DOJ Starts New Inquiry into Publishers' Negotiations With Amazon
I was waiting for this shoe to drop.
The WSJ reported yesterday that the US Dept of Justice is asking questions of publishers. It seems someone at the DOJ has noticed that 2 years have passed since 3 major US trade publishers settled an antitrust lawsuit over a conspiracy to fix prices, and the DOJ wanted to see if the trio weren’t back up to their old tricks.
The inquiries, made in recent weeks by letter to Lagardere SCA’s Hachette Book Group, CBS Corp.’s Simon & Schuster and News Corp’s HarperCollins Publishers, have created anxiety in the publishing industry. The inquiries reopened a sensitive and costly issue that publishers thought they had resolved, and raised the possibility of additional constraints on how they do business.
While some might see this as DOJ once again taking the role of Amazon’s pawn, I regard the DOJ’s letters as merely prudent. Only a fool would believe there’s no chance of the publishers conspiring again, and what better way to discourage that possibility than by sending a scary letter?
That letter comes shortly after the 2 year anniversary of the antitrust lawsuit filed by the DOJ and 33 state’s attorneys general against Apple and 5 publishers. Apple is of course still fighting the lawsuit in court, but all 5 publishers settled in advance of the trial.
Hachette, S&S, and HarperCollins had the good sense to settle as soon as they knew the lawsuit was coming, and that’s why they are being singled out for this letter. One of the requirements of the settlement was that the publishers had to give up any hope of retail price maintenance for a period of 2 years. That period ended in April 2014, right in the middle of the nasty Hachette-Amazon contract dispute (which actually started in November 2013).
So, does anyone think that the DOJ has evidence of a new conspiracy?
It might be unlikely but it’s not out of the question.