The process moves on. Publishers Weekly reports that the Department of Justice filed a motion (PDF, 19 pages) on Friday officially requesting Judge Denise Cote to approve the proposed settlement between the DoJ and Hachette, Simon & Schuster, and HarperCollins. The settlement won’t kick in right after that happens, but it will be an important milestone on the road.
It’s also unclear yet whether the settlement will be approved; remember that the judge in the controversial Google Books case decided that the Authors Guild’s proposed settlement was too one-sided and rejected it. I don’t recall seeing much in the way of opinions from the judge one way or another as to the validity of the settlement—but the settlement’s detractors have claimed it is based on a “fairly creative interpretation of anti-trust law”. If the judge sides with the opponents and rejects the settlement, will this throw a wrench in the DoJ’s plans?
As mentioned before, the agreement requires the publishers to cease their agency pricing arrangements with Apple within seven days of its approval and any other retailer within 30 days. They also can’t enter into any “Most Favored Nation” contracts, which allow the retailers to match lower prices from competitors.They have to discuss any new contract arrangements with the DoJ, and can’t retaliate against any retailers for discounting pricing on their books.
The settling publishers can’t share privileged information about business plans and strategies with each other, and are limited to specific information such as current cover prices or matters concerning rights or IP issues.
The settlement notes that publishers can pay retailers (including e-book retailers) extra for promotional services—so they could choose to pay bookstores extra for plugging e-books for them, for instance. And they could enter into agency agreements (where the revenue is 30%/70% split, for instance) as long as the agreements don’t prohibit the retailer from running sales—though the retailer can’t discount by more than the amount of its own total commission on all of that publisher’s books. (Which kind of makes the whole purpose of the agency scheme in the first place a moot point.)
The publishers will have to designate a member of their legal staff an anti-trust compliance officer, who must undergo four hours of training per year to make clear what’s expected under the settlement.
Will Judge Cote approve the settlement? Or will she send it back to the drawing board? Whatever happens, it promises to be interesting finding out.