china shop in this particular case and the Law of Unintended Consequences has me nervously looking over my shoulder, I don’t think we can completely divorce eBooks and public policy.

    Though this post seems a bit over the top in a Libertarian /government conspiracy kind of way that I wasn’t expecting from Teleread.

  13. Wow . . . anyway, I just want eBooks to be fairly priced again. Penguin has some of the greatest works of the 20th century locked up with extremely prohibitive pricing. All of Steinbeck, Orwell, Hemingway, and Faulkner’s titles are priced between $12.99 – $18.99, with most at the higher end. This is ridiculous. The difference between your iStore app and eBooks is that the publishers actually NEVER want to offer you any deals, which is why they have banned discount codes and other promotions. Their blatant collusion brought about this lawsuit, not some imaginary Obama power grab to strip people of their rights. Does anyone remember the PATRIOT ACT? There is an act that has actually eroded our Constitutional rights to privacy, and that was a REPUBLICAN thing. I don’t see Obama making sure that a shadow court can prosecute me for the books I have on my library list (that can now be secretly accessed without a warrant, ect, ect).

  14. I am completely shocked that this diatribe was published here. Previously we have read opinions opposed to the DOJ settlement which stated their case with reason and I have no quarrel with that. This piece was ridiculous!

  15. Re the title, is Michael W. Perry owned by Inkling, does he work for Inkling? What does Inkling have to do with this screed? Does Inkling endorse this drivel? Curious readers want to know.

  16. Aha. There’s Inkling the ebook platform ( and then there’s indy book publisher Inkling Books. He is with the latter. And when I say “with” it sounds like it’s a tiny one-man operation.

  17. Inkling Book’s Michael Perry posted a surprising and a little shocking rant on the DOJ ebook settlement.

    Even though it is a misunderstanding of the DOJ charges that is not really my problem with the piece. My problem with this editorial lies in the fact that it is not about the book industry at all. The unsubtlety of the articles political propaganda is shocking and not at all what one would expect on and it makes the choice of book cited in Mr. Perry’s bio, Chesterton on War and Peace: Battling the Ideas and Movements that led to Nazism and World War II both offensive and ironic.

    In and of themselves varied opinions on the ramifications of the DOJ case are perfectly justified. One of the evolutionary changes as a result of digital publishing is the shattering of the barrier to entry into publishing. The issues facing publishers as they struggle with digital disruption are complex and fundamental and extrapolations and interpretations will continue to be varied as those new to publishing endeavor to fill in gaps in experience and knowledge. As an industry we need to accept that the more populist part of our business may have different concerns than the more corporate part of the business. Who controls price, retailers, publishers, or consumers is a constructive conversation we should be having.

    Unfortunately this piece is neither constructive or about publishing.

  18. The alleged collusion between Apple and the agency 5 publishers would have cost me several thousands of dollars if I had purchased my ebooks after agency pricing went into effect instead of buying them while they were on sale at Fictionwise. Michael Perry’s complaint about setting ebook prices is disingenuous at best. Unless their contracts were poorly written, before the agency pricing went into effect the publishers were setting a price for their books – the wholesale price. Also, other publishers, like Smashwords and Random House, were not involved in the DOJ lawsuit because they were either not involved in the discussions with Apple or chose not to switch to agency pricing along with the rest of the publishers.

    Furthermore, the comparison of the mainstream publishing business, which is an oligopoly controlled by 6 companies, with Apple application marketplace, which has applications sold by hundreds of thousands of developers is dubious. I would argue that Apple’s application marketplace is comparable to Amazon’s direct ebook publishing.

    The rest of the article is a political rant, full of unsubstantiated allegations, drawing unwarranted conclusions. I’m surprised that I’m the first to invoke Godwin’s law, for comparing the Obama administration with Nazis.

  19. Not to mention the numerous fallacies contained therein. I can’t believe this was posted on Teleread!

  20. Wow! My article was originally just a posting to a different article, but TeleRead asked my permission to upgrade it to an article and I agreed. They also asked me to respond to all the remarks it triggered, so that’s what I’ll do here.

    First, Inkling Books is, as some have pointed out, a little company. In fact, it’s just me and an aging iMac and MacBook. I’ve been in publishing for some thirteen years now, so I do know a little about the industry. I’ve been writing since the early 1980s, so I know something about that too. My first writing-related job was working for Microsoft when it had 600 employees.

    In the past, I concentrated on adding value by creating high-quality versions of existing public domain texts with serious content. Michael Crichton specifically praised my edition of G. K. Chesterton’s Eugenics and Other Evils in the bibliography at the back of Next, and Martin Gilbert, Winston Churchill’s authorized biography, has had some kind words to say about my Chesterton on War and Peace: Battling the Ideas and Movements that Led to Nazism and World War II. Chesterton, I point out, was warning about the dangers Germany posed to the peace of Europe long before Churchill.

    That business model worked well when print books reigned and people who wanted to read what a classic author said on something on something had to buy a book from someone. Since my books were, I like to think, the best editions, they bought mine. That model doesn’t work so well when potential reader can get the original from Google or Internet Archive for free. It’s hard to compete with free, even if what you have is a bit better. As a result, I’m moving into writing books of my own. I currently working on a series of books based on when I worked in a children’s hospital.

    Keep in mind that what I wrote in that TeleRead article is informed by my experience with our legal system. In 2002, I was sued by Tolkien estate lawyers who claimed that my Lord of the Rings chronology, Untangling Tolkien, infringed my copyright based on some dubious 1998 opinions issued in the Second Circuit. I won handily. They bailed out rather than face summary judgment and the judge later dismissed their lawsuit ‘with prejudice.’

    But the experience taught me just how much trouble a deep-pocketed foe could create using our legal system. I had excellent arguments on my side, as my win demonstrates, but it still took almost a year for my case to work its way through our ponderous legal system. And I was fortunate. When I did graduate work in medical ethics (studying law in a medical school), I learned enough law to provide most of my own defense. Most of you aren’t that fortunate.

    That’s why I regard with a high degree of suspicion any action that the federal government may take against those who publish or distribute books. The Tolkien estate had deep pockets. They were, as I liked to point out at the time, perhaps the second richest literary estate on the planet. But even they had their limits. They spent perhaps $300,000 trying to stop my book and failed. And a key reason they bailed out rather than go down fighting at the summary judgement stage, was the fact that the Manhattan law firm I was fighting could not afford the disgrace of getting whipped by a little two-Mac publisher in latte-sipping Seattle.

    The Department of Justice faces neither of those limits on its power. It has almost unlimited funds to pursue those it dislikes. That’s one reason why some of the largest publishers in the country decided to settle out of court. Do any of you think they have more resources than them?

    And the politicians that lie behind the DOJ under either party have agendas that are very different from those of law firms. Even if you, after enormous effort, managed to lick them, those politicians can still posture that they were attempting to serve the public. And alas, there are always some members of the public who believe them.

    You can read the posts from those who believe that an evil Big Six publishers were conspiring to keep prices high to see that that sort of posturing works. I doubt that’s the case. The DOJ leaped into the fray after little more than covert meetings with Amazon. They didn’t understand what publishing involves or how unstable and unsettled the ebook market was at that time. All they knew was that attacking some major publishers would, they thought, make good political theater. It would make them look like they were standing up for the consumer. That they might not actually be doing so didn’t enter their minds. Politics is about image and not substance.

    As for that alleged conspiracy, keep in mind that almost anything can be contrived to look like an evil conspiracy. It’s the last resort of a prosecutor who has nothing else to go on. And note that what these publishers were talking in their meetings about was what everyone in publishing was talking about–the danger to a healthy ebook market posed by the fact that Amazon had a 90% market share and was attempting to crush opponents by selling ebooks below cost.

    In comparison, at the time of its alleged crimes, Apple had 0% of the ebook market, not a good foundation for an alleged schemer who wants to force prices higher. And even today, Apple has shown little interest in the ebook market. Their ebooks can only be read on their iDevices. Notice what the core of the DOJ claim is: That consumers wanted to pay a large sum ($500 and up) for an iPad, so they’d have the great privilege of paying more for ebooks from the iBookstore than those same ebooks cost on Amazon. That move, they claim, is what forced the giant Amazon to relent. That not only doesn’t pass the smell test, it doesn’t pass a sanity test.

    I neither like nor dislike the major book publishers. But I’m actually happy that they were doing what I lacked the resources to do–meeting and discussing how to keep Amazon from utterly owning the ebook market in this country. Going after Amazon is what the DOJ should have been doing. And my main beef about this dispute is that, in the madness that is politics and law, something that is perfectly legal, agency pricing (how Apple sells apps), may become illegal for all of us and not just the Big Six.

    As a writer, I like agency pricing. Writing and selling books, especially ebooks, isn’t like remodeling homes or manufacturing cars. Nothing forces an ebook to have a particular price. I like being able to play with prices to determine what will give me the best, although typically low, income for all the time I’ve invested. I like the fact that agency pricing lets me publicize an ebook better by setting a zero price that every retailer has to immediately follow. One of my books about my time at that children’s hospital castigates how badly the hospital treated a 15-year-old girl with serious emotional issues. That’s a message I want to get out more than I want to make money, so the ebook version will be free.

    That’s why I don’t want any federal agency stepping in and saying that my pricing is too high, too low, or too anything like the DOJ is attempting to do with Apple and the Big Six. That’s why I also got ticked off when Amazon and Apple both had contracts that said I couldn’t sell my ebooks cheaper elsewhere. One of my three hospital books is about when I worked with kids who have leukemia. If I want to let a leukemia organization have the ebook for free and sell it at a below market price to raise money, that’s my business and none of Amazon’s or Apple’s.

    I should also make one additional comment about the contemporary political portions of my comments. Our country elected Obama based on media hype that had almost no content, as all the “Hope and Change” bumper stickers demonstrate. Obama had done so little in politics, that what he could (talent) or would (agenda) do was unknown. After four years, that has begun to change.

    In foreign policy, the best analysis of Obama is Dinesh D’Souza’s The Roots of Obama’s Rage. In it, he simply takes Obama at his word that his beliefs come from “dreams from my father.” His father was rabidly anti-colonial and interpreted all international events through that lens. Obama does the same.

    That’s why Obama bowed to the Saudi king. To you and I, that king is a repressive, theocratic dictator. To Obama, he’s the victim of Western colonialism (Britain’s rule over Saudi Arabia decades ago). That’s also why our Middle Eastern policy is collapsing. Obama thinks the region’s radical politics are driven by anti-colonialism and, as an anti-colonial, they should like him. That’s why it’s coming out that he paid so little attention to intelligence warnings about trouble there on the anniversary of 9/11. He doesn’t realize that radical Islam isn’t another form of anti-colonialism. It’s an aggressive, violent form of religious colonialism. If he isn’t Muslim, he is an enemy.

    That matters little to us as publishers and writers. What does matter is what drives Obama’s domestic agenda. There, he’s clearly not a liberal in any traditional sense. What he believes and does in domestic politics is driven by the fact that he has spent virtually his entire adult life in Chicago’s corrupt machine politics. There, building codes, fire codes, and all sorts of laws don’t exist to serve the public. They exist to protect and benefit the political machine. Pay off the right people, and a slum lord can rent decaying, rat-infested apartments to the poor. Join some organization attempting to reform the city’s politics, and all of a sudden your well-run business is found violating a fire code or some employee, suspiciously active in city politics, makes a claim of sexual harassment or racial discrimination. You have to get out of reforming city hall simply to fight city hall’s attacks on you.

    That’s not a politics that either liberals or conservatives support. You saw that when liberals stood up to defend Chick-fil-A’s right to not be kept out of cities because of the political views of their executives. Liberals know that, if those sort of principles start being applied, then other cities and towns could ban Ben and Jerry’s ice cream shops.

    But that is the sort of Chicago machine politics that Obama is trying to federalize and apply to the entire nation, as the examples I gave illustrate. And he is finding some supporters, as you can see from the other-than-Chicago politicians who briefly attempted to jump on the ban Chick-fil-A bandwagon. If Obama’s domestic agenda is judged a success–and by that I mean that it effective crushes opponents and he gets reelected–then look for others to adopt it.

    Much of what I intended to say was a simple warning. If major publishers, guitar makers, and fast food outlets can be threatened by seemingly legitimate government action that hides a political agenda, then the little guys–meaning you and I–certainly aren’t safe. Whether we are Democrats or Republicans, liberals, libertarians, or conservatives, we have an strong interest in making sure that our country isn’t run on the model of Chicago’s city hall.

    That, you may remember, is what all the fuss about Watergate was about. There, it wasn’t what Nixon actually did, which wasn’t much, but what he talked about doing, including enemies lists and putting the IRS after opponents. We stopped it then. We need to stop it now. That’s my basic point. And I point out just how easy it would be for writers to be placed on some modern day enemies list.

    I’ll close with some words from G. K. Chesterton that are so important, I put the on the back of a book by him that I published.

    “It is not by any means self-evident upon the face of it that an institution like the liberty of speech is right or just. It is not natural or obvious to let a man utter follies and abominations which you believe to be bad for mankind any more than it is natural or obvious to let a man dig up a part of the public road, or infect half a town with typhoid fever. The theory of free speech, that truth is so much larger and stranger and more many-sided than we know of, that it is very much better at all costs to hear every one’s account of it, is a theory which has been justified upon the whole by experiment, but which remains a very daring and even a very surprising theory. It is really one of the great discoveries of the modern time; but once admitted, it is a principle that does not merely affect politics, but philosophy, ethics, and finally, poetry.”

    And one way to attack free speech is make the debate about anything other than that freedom–the alleged danger of the words, the taxes paid or not-paid by the person speaking them, and so forth. I not only need what I say to be freely published, I need to be able to hear what my opponents are saying, because I can learn from them.

    –Michael W. Perry, Inkling Books, Seattle

  21. Huh. Mr. Perry’s response started out reasonably enough. OK, I still disagree about the agency model but I can see how it benefits a small publisher. Fair enough. But then he COMPLETELY goes off the rails.

    OK, you want to hear what your “opponents” are saying? 1) Watch this video of President Bush bowing to the Saudis.

    Oh, and one more thing. I read Teleread for the ebook news, not Islamiphobic/racist garbage. Please, no more. We all know how to find your website now. Go publish these views proudly for the world to see. I’m sure some people will buy it!

  22. Not only do I think this was a bit too stridently political for what I visit Teleread for, I find it to be absolutely ridiculous and borderline offensive to quote Niemoller over EBOOK PRICING.

  23. Stuart Goldkind // September 14, 2012 at 5:09 pm //

    Mr. Perry needs to stop watching Fox “news.”

  24. While there can be talk about DOJ and the actual need to sue Apple and the pubishers, Perry, it seems to me, is using the context as a mere pretense to rant politics without finesse. All he needs is a shoe and a podium. Obama has nothing to do with ebook prices. I don’t think the DOJ is doing me favors in the long run; Agency Pricing doesn’t get my undies in a bundle as it does with other reader; but really leave politics out of it

  25. Stuart, I couldn’t have said it better myself.

  26. Oh yeah, that Niemoller quote. Seems to me that Mr. Perry has completely missed what you should REALLY have learned from that horrible period in history: that demonizing an entire religious/ethnic group with sick little conspiracy theories leads nowhere good.

    Mr. Perry, log out of your conspiracy websites and go read some actual history books, electronic or otherwise.

  27. Going back to the DOJ and the Apple + the Agency 5, I reiterate, the DOJ is not going after the agency pricing model, they’ve never made any attempt to stop Perry from using the agency pricing model, nor Random House, which appears to not be part of the alleged collusion because they waited a year to switch to agency pricing, nor has the DOJ gone after Smashwords or any of the other small publishers that have gone to agency pricing. If Steve Jobs hadn’t been making the comments he did before and after agency pricing went into effect, or the publishers all switched to agency pricing on the same day, and effectively increased prices, in some cases quite substantially, the DOJ would not have initiated the lawsuit.

    I think this quotation Jobs gave to his biographer was especially damning: “We told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.’”

    The DOJ settlement is not a judgement on agency pricing, the settlement will allow the publishers to go back to it eventually, if they so desire. The settlement is a form of punishment for unlawful collusion to raise prices. The DOJ hasn’t required the publishers to set any prices at all, they’ve only settled with 3 publishers to go back to wholesale pricing contracts for the next two years.

    In short, over the whole DOJ settlement, you are totally ranting over things that are not true, and the less said about the anti-Obama, anti-Democratic party stuff, the better, except to say that I am sure that your rebuttal is even less convincing than your original article. Teleread should be ashamed to have made this a keynote blog post.

  28. Thanks for the inspiration to go make a donation to the Obama campaign, Mr. Perry. Now I feel clean again.

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