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Discussion Starter · #1 ·
From John Sargent, CEO, Macmillan, February 8, 2013:

Dear Authors, Illustrators and Agents,

Today we agreed to settle our case with the DOJ. We settled because the potential penalties became too high to risk even the possibility of an unfavorable outcome.

There are two reasons we did not settle earlier. First, the settlement called for a level of e-book discounting we believed would be harmful to the industry. We felt that if only three of the big six publishers were required to discount and we stood firm, those problems might be avoided. But when Random House agreed to be bound by the Penguin settlement, it became clear that all five of the other big six publishers would be allowing the whole agent's commission to be used as discount, and Macmillan's stand-alone selling at full agency price would have no impact on the overall marketplace. And in addition, your books and our business would have a pricing disadvantage for two years.

The second reason was simpler. I had an old fashioned belief that you should not settle if you have done no wrong. As it turns out, that is indeed old fashioned. Our company is not large enough to risk a worst case judgment. In this action the government accused five publishers and Apple of conspiring to raise prices. As each publisher settled, the remaining defendants became responsible not only for their own treble damages, but also possibly for the treble damages of the settling publishers (minus what they settled for). A few weeks ago I got an estimate of the maximum possible damage figure. I cannot share the breathtaking amount with you, but it was much more than the entire equity of our company.

I like to believe that we would win at trial. But outcomes are hard to predict with certainty, particularly in a civil case with a low burden of proof. And so we agreed to settle with no admission of guilt. As with the other settling publishers, retailers will now be able to discount Macmillan e-books for a limited time. This change will take effect quickly.

Thank you for all the support you have shown for Macmillan, and me, over this last year. And also thanks to the many booksellers and others who voiced their opinions. I'm disappointed it ended this way. But this round will shortly be over, and it is time for us to move on to the next.

All best,

John

http://us.macmillan.com/uploadedFiles/MacmillanSite/Non-Menu_Items/From%20John%20Sargent%2002-08-2013.pdf

From CNET:

"As with the other settlements, Macmillan agreed to immediately lift restrictions it had imposed on discounting and other promotions by e-book retailers. It also will be prohibited from entering into new agreements with similar restrictions until December of 2014.

"The proposed settlement agreement also will impose a strong antitrust compliance program on Macmillan, including requirements that it provide advance notification to the Justice Department of any e-book ventures it plans to undertake jointly with other publishers and regularly report to the department on any communications it has with other publishers. Also for five years, Macmillan will be forbidden from agreeing to any kind of most favored nation provision that could undermine the effectiveness of the settlement."

http://news.cnet.com/8301-1023_3-57568377-93/macmillan-reaches-e-book-pricing-settlement-with-doj/

Apple is now the only company left in the suit. The trial is scheduled for June.

B.
 

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About time too. My opinion (from a non-lawyer) is that Apple was the only one that had any chance to win in court and I wouldn't bet a lot of money that they can. And Apple has deep enough pockets that I suppose they can afford the penalty although I've seen speculation that it could be, as Sargent mentioned, very substantial.

June could be interesting I suppose, but really other than slapping Apple's wrist, it's all a done deal.

ETA: Doesn't this belong in the Café?



 

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I'm curious as to why it's not OK now for publishers to control prices, but after December of 2014 it will be OK. At least that's the way I read the info in the previous posts.

Mike
 

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Hopefully more prices will go down a bit. It has been a lot nicer to look in the kindle stores with the others being discounted already. Or at least many of them.

And why would this thread have to be in the cafe. It affects all readers that buy books in eformat.

 

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Discussion Starter · #6 ·
jmiked said:
I'm curious as to why it's not OK now for publishers to control prices, but after December of 2014 it will be OK. At least that's the way I read the info in the previous posts.

Mike
It is okay for a manufacturer to negotiate a pricing deal with a retailer, but it is not okay for a manufacturer negotiating a pricing deal with a retailer to coordinate their efforts with competing manufacturers. Instead of encouraging better prices and innovation, this tactic tends to hit consumers in the pocketbook. The DoJ argued that this was what occurred and demanded that in any settlement, the publishers would have to agree to abandon any pricing restrictions that the DoJ alleged were obtained via the alleged collusion.

Based on the terms of the agreement, after a period of close federal surveillance of their business practices, each maker will be permitted to negotiate new terms with their distributors and retailers just as any other manufacturer can. But, again, these agreements will have to be inked sans input from competing firms. Informal agreements between competing suppliers are big no-nos in the USA and EU. If you and your fellow CEOs decide to meet regularly at Manhattan restaurants, you're probably going to have a bad time.

B.
 

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jmiked said:
I'm curious as to why it's not OK now for publishers to control prices, but after December of 2014 it will be OK. At least that's the way I read the info in the previous posts.

Mike
I think it's not okay for publishers (5 of the big 6) and retailers (Apple) to collude to control prices, versus independently (and hopefully competitively, for us consumers) trying to control prices of just their products. So the 2 year period is more punishment than policy, and after that period the DoJ (or whoever oversees such things) will be keeping an eye on them, not just allowing them to do whatever they want then. Also note that it's a 5-year period before they can even consider any sort of "most favored nation" policy as they had agreed to with Apple.

JRTomlin said:
...ETA: Doesn't this belong in the Café?
We readers care about book pricing, too. :p (In any case, feel free to open a topic there if you want to discuss it purely from an author's viewpoint.)
 

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Discussion Starter · #8 ·
NogDog said:
We readers care about book pricing, too. :p (In any case, feel free to open a topic there if you want to discuss it purely from an author's viewpoint.)
This thread was originally posted in the WC. JR was referring to the move. (But, yes, your point is quite valid. This is a topic of GREAT concern to readers.)

B.
 

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So when it says it will immediately lifted, does that mean some of the prices could change in the Kindle story soon, or is there a specific date on that. I looked at a couple of MacMillan books and it still says "Price set by publisher".
Does it have to be signed off first?
 

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B. Justin Shier said:
This thread was originally posted in the WC. JR was referring to the move. (But, yes, your point is quite valid. This is a topic of GREAT concern to readers.)

B.
Ah...I see. (I seldom make forays into the W.C., so that I don't risk getting turned off from an author whose books I might otherwise enjoy. Not the authors' fault necessarily, but hearing them complaining about the business of writing tends to break my vision of the artist creating the best literature he/she can solely for its artistic merits -- even knowing that if I were an author, I'd be worried about all those same things. ;) )
 

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Atunah said:
So when it says it will immediately lifted, does that mean some of the prices could change in the Kindle story soon, or is there a specific date on that. I looked at a couple of MacMillan books and it still says "Price set by publisher".
Does it have to be signed off first?
The email Amazon sent for the other publishers:
We have good news. You are entitled to a credit for some of your past e-book purchases as a result of legal settlements between several major e-book publishers and the Attorneys General of most U.S. states and territories, including yours. You do not need to do anything to receive this credit. We will contact you when the credit is applied to your Amazon.com account if the Court approves the settlements in February 2013.

Hachette, Harper Collins, and Simon & Schuster have settled an antitrust lawsuit about e-book prices. Under the proposed settlements, the publishers will provide funds for a credit that will be applied directly to your Amazon.com account. If the Court approves the settlements, the account credit will appear automatically and can be used to purchase Kindle books or print books. While we will not know the amount of your credit until the Court approves the settlements, the Attorneys General estimate that it will range from $0.30 to $1.32 for every eligible Kindle book that you purchased between April 2010 and May 2012. Alternatively, you may request a check in the amount of your credit by following the instructions included in the formal notice of the settlements, set forth below. You can learn more about the settlements here:
www.amazon.com/help/agencyebooksettlements

In addition to the account credit, the settlements impose limitations on the publishers' ability to set e-book prices. We think these settlements are a big win for customers and look forward to lowering prices on more Kindle books in the future.
The way I understand it, sometime this month, the courts would approve the settlement and then Amazon can start processing any credit we are owed. I'm sure that at that time, they can also start adjusting e-book pricing. Now that Macmillan has settled as well, I guess the question is what is their date? Is it also Feb 2013?
 

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The discussion was moved as there is nothing limiting it to a discussion from an author's point of view; this is definitely something that readers are interested, as the responses indicate.

Betsy

Sent from Killashandra, my Fire HD8.9 4G
 

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What is the impact to the constant reader? 

Will I see a refund check from Macmillan for books I already purchased or cheaper prices on their existing and future eBooks?
 

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Discussion Starter · #17 ·
bordercollielady said:
"retailers will now be able to discount Macmillan e-books for a limited time" - So - does this mean the prices start dropping but then will go back up again? I don't get it.
Whether ebook prices rise or fall is up to you, and by you, I mean the readers. You will decide what each ebook is worth every time you spend your dollars. If you find that certain books are too expensive, and in turn you do not buy them, publishers will be forced to lower their prices or risk losing readers to other publishers.

What these five large publishers (plus Apple) allegedly did was deprive you of this right. They moved their prices in concert, rather than competing for your purchase. What the DoJ is demanding is that each one of the companies hit the "reset button" and return to their respective corners. After a bit of a time out, they're going to be allowed to compete again and also set their own (wholesale) prices. But when they do so next time, they have to do so with the worry that the other large publishers will undercut them. The market will decide the rest. And by the market, I mean you. :)

B.
 

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B. Justin Shier said:
Whether ebook prices rise or fall is up to you, and by you, I mean the readers. You will decide what each ebook is worth every time you spend your dollars.
I wish we really had that much influence. I think some readers are sensitive to price and will only buy the lowest priced books, but for others, there are certain authors they really enjoy and they will pay whatever they must to read them - even tho they would prefer a lower price. I also don't foresee prices falling due to competition from other publishers since one's favorite "authors" are tied to specific publishers. I won't "move" to publisher XYZ if my favorite author works for publisher ABC..
 

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Discussion Starter · #19 ·
bordercollielady said:
I wish we really had that much influence. I think some readers are sensitive to price and will only buy the lowest priced books, but for others, there are certain authors they really enjoy and they will pay whatever they must to read them - even tho they would prefer a lower price. I also don't foresee prices falling due to competition from other publishers since one's favorite "authors" are tied to specific publishers. I won't "move" to publisher XYZ if my favorite author works for publisher ABC..
And that too is the market at work.

B.
 

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bordercollielady said:
I wish we really had that much influence. I think some readers are sensitive to price and will only buy the lowest priced books, but for others, there are certain authors they really enjoy and they will pay whatever they must to read them
That is true. But once the hardcore fans have all bought the book at the higher price the sales will decrease and the publisher will have to eventually lower the price if they want the less loyal fans to also purchase the book.
 
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