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Agency eBook Pricing Will be Alive and Well in Canada Until at Least May 2015

7377803204_082e31e953_z[1]The major US trade publishers may have relinquished control of their ebook prices here in the US and in Europe but Canada, well, that is a different story.

A comment left on my earlier post (thanks, Anne!) about the Canadian ebook market has revealed that, thanks to an appeal filed by Kobo, said market could be stuck in a pricing limbo well into next year.

As you might recall, earlier this year 4 Canadian publishers ( Hachette, HarperCollins, Macmillan, and Simon & Schuster) announced that they had worked out a settlement with the Canadian Competition Bureau to settle an investigation into what they might have done to bring about agency ebook pricing in Canada.

That settlement was similar in concept to the settlement that some of the publishers reached with EU authorities, and it is had details in common with the settlement in the US between the DOJ and 5 publishers. I won’t go into the details here because I want to skip to the important part.

About a month after the Canadian settlement was announced, Kobo filed an appeal. They argued that having to compete with Amazon would kill their business, and they were awarded a temporary stay to give them a chance to argue their case.

All this happened 6 months ago, and i don’t know about you but I had not heard a peep about this story. So when new details crossed my desk I was eager to report on the news.

Alas, there isn’t anything new that is worth reporting. The only new development is that the Canadian Competition Tribunal has released a ruling which detailed exactly how one should interpret a particular section of the Canadian Competition Act. That ruling was so arcane that I had to contact the  Canadian Competition Bureau to ask what it meant and find out what was going on.

I’m still not sure what the ruling means, but I was told that Kobo’s appeal, the one which could vary or stay the consent agreement signed by the 4 publishers,  is still unresolved. It’s not scheduled to go to court until 15 May 2015.

Yes, May 15th, 2015 (5 months and 11 days before Marty McFly shows up in a flying DeLorean). And even that date is not set in stone; I’m told it has been suspended and that a new date will have to be set.

In short, Kobo has managed to stall the end of Agency pricing in Canada for at least a year.

Meanwhile, I’m told the Canadian Competition Bureau is still investigating the publishers to see if they violated the Competition Act in bringing Agency ebook pricing to Canada. That investigation was exactly what the publishers wanted to avoid, and it’s why they settled earlier this year. I don’t think they’re happy about it continuing or what it might find, do you?

image  by Free Grunge Textures

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Darryl September 24, 2014 um 3:26 am

Agency is alive and well in Australia. Our ACCC declined to investigate.

Michael W. Perry September 24, 2014 um 10:43 am

Why is Canada different? Canada, you lucky people, doesn’t have Obama. The only reason the current administration’s DOJ has gone after agency pricing for ebooks is that Amazon is one of its favored businesses.

The essence of Chicago machine politics is pay-to-play. Pay the proper politicians and you’ll not only face no troubles from government (i.e. for dominating a market), its agencies will happily go after your competitors. That’s Chicago and that’s Obama and his AG, Eric Holder. They’re both Chicago politicians. Heck, that’s so obvious, you’d think even the NY Times could figure it out.

Evils like that are often exposed by their inconsistencies. At the same time that agency pricing is allegedly evil for ebooks, it’s being used across the industry, including by Amazon, to sell apps, movies, and music.

It is also exposed by events. The Seattle law firm that supposedly put the DOJ on Apple and the major publishers is quite literally located in Seattle’s South Lake Union only a few blocks from Amazon’s global headquarters.

Suspicious? Of course it is. If we had a Republican in the White House, every network would have sent a reporter to walk breathlessly and excitedly out of the law firm’s front office, across Dexter, and as close as Amazon security would let them get to Jeff Bezos’s office. It wouldn’t be a long walk. And all too many people would see that as an illustrate of the press exposing political corruption. They’d be wrong.

The key difference lies in the freedom that agency pricing gives me as an author. I can force Amazon not to sell my ebooks below cost in an all too obvious effort to destroy my competitors and leave me with only one significant ebook retailer whose demands I will have to obey. That I have sense enough to oppose, although that good sense seems lacking in many authors.

And if what I fear happens, an Amazon whose ebook royalties are already among the worst in retailing, will pay even less.

What does Amazon really want to pay authors? Leaks that came out yesterday claim that its crowd-source publishing scheme will pay authors 50% of retail for ebooks. That’s 50% of retail for an author who has apparently signed a contract giving Amazon a five-year exclusive.

You can imagine what authors who dare to publish elsewhere will get. Perhaps it will be 40%, but it’s more likely to be the 35% that Amazon currently pays for ebooks priced outside $2.99-9.99.

For the record, Apple pays 70% at all retail prices and B&N pays 65% over a wider price range that Amazon. Long term, I wouldn’t be surprised if an Amazon success meant that most authors will only make half as much per sale as they now make.

And yet Amazon still has fanboys among authors. That’s what amazes me.

I might add that, as an author, I have no problem with the major publishers raising the prices of their books through the roof. That’ll only make mine sell better. A competitive market doesn’t need government agencies deciding what prices are acceptable and which are not. The ebook market is easily one of the most competitive in history. The barriers to entry are virtually nil.

If the governments of the U.S. and Canada really want to go after price-fixing and related evils, they should turn their attention the the legal profession. If one lawyer attacks you for some alleged evil, you have no choice but to hire another lawyer to defend yourself (a conspiracy of sorts), a lawyer that will bill you hundreds of dollars per hour (or partial hour).

And needless to say, lawyers practice agency pricing. They set the price and we have to pay in amounts vastly higher than the cost of a recent bestselling novel.

kurt September 24, 2014 um 11:07 am

quite enjoyed that – adequate in the face of no "morning coffee" today
loved the "it’s Obama’s fault" – that never fails to amuse
a signatory are you?

Anne September 24, 2014 um 3:55 pm

And yet Amazon still has fanboys among authors
Michael has his books available for sale on Amazon. That’s what amazes me.

Anne September 24, 2014 um 3:59 pm

Pretend there is a strike through on the words "Amazon still has fanboys among authors" in the above comment. I forgot the html limitations.

Nate Hoffelder September 24, 2014 um 4:12 pm

Fixed it.

Looking at the code, I think you need to use a del tag. or at least that is what inserted on my behalf.

Ryan July 5, 2015 um 1:45 pm

Has there been any update on this?

Nate Hoffelder July 5, 2015 um 1:55 pm

I have not heard anything new, but I will go ask.

Heh. Do you know what’s funny? In the 9 months since I wrote this post, Agency pricing has come back in to vogue in the US, while Kobo is still fighting to prevent the end of agency in Canada.

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[…] Arguing that it can't compete with Amazon, Kobo won a court order which blocked the consent decree between the CB and the 4 publishers. That consent decree is still blocked at this time, and it is expected to remain blocked for the indefinite future. […]

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[…] Thanks, Ryan! […]

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