Judge approves a settlement between DOJ and publishers in landmark opinion
Judge Cote’s decision came despite “voluminous and overwhelmingly negative” comments on the case and the proposed settlement, but Cote defended her decision.
“Some comments were filled with extreme statements, blaming every evil to befall publishing on Amazon’s $9.99 price for newly released and bestselling e-books, and crediting every positive event – including entry of new competitors into the market for e-readers – on the advent of agency pricing,” Cote wrote in her 45-page opinion. “Even if Amazon was engaged in predatory pricing, this is no excuse for price-fixing,” she continued, asserting that “the familiar mantra regarding ‘two wrongs’ would seem to offer guidance in these circumstances.”
The decision comes as a decisive victory for Amazon, whose pricing model Apple and five publishers attempted to topple with its agency pricing plan. The e-retailing giant is expected to drop the price of many e-books back to $9.99 or lower following the decision, pressuring competitors to do the same.
But Cote’s opinion was seen as a blow for hundreds of other parties, including the Authors Guild, the American Booksellers Association, Barnes & Noble, and other e-book retailers who opposed the settlement. In their formal complaints, these parties predicted the settlement would return the e-book marketplace to where it was several years ago when Amazon controlled close to 90 percent of the market and other retailers were marginalized.
“It’s devastating to bookstores,” executive director of the Authors Guild Paul Aiken told the Wall Street Journal. “For two years the settling publishers must allow vendors to discount e-books at any price they want. The court acknowledges that this restores the status quo conditions before 2010, when Amazon was able to capture 90 percent of the e-book market. The Justice Department is reshaping the literary marketplace without submitting a single economic study to the court to justify its actions.”
