Justice Department Investigating e-book Industry

[Christopher Valen]

If you missed it, the LA Times reported that the Justice Department is looking into e-book pricing practices. What do you think?

http://latimesblogs.latimes.com/technology/2011/12/justice-departme...

[Mark Young]

Interesting article, Christopher. Thanks for sharing.

I am always leery when government steps in to a situation. They always bring more baggage ... and more rules, tases and limits. I say let the market do its thing. Hopefully, readers will eventually be heard in this market place.

[Christopher Valen]

Mark,

Regarding your point about the market, it is no longer a "free market" when companies collude to keep prices artificially high on any product. And it's the government's job to make certain that doesn't happen.

[EDWARD C MORGAN]

I think ultimately, I'm just confused.

So what if the big publishers set higher prices? Authors may easily self-publish and many do sell their ebooks at 99 cents each.

I'm not trying to be daft, but I don't understand the problem.

[Christopher Valen]

I'm not a lawyer, Clay, so I'm not positive, but I believe that the Justice Department is looking into what amounts to "price fixing." Now self-published authors can certainly set their own prices. But what about the consumer who wants to purchase the latest best seller from a big six publisher? If those companies are conspiring to drive up the price of e-books, that's illegal.

[EDWARD C MORGAN]

True. I would think it would be awfully hard to prove though.

Alas, I'm not a lawyer either. Too much education for me.

[I. J. Parker]

Clay, I suspect it has something to do with agreements between Amazon and some of the big six.  Amazon pays them the price set by the publisher and then discounts the book to a more comfortable level (9.99?).  Not sure if that's still going on.  Publishers seem to be upset with low e-book prices.

[Jon Loomis]

Businesses can't legally collude with their competitors to set retail prices, which is basically what the Big Six have done.  There's really no reason an ebook should sell for more money than, say, a MM paperback.  That's what Justice is looking into.  I just wish they'd look where it counts for most people--who cares about little old publishing, which is a relatively small industry in the grand scheme of things?  Why the hell do gas prices go up by the exact same amount at every station in town at the exact same moment, if not for collusion?  How about credit card rates/fees?  And airline tickets?  Of course, the oil and gas industries, etc., have a lot more pull with government than publishing does--so bring on the Feds!