The Wall Street Journal (a division of Rupert Murdoch’s News Corporation) has reported that another of News Corp’s properties, the publishing house HarperCollins, has been informed of an impending US Justice Department lawsuit alleging antitrust violations regarding e-book pricing. Other parties involved in this include Apple, Penguin Group, Simon & Schuster, Hachette Book Group, and MacMillan. Settlement talks have apparently been underway for some time.
If you’re a Kindle owner, you probably remember a little flap between Macmillan and Amazon when Macmillan refused to comply with Amazon’s $9.99 Kindle book pricing structure. Amazon briefly pulled their offerings until Amazon capitulated [now, we may know why]. Prices rose 50%+ and people like me stopped buying Macmillan e-books with witless abandon : ) [It’s a PRINCIPLE thing].
The WSJ piece is an interesting illustration of the corporate sensibility of Apple’s Steve Jobs vs. Amazon’s consumer-centric model.
Here’s a quick quote from the Wall Street Journal’s reporting; you can read the full article at your convenience:
“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,'” Mr. Jobs was quoted as saying by his biographer, Walter Isaacson.
The publishers were then able to impose the same model across the industry, Mr. Jobs told Mr. Isaacson. “They went to Amazon and said, ‘You’re going to sign an agency contract or we’re not going to give you the books,’ ” Mr. Jobs said.
Update 3/9/12: Here’s an interesting take on the same topic, from Bloomberg Business.