The Collusion Case Against Publishers
I was asked what my thoughts are about the US Justice Department telling Apple and five major publishers (including Macmillan, where my Tor books are published out of) that it plans to sue them for collusion regarding ebook prices. My immediate thought is that if all of them were in fact stupid enough to have colluded, then sue away, United States Justice Department. If they were dumb enough to collude, then they get what they get.
My next thought, however, is that I’ll be interested in seeing if the case can be proven, because I don’t think they had to act in concert. That Apple would be aware that publishers would be desirous of agency pricing in a general sense is not hard to imagine; Apple doesn’t enter a market without knowing the players and how to leverage themselves to make a maximum splash and receive a maximum benefit. Once Apple made it known it would accept agency pricing (but not selling books at a higher price than other retail competitors), the publishing companies didn’t have to act in concert, although one of them had to be willing to bell the very large cat called Amazon by moving to the agency model.
I’ve long had a personal hypothesis — not based on any inside information, but simply my own read on the matter, I should be clear — that the reason it was Macmillan that challenged Amazon on agency pricing was that Macmillan is a privately held company, and thus immune from being punished short-term in the stock market for the action. Once it got Amazon to accept agency pricing, the other publishers logically switched over as well. This doesn’t need active collusion; it does need people paying attention to how the business dominoes could potentially fall.
Again, maybe they all did actively collude, in which case, whoops, guys. Stop being idiots. But if they did not, I suppose the question is: At what point does everyone knowing everyone else’s business, having a good idea how everyone else will act, and then acting on that knowledge, begin to look like collusion (or to the Justice Department’s point, actively become collusion)? My answer: Hell if I know, I’m not a lawyer. I do know most of these publishers have a lot of lawyers, however (as does Apple), and I would imagine they have some opinions on this.
The Wall Street Journal article I point to above notes that there has been discussion of a settlement, and specifically that “One idea floated by publishers to settle the case is to preserve the agency model but allow some discounts by booksellers.” I would not be entirely surprised if in the end, for what everyone involved would claim is for entirely practical reasons, and with a canny rhetorical nod toward “creating a vibrant market and protecting consumer choice,” there is a settlement along these very lines. I suppose we will see.
The Justice Department is nominally working in the interests of the American people in this case, but this is also something of a proxy battle between these five publishers (and Apple) against Amazon; a continuation of the fight, by other means, regarding agency pricing, begun in 2010. With regard to that aspect, I know people wonder whose side I’m on, not with just this but in a wider “publishers vs. retailers” sense. I think this is a fundamentally silly question, because we’re not watching a football game here. People who view this somehow as a binary “us against them” argument likely have a view of the publishing world that is most politely described as “charming.”
Look: I have work at Macmillan (my Tor books) and at Penguin (my Rough Guide books), and at HarperCollins (an anthology I contributed to). I also have several works at Audible and Brilliance Audio, which are owned by Amazon (Amazon has also recently launched several publishing imprints, becoming a “traditional” publisher itself). Concurrently, a disproportionately large percentage of my sales (relative to authors in general) come through eBooks, and Amazon sells the majority of those, and sells a fair number of my print work, too. I also sell a very healthy number of books, electronic and otherwise, through Barnes & Noble and independent bookstores, who have their own set of concerns about both Amazon and publishers. On top of this many of my publishers, large and small, also have direct retail sales channels complementing their sales through retail. My work sells through all of those channels.
I have obvious professional and economic interests with everyone above. From my point of view, who are the publishers of my books (and the books of others) and who are the retailers is already jumbled, in a way that’s not necessarily obvious to outside observers. No matter who “wins” a particular argument up there at the level of the corporate and governmental titans, there’s going to be fallout for me as a working writer. There’s also going to be fallout for readers and customers, since however you classify a corporate entity, as a publisher or a retailer, their corporate bottom line does not always (or sometimes even often) coincide with your own interests.
The question of whose side I am on is simple and obvious, to me at least: I’m on my side. My side wants my work available to readers in a way that that is affordable and easy to get in whatever format they prefer while at the same time allowing me to make a living doing what I do. In a larger sense, I’m also on the side of other writers, so that the end result of all this punching back and forth is not that authors are obliged to take contractual or retail positions that are detrimental to their interests, either as businesspeople or rights holders. Basically, my side doesn’t want anyone else to screw up what I see is the actual goal of all of this as a working writer, namely, connecting my words to readers, and their cash to me.
So my side is watching all of this with interest, as it does with every publishing event that has an impact on how it does business. If any of you thought the life of the writer was just sitting in a quiet room spinning stories, I say unto you: Ha. You crack me up.