updated 02:10 pm EDT, Thu May 31, 2012
Publishers call federal complaint full of innuendo
Book publishers Penguin and Macmillan are denying accusations of a conspiracy with Apple to fix the price of e-books, saying the claims are based on “little circumstantial evidence.” According to the New York Times, the two companies said that the US government piled “innuendo on top of innuendo” in the federal complaint, with shots also fired at Amazon by saying the government “sides with a monopolist.”
The complaint claims that Apple and publishing houses collaborated on e-book price manipulation to limit Amazon's market control. Simon & Schuster, HarperCollins and Hachette have already settled, leaving Penguin, Macmillan and Apple to defend themselves against charges of organizing price fixing through phone conversations, e-mails, and dining at high-end restaurants in Manhattan.
Both publishers filed responses this week, with Apple doing so last week. Macmillan defended their change to the agency pricing model, claiming the wholesale model “led to Amazon's monopolization of e-book distribution.” John Sargent, Macmillan's chief executive, had “dined once or at most twice with peers from certain other publishing houses” according to the filing, with the meals being “social in nature” and not hatching a conspiracy.
Penguin saw Amazon as “predatory,” and stated that their own executives were “concerned that Amazon's below-cost pricing strategy for certain new release titles would be detrimental to the long term health of the book industry.” The subject of conspiracy over dinner was also rebuffed, with a mention of a “social dinner” by CEO John Makinson at the beginning of 2009, and that legal advice to avoid sensitive topics in terms of competitiveness was followed.
A separate class-action civil suit involving the five publishers and Apple is ongoing, including the three publishers that settled the federal complaint earlier this month.