The Tribunal has since laid out their reasons for the delay, and for hearing Kobo’s objection, and for the most part they make sense. According to the summary written by Justice Donald J. Rennie, the chairperson of the Competition Tribunal, Kobo was granted the initial delay because without it Kobo would have been harmed even if they won their case.
Rennie notes that “In my view, the balance of convenience favours granting the stay. While maintaining the status quo might have the effect of depriving consumers of lower e-book prices in the short term, not granting the stay will certainly have a profound impact on the usefulness of Kobo’s application. In the event that Kobo is successful in its application and the Tribunal finds that the Consent Agreement ought to be rescinded or varied, Kobo would have already suffered loss and there would be no way to wind back the clock.”
But that’s not all. The summary goes on to indicate that the Tribunal might rule in Kobo’s favor. Apparently it is reasonable to listen to Kobo’s objections because there is no evidence that any collusion or anti-competitive activities occurred.
The consent agreement, which was negotiated by the Canadian Competition Bureau and 4 publishers (Hachette, Harpercollins, S&S, and Macmillan), says that the publishers don’t admit to any wrongdoing. There was also no evidence in the consent agreement to show the existence of an anti-competitive agreement or arrangement between the consenting publishers.
It was for those two reasons that the Tribunal decided that the consent agreement might not be enforceable: “Can the Tribunal make an order prohibiting a person from doing anything under a putative 90.1 agreement where it has not identified any terms of such an agreement or is not satisfied that such an agreement exists or is proposed?”
The non-legalese version is that the publishers avoided an investigation which would air their dirty laundry by giving the Canadian govt what it wanted (more competition in the ebook market). But because there was no investigation, there is also no evidence of wrongdoing, and that means that the publishers aren’t allowed to give the Canadian govt what it wants.
Tell me, does that reasoning remind anyone of a certain scene from The Princess Bride?
Snark aside, I’m not sure how Kobo is going to come out ahead here.
If the consent agreement is set aside, the 4 publishers will be investigated and evidence will probably show that they did something naughty. They will be forced to give up control of the retail prices of their books – just like under the consent agreement.
The airing of dirty laundry is exactly what the publishers were trying to avoid, so I would bet that one or more will decide to at least to try to trump the investigation by voluntarily complying with the terms of the unenforceable consent agreement – and ending Agency pricing.
It looks like Kobo’s worst fear is probably going to happen no matter what, so anything that happens after this is probably going to be moot.
image by scazon