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Royalty Share CEO Bob Kohn Wants Department of Justice to Cough Up Details on Amazon’s Predatory Pricing

The Department of Justice doesn’t seem to like Royalty Share CEO and attorney Bob Kohn very much. It went out of its way not merely to respond to his comments but actually to ridicule him on page 52-3 of the response it filed (PDF) to the comments it received on its proposed settlement.

Now it seems that Kohn is returning the favor. PaidContent reports that he filed a motions today seeking to file an amicus brief (PDF) in the pricing settlement, asking that the Court demand the DoJ turn over documents (PDF) relating to its investigation of Amazon’s allegedly-predatory pricing practices, and asking the judge to hold an actual hearing on the settlement instead of just approving or denying it herself, so he could “participate in oral argument” to discuss the aforementioned DoJ response to comments.

As PaidContent notes, Kohn is filing a considerably longer brief than Barnes & Noble or Apple were allowed—he seems to see himself as a self-appointed gadfly to keep the Department of Justice honest—and it’s anyone’s guess whether Judge Cote will approve the brief. Still, Kohn makes a few interesting arguments.

He argues that the DoJ is mistaking e-books for printed books—because e-books don’t require taking a copy away from one person to give one to another, supply and demand don’t work the way they usually do, but the DoJ isn’t taking notice of this. He also notes the DoJ itself called Amazon a pricing predator in its original complaint, though it backpedaled in the response to comments. He also takes issue with the definition of predatory pricing relying on overall profitability that the DoJ trotted out in the response. And he quibbles with the DoJ’s contention that anti-trust law is about ensuring low prices—it is actually, he says, about ensuring efficient prices, which is not necessarily the same thing.

It’s unclear whether Judge Cote will go for this. To my reading of the response, the DoJ seems to be trying to leave Amazon’s behavior out of the matter as much as it can, making the case strictly about the illegal thing the publishers did rather than how much that big bully Amazon scared them into doing it. If she agrees with their reading of the scope, I wonder whether she might be inclined to find his harping on Amazon a little annoying?

Photo by geetarchurchy.

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Richard Adin August 14, 2012 um 7:46 am

It is well worth reading Kohn’s brief. I find it interesting how the DoJ, according to Kohn, has misrepresented the case.

Peter August 14, 2012 um 12:02 pm

"To my reading of the response, the DoJ seems to be trying to leave Amazon’s behavior out of the matter as much as it can,"

Except the DoJ’s proposed settlement ONLY makes sense if you assume Amazon exists.

Think about it: if you’re the DoJ and you want to lower ebook prices for the consumer.

Do you:

A) Draft a settlement with the publishers in which they agree to set a lower price, and distributors are REQUIRED to honor that price?


B) Draft a settlement with the publishers in which they are free, and likely, to raise prices, but only on the condition that distributors are also free to raise margins.

Take Amazon’s historical use of extreme loss leadership away, and you would almost certainly believe the second option would result in HIGHER prices.

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