For those who have been paying attention, it doesn’t come as much of a shock to hear that people are unhappy about the rise in price of Kindle eBooks caused by the Agency Model pricing forced on Amazon by the largest publishing houses in the business. Apple came out with iBooks as a means of adding value to the iPad’s initial launch, and in doing so arranged things to prevent Amazon from having an advantage. They went to the publishers, worked out an industry-wide deal, and ended the era of the affordably priced eBook. Now, finally, somebody is calling them on it.
The basis for the suit is a number of early indications that Apple knew ahead of time that all of the major publishers would be turning on Amazon at the same time. A much publicized Wall Street Journal article from early 2010 had Steve Jobs clearly aware of the impending changes and certain not only of his company’s ability to price match but of the publishers’ willingness to boycott Amazon in order to change the state of the market. While Amazon did make every attempt to keep the Kindle Store free of such manipulation and price hiking, in the end each publisher is the controller of its own works and they were forced to concede defeat in order to keep the content available to Kindle readers.
The suit charges Apple and the five largest publishing companies with antitrust violations, among other things, and would seek to represent anybody who has purchased an eBook since the prices jumped over 30% practically overnight last year. If successful, the Agency Model would be completely overturned, as would the arrangements currently in place preventing price discrepancies between retailers.
There is every reason to believe that this has at least a chance of success. It is not even the first legal obstacle that publishers have faced since they turned on the Kindle. In 2010 both Amazon and Apple were brought to talks with the Attorney General of Connecticut, who had concerns that the abrupt change would lead to a situation where competition between companies would be impossible. Such anti-competitive behavior would of course be a dangerous thing to be involved in, but the companies being looked at at the time were clearly not colluding. This time, looking at Apple and the publishers, it might not pass quite so easily.
Though it will be months, at best, before there is even an indication of which way this is likely to turn out, it is possible that there will be some change in the meantime. eBooks are the only area where the publishing industry seems to be growing lately, and the Kindle platform is the driving force behind eBook sales in the US. Anything that publishers can do to improve sales will be to their advantage, and they have shown at least some small interest in the potential from reduced pricing. Will it be enough to change the face of eBook publishing without legal intervention? Time will tell. It seems inevitable that publishers will come to their senses eventually and drive their numbers up any way that works, though, and the success of the lawsuit is still just speculation.