Last month, Apple found itself alongside five big-name booksellers in a civil antitrust lawsuit led by the U.S. Department of Justice. As the allegations of eBook price fixing continue to polarize the publishing community, one thing remains clear: Apple will stand and fight.
Simon & Schuster joined HarperCollins and Hachette last week to become the third publishing house to settle the charges out of court by squaring itself with 29 state attorney generals. Each was charged with colluding with Apple to essentially keep the price of their titles $3 to $5 higher in the iBookstore than the Kindle Store. In exchange for their cooperation, the mobile device manufacturer would provide them with a 30 percent commission on all sales.
On face value, this does not paint Apple in a flattering light. But the "agency model" of book pricing has existed for some time in the print world and is often appreciated for its ability to provide the publisher - not the retailer - with ultimate price control.
Apple finds fundamental flaw
As the saga continues, Apple is taking objection with the assertion that its eBook pricing strategy would do harm to the consumer. Conversely, it contests that the agency model aids market competition.
"For Apple to be subject to hindsight legal attack for a business strategy well-recognized as perfectly proper sends the wrong message to the market," company officials stated. "The government's complaint against Apple is fundamentally flawed as a matter of fact and law."
According to Reuters, Apple is arguing that its entrance in the eBook publishing space actually forced longstanding leaders Amazon and Barnes & Noble to improve the quality of their eReader technology. It has also suggested that its $12.99 and $14.99 price tags are more on par with traditional print alternatives and could mitigate the profit margin anxieties that are keeping publishers from earnestly exploring digital content production strategies.
Shifting the conversation
The backroom deals that got Apple into trouble in the first place are hard to ignore, according to PC Magazine, and still reside at the center of the case. However, peripheral issues have joined the conversation and actually shifted its focal point away from the price fixing in question.
As Apple continues to make its stand, it has shed light on the frustrations experienced by digital publishers and already promoted a number of honest, informed discussion on where the eBook publishing market should be headed.