July 22, 2012

U.S. Senator Opposes DOJ Suit Against Apple

by Alan Beatts

Charles E. Schumer, a Democratic senator from New York, wrote an opinion piece in the Wall Street Journal opposing the Department of Justice suite against Apple and several publishers.  Of note in the article is a figure that I'd missed when I wrote about the same topic.

Despite higher prices for some ebooks after Apple supported the agency model, the average price for e-books dropped from $9 to $7 during the two year period prior to the suit (the source for this figure is court document associated with the suit).

Mr. Schumer goes on to say,

"The Justice Department has ignored this overall trend and instead focused on the fact that the prices for some new releases have gone up. This misses the forest for the trees. While consumers may have a short-term interest in today's new release e-book prices, they have a more pressing long-term interest in the survival of the publishing industry.

If publishers, authors and consumers are at the mercy of a single retailer that controls 90% of the market and can set rock-bottom prices, we will all suffer. Choice is critical in any market, but that is particularly true in cultural markets like books. The prospect that a single firm would control access to books should give any reader pause"

And he closes with this observation,

"The administration needs to reassess its prosecution priorities. Justice Department officials currently have comprehensive guidelines in place to determine when they should challenge mergers, but they have no such guidelines for non-merger investigations. It's time to come up with some. These new guidelines should take a broad, pragmatic view of the market as a whole. As the e-books case shows, this kind of perspective is sorely missing today."

Good points all, I'd say.

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