An Open Letter to the Department of Justice

I know this is a confusing mess to many of you out there, but if you take a little time and patience to try and understand this Lawsuit against Apple and the five largest Publishers;(Simon and Schuster, Hachette, HarperCollins (Penguin and Macmillan are fighting the case in court.), you may begin to understand the potential for serious consequences against the very nature of ownership in this country. Any and all interested parties have been invited by the DOJ
to comment on this suit, effective until June 25th. I am presenting my letter to the DOJ for your consideration.
John Read
Chief Litigation III Section
Antitrust Division U.S. Department of Justice
450 5th Street, NW, Suite 4000
Washington, DC 20530

John Read:

The Department of Justice should reconsider going forward with the lawsuit against publishers Simon and Schuster, Hachette, HarperCollins, Penguin and Macmillan. As someone who has been a bookseller for nearly 20 years, I can point out several reasons why this suit is not only based in error, but can have serious consequences for the very nature of property ownership in this country.

1. The charges confuse collusion with a way of doing business that has been in place for more than 20 years. In the 1990s, when I became a bookseller, the publishers set terms at 40 to 46 percent based on the amount of books purchased. The independent booksellers countered against this by citing violation of Robinson-Patman. To answer this, the publishers
offered 40 to 46 percent discount to all…or one could use co-op for a supporting order (i.e a credit or funds against an order a bookseller placed for an author event). During that time I worked for one of the larger chains and saw much abuse of this: massive numbers of books were being returned to the publishers. These returns placed the publishers in financial crisis. Did they collude to fix prices? No, they watched what one another did,
and eventually ended up putting a cap of $250.00 for co-op money. This same model applies for the struggle between Macmillan and Amazon over price modeling for e-books:the publishing industry is “wait-and-see”, and they waited fully twelve days to see how Macmillan would fare against Amazon. There was no collusion involved. The major publishing houses are competitors! It is not collusion, but survival that forces them to adopt similar
models.

2. If based upon the aforementioned model of business, the charges of collusion are based upon outright ownership of the goods in question. The retailer does not own the product in the case of e-books. The Department of Justice is therefore challenging the very notion of ownership. E-books are consignments. None of the parties involved ( Apple, the publishers and Amazon) own these e-books. What consequences will this judgement have
on the matters of intellectual property? Does the party who represents the creator have a right to ask fair price for goods and services offered?

3. The pricing has not caused consumer harm, therefore the Department of Justice cannot intervene, nor have consumers paid more for most e-books after the agency model was adopted. Average pricing is no higher than before agency adoption. The use of a small number of titles to cite overall increase is fallacious. To the contrary, the agency model has fostered competition among all parties involved in e-book publishing.

It is not in the interest of competitive business models to allow this suit to stand. At best, the Department of Justice might wish to act in favor of simultaneous publication of e-books and print. Anything else is dangerous to a free and vibrant economy.

Karen Tallant,
The Booksellers At Laurelwood
387 Perkins Rd. extd.
Memphis, TN 38117

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