The schadenfreude just keeps on getting freudier. The Wall Street Journal reports that the five publishers involved in the Apple trial have filed an objection to the Department of Justice’s proposed settlement terms for Apple. The publishers complain that the settlement terms would punish them twice.
"The provisions do not impose any limitation on Apple’s pricing behavior at all; rather, under the guise of punishing Apple, they effectively punish the settling defendants by prohibiting agreements with Apple using an agency model," lawyers for the publishers said in papers filed in federal court in Manhattan.
The publishers aren’t the only ones to make this objection. Philip Jones at FutureBook has coverage of a number of other commentators complaining the publishers are getting punished twice. Funny how that works: if you punish either side of a deal between two entities, you effectively punish them both. So if you punish both sides of the deal separately…well, see below.
The big deal for the publishers is that Apple can’t enter an agency pricing contract for five years, rather than the publishers’ two. This means that they can price books at whatever they want to, including undercutting agency-priced stores. This could prevent the publishers from being able to reimpose agency pricing on the other stores, because doing so would give Apple a competitive advantage.
The publishers also complain that, without price controls, they don’t have any way to keep Apple from selling their entire catalog at a net loss, the way that their settlement deals are supposed to prevent booksellers from doing. (Actually, they do have such a way. It’s called antitrust law. Selling the entire catalog at a net loss would be illegal predatory pricing. Do they really think Apple would be so eager to be hauled into antitrust court again?)
The funny thing to me is, this reminds me of the time way back when the original settlement with the publishers was going through, and Apple complained that it would have the effect of punishing Apple before it ever went to trial. The judge didn’t have much patience with that argument then, and I doubt she’ll have much patience with the publishers’ now.
Nonetheless, it has an amusing kind of symmetry, doesn’t it? Kind of like bookends.
CNet reports that a hearing on the proposed remedies is set for this Friday.
(Hat tip to Nate Hoffelder.)