Macmillan Settles Antitrust Lawsuit With DOJ – Continues to Pretend They Did Nothing Wrong

Macmillan Logo [Converted]In a move that surprised few, the CEO of Macmillan has just announced that Macmillan is accepting the anti-trust settlement which the DOJ has offered to Apple and their 5 c0-conspirators.

Jon Sargent continues to pretend that the original indictment filed by the DOJ in April 2012 doesn’t present a compelling argument that Macmillan and the other 4 publishers conspired with Apple to bring about Agency Pricing Model.

Apple is the only one that has not settled, and I fully expect then to do so in short order. If this goes to trial they will likely have counter and and all of the damning emails that can be found in the archives of the 5 publishers which have now settled.

This is an old story, and one covered in depth repeatedly, broadly, and excessively, so I’m going to leave this post with the comment that I firmly believe the conspirators should have their prize taken away as part of the punishment.

Nate Hoffelder

View posts by Nate Hoffelder
Nate Hoffelder is the founder of The Digital Reader. He has been blogging about indie authors since 2010 while learning new tech skills weekly. He fixes author sites, and shares what he learns on The Digital Reader's blog. In his spare time, he fosters dogs for A Forever Home, a local rescue group.


  1. Paul8 February, 2013

    It still seems odd to me that Amazon can sell the books at such a significant loss in order to bankrupt its competitors without the DoJ getting involved.

    1. Nate Hoffelder8 February, 2013

      The problem with your supposition is that Amazon’s actions so far are not illegal. Your supposition requires a second step that involves raising prices to an extreme degree. Amazon’s business model is based on selling stuff cheap, not “selling cheap now and raising prices later”.

      And Amazon has been pursuing this model since 1995. Don’t you think it’s a little too late to complain about it?

    2. Mike Cane8 February, 2013

      >>>at such a significant loss

      Even when that was true:

      1) The Big 6/4 could have *stopped* selling to Amazon at any damn time, refusing to renew their contracts


      2) They got their full payday *anyway* so their hypocrisy is there for *anyone* to see.

    3. fjtorres8 February, 2013

      What “significant loss”?
      The DOJ looked into those stories and found Amazon has never loss money selling ebooks. It is addressed explicitly in the rebuttal to the Cobspirators’ response to the indictments when they tried to change the subject from their Conspiracy to raise prices on consumers.
      Neither the Judge nor the DOJ would have any of that bull-loney, which is why even Sargent is settling.
      Apple would be well-advised to follow the publishers and settle –like they have in their other conspiracy cases–or risk the DOJ’s email bounty entering the public record.

      Me, I hope they fight all the way to the SCOTUS.
      The treasury could use a couple billions worth of fines. 🙂

      1. flyingtoastr8 February, 2013

        What? The DOJ never found that – in fact they’ve specifically included provisions in the new agreements with the settling publishers prohibiting Amazon for doing so again.

        Hell, in an interview with Wired a few years ago Bezos said he was ok that Amazon lost money on ebook sales. Smoking gun.

        1. fjtorres8 February, 2013

          Oh, so you missed this:

          Here, try to parse this:

          “None of the comments demonstrate that either condition for predatory pricing by Amazon existed or will likely exist. Indeed, while the comments complain that Amazon’s $9.99 price for newly-released and bestselling e-books was “predatory,” none of them attempts to show that Amazon’s e-book prices as a whole were below its marginal costs. ”

          Note: “e-book prices *as a whole*.”
          You familar with basket pricing? You sell *one* item at a loss and make money on the aggregate purchase. Perfectly legal 2oth century business practice.

          Going from annecdotal reports of Amazon selling “some” specific titles at a loss at “some specific point in time” is nowhere near the same as saying Amazon lost money on their ebook *business*. A difference that makes a big difference.

          All the DOJ did was throw the whiners a bone; all it does is ensure Amazon never does what they never did: lose money on a publisher’s entire catalog.

          1. Fbone8 February, 2013

            It was revealed (“leaked documents”) that 25% of Amazon’s ebooks were sold below cost but they recovered the losses from the other 75%.

            1. fjtorres9 February, 2013

              And for all the hand-wringing over the discounts, everybody glosses over the thousands of *free* commercial books they offer up at any given time. Both are promotional tools to grease sales.
              Or the fact that, for a company willing to live off 1-2% profit margin the Adobe Tax alone lets them make a profit at prices that are below most competitors’ costs. And that is before factoring in their savings on hosting and processing.
              Bezos is a tricky one and if his enemies want to psyche themselves over his promotional pricing tactics he’ll let them angst to their heart’s content. The more they tell consumers his prices are “too low” the more consumers he’ll sign up to the Kindle ecosystem. 🙂

            2. Fbone9 February, 2013

              Of course. it didn’t hurt that Amazon earned over $700 million in on-device advertising in 2012.

            3. fjtorres9 February, 2013

              Really? That much?
              Wow. No, it wouldn’t hurt at all.
              Must annoy the heck out of their foes…

  2. Frank Skornia8 February, 2013

    I’m kind of disappointed that this will probably mean that we won’t see the evidence the DoJ would have presented at the trial. Back when they first brought the suit, I was astonished with how specific they were with the description of the charges and the alleged wrongdoing. This made me believe that they either had a significant trove of leaked documents from the publishers, or even a whistleblower that would have been called to the witness stand. I don’t think that even this DoJ would have been so detailed with their charges if they didn’t have some major evidence to back up the accusations. Could this be a reason why the publishers have all settled, to prevent this dirty laundry from becoming public?

    1. fjtorres8 February, 2013

      Most likely.
      Once the special snowflake defense collapsed they had no way to keep the evidence from being made public short of settling.
      I wonder if a FOIA request could pry the documentation from the DOJ…

      1. Mike Cane8 February, 2013

        >>>I wonder if a FOIA request could pry the documentation from the DOJ…

        That could be fun. I wonder if they’d redact the name(s) of those who ratted them out?

        Hey, Nate! File the FOIA request.

  3. […] who _settled_ rather than try to make this argument themselves. That includes Macmillan, which settled while still claiming that they had done nothing wrong.  If Macmillan had the evidence to support Kohn’s argument […]

  4. […] That is established historical fact, and so is the antitrust suit brought by the DOJ, Macmillan settling the lawsuit,  its punishment, and Macmillan's return to agency in […]

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