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Donna Wentworth
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Ernest Miller
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Elizabeth Rader
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Jason Schultz
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Wendy Seltzer
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Aaron Swartz
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Alan Wexelblat
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About this weblog
Here we'll explore the nexus of legal rulings, Capitol Hill policy-making, technical standards development, and technological innovation that creates -- and will recreate -- the networked world as we know it. Among the topics we'll touch on: intellectual property conflicts, technical architecture and innovation, the evolution of copyright, private vs. public interests in Net policy-making, lobbying and the law, and more.

Disclaimer: the opinions expressed in this weblog are those of the authors and not of their respective institutions.

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In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

Copyfight

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April 18, 2012

Ignoring the Real Anticompetitive Behavior in the E-Book Antitrust Suit

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Posted by Alan Wexelblat

Discussion and thought continues in the wake of DOJ's suit against the e-book publishers and Apple.

In a New York Times piece, David Streitfeld notes that Amazon has already announced plans to "push down" e-book prices. Of course, the problem isn't what happens in the short term, it's what happens over the longer term. There continue to be two diametrically opposed opinions on this. On the one hand, we have the old-school notion that says monopolists will raise prices no matter what - the view argued by those who didn't settle with DOJ. I continue to find this ironic after Apple's history of holding the line on music prices against publishers who wanted to charge far more. On the other hand, we see independent authors like Konrath who argue that sales are extremely sensitive to pricing and monopolist price-jacking will just cause people to switch back to physical books.

There is already a potentially significant price gap in the (retail) costs of e-books and physical books. To the degree that a consumer has a choice - that is, already owns the e-book device - the price gap has to matter. For consumers who aren't already locked into a device, the gap has to be factored against the cost of buying a new device.

A possible third way could come from small e-booksellers, according to a Time Techland piece by Keith Wagstaff this week. Under the two very photogenic ladies from Emily Books the column points out that for all the hand-wringing over the potential power Amazon will have, nobody at the big publishers is actually doing anything about it. Hopping into bed with Apple isn't precisely a great move, but nobody at the big houses seems to have a better idea.

Emily's idea is to offer a high-touch hands-on approach, giving readers a better idea of the quality of what they're getting. It's a simple model, and one that has been replicated with all kinds of specialty brands and products in all kinds of industries. But it's nearly impossible to do with e-books because the publishers are so afraid that they won't let anyone sell their e-books without massive, complicated, and expensive DRM.

Wagstaff devotes more than half his column to excoriating the idiocy that is DRM, a story that I'm sure most Copyfight readers know by now. He ends by saying:

DRM requirements are going to have to go. It’s probably going to happen eventually; if I were a publisher, I’d get ahead of the curve and embrace a more diverse marketplace sooner rather than later.

Oh, would that the big publishers were so willing to dip even a tiny toe into the 21st century.

Which brings me back around to a piece Cory Doctorow put up on Boingboing last week titled "Antitrust and ebooks: regulators miss the big DRM lock-in picture" which itself spins off a Tim Carmody piece for WIRED.

The point these two are making is that antitrust regulators are looking at the wrong thing. Sure, agency pricing set up by collusion would be illegal, but it's not half so anti-competitive as the kinds of platform locks that DRM and other restrictions the DOJ is giving a pass to. Carmody points out that Apple also employs a variety of anti-competitive measures to lock customers in. And, as I'm getting sick of saying and you are probably getting sick of hearing, every bit of lock-in is going to end up harming the marketplace and harming readers particularly.

Yeah, I get that e-books have lots of advantages. I'd like to get some. But not at this cost - and I don't mean whatever Amazon decides to charge.

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