American Booksellers Association And Barnes & Noble Seek Voice In Department Of Justice Case On EBook Pricing And Distribution

The American Booksellers Association (ABA) and Barnes & Noble filed a motion today to become a “friend of the court” in proceedings pending in the U.S. District Court for the Southern District of New York with respect to the settlement by three publishers of a lawsuit brought by the Department of Justice against Apple and five publishers regarding e-book pricing and distribution. Apple and two publishers have not settled the lawsuit.

In the joint filing, the ABA and Barnes & Noble argue that elimination of the current pricing and distribution method for e-books, known as the agency model, will injure innocent third parties, including ABA member bookstores, Barnes & Noble, authors, and non-defendant publishers; hurt competition in an emerging industry; and ultimately harm consumers. "The end loser of this unnecessary and burdensome regulatory approach will be the American public, who will experience higher overall average e-book and hardback prices and less choice," the filing said.

Under the Department of Justice’s proposed consent decree, which would affect the publishers Hachette, HarperCollins, and Simon & Schuster, the publishers would be forced to terminate their current agency agreements with ABA bookstore members and Barnes & Noble. The decree would restrict the publishers from entering similar agency agreements for two years.

The filing today noted that of the 868 public comments received by the Department of Justice on this matter, more than 90 percent opposed the proposed consent decree.

“Giving customers the widest choices at the fairest prices is at the heart of the agency model, and we believe this model should remain intact,” said Eugene DeFelice, General Counsel of Barnes & Noble. “We want to help the Court fully understand the significant consequences of any action that would erode such a pro-competition, pro-consumer model, and that is the purpose of our filing.”

Oren Teicher, chief executive officer of the ABA, said, "Today's joint action makes clear that bricks-and-mortar bookstores are united in their belief that the Department of Justice is proposing misguided and harmful interference into the completely legal activities of Barnes & Noble and ABA member bookstores. Instituting the agency model for the sale of e-books has resulted in greater consumer choice, increased competition among publishers, and lower prices across the board for e-books. Instead of recognizing these benefits, the Department of Justice appears intent on imposing a flawed regulatory scheme that would threaten to restore undue market power to a single seller, and there has never been an example where a monopoly is good for either consumers or an industry."

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