3 Replies Latest reply on May 9, 2011 7:07 PM by bklvr896

    Agency Model = Anti-trust?

    gobasso

      Here's a question for all you lawyers out there. Does the Agency Model violate anti-trust law? As a lay person I can see that the publishers who are part of the agreement are not preventing anyone from selling books at whatever cost they see fit but aren't the publishers colluding to fix prices? I obviously don't know what the burden of proof is to show monopolistic tendencies. Please, inquiring minds want to know.

        • Re: Agency Model = Anti-trust?
          bklvr896

          gobasso wrote:

          Here's a question for all you lawyers out there. Does the Agency Model violate anti-trust law? As a lay person I can see that the publishers who are part of the agreement are not preventing anyone from selling books at whatever cost they see fit but aren't the publishers colluding to fix prices? I obviously don't know what the burden of proof is to show monopolistic tendencies. Please, inquiring minds want to know.


          Well, I'm not a lawyer and this has been discussed on these boards since the Agency Model went into effect.  You could probably search the boards and find more to read on this subject than you want to.  Also, the Agency Model's been around for over a year now, and there's no sign it is going away, in fact, after almost a year of being the only publisher to not institute the agency model, Random House moved to it on March 1.  

           

          I also know some attorney generals are looking into it, but in my layman's mind, you'd have to prove collusion on the part of the publishers in setting the prices, ie, they agreed to price all eBooks at a certain price.  Given that most HC and PB books are all retail priced the same regardless of the publisher, I'm not sure how eBooks would be any different.  I don't believe there's anything illegal at this time about retail price maintenance which is basically what agency pricing is.

            • Re: Agency Model = Anti-trust?

              I'm not a lawyer either, but I can tell you there's a big difference between the Agency Model and retail price (assume you mean list price). Yes, most books are listed at basically the same price, much like they are under the Agency Model. However, that's not the price at which the retailer purchases the book, but rather the price at which the publisher suggests the book be sold. The retailer is free to actually sell the book at any price that they want, above or below the list price, including below the actual price that the retailer pays the publisher (loss leaders). Under the Agency Model there is no retailer, but rather an agent, who may not change the price. So you can't really compare agency pricing and traditional list pricing in the same way, legally. Whether or not that means the Agency Model violates any anti-trust laws is not something I can answer as I'm not a lawyer, but it does seem as though it could. That's why there are some lawyers and attorney generals that are "looking into it". We'll have to wait and see what they find or don't find on this topic.

                • Re: Agency Model = Anti-trust?
                  bklvr896

                  sirwillard wrote:

                  I'm not a lawyer either, but I can tell you there's a big difference between the Agency Model and retail price (assume you mean list price). Yes, most books are listed at basically the same price, much like they are under the Agency Model. However, that's not the price at which the retailer purchases the book, but rather the price at which the publisher suggests the book be sold. The retailer is free to actually sell the book at any price that they want, above or below the list price, including below the actual price that the retailer pays the publisher (loss leaders). Under the Agency Model there is no retailer, but rather an agent, who may not change the price. So you can't really compare agency pricing and traditional list pricing in the same way, legally. Whether or not that means the Agency Model violates any anti-trust laws is not something I can answer as I'm not a lawyer, but it does seem as though it could. That's why there are some lawyers and attorney generals that are "looking into it". We'll have to wait and see what they find or don't find on this topic.


                  If you're referring to my post, I was referring to retail price maintenance, which is where the publisher and the retailer (B&N) agree that the publisher will set the price of the book, sometimes with a floor or ceiling (but not in this case).  

                   

                  Anti-trust laws address practices that limit or prohibit competition.  I do not believe there are any laws against retail price maintenance (agency pricing), Apple's been doing it for years.

                   

                  If agency pricing, in and of itself, isn't anti-trust, then one would wonder if you would have a case if you could prove collusion on the part of publishers to set the price.  Since only one publisher publishes a book, there's no "competition" between publishers, in that if I don't like S&S's price for a book and can go to Random House for the same book.

                   

                  The retail price on a hard cover came into my post to point out that the suggested retail price is pretty much the same from publisher to publisher, so if they all set the suggested retail price for a printed book the same, I suppose one could argue that it would be logical that the same idea would hold for eBooks.

                   

                  While the agency model is annoying at times, I am somewhat convinced that it helped B&N compete when the Nook was first released.  It stopped Amazon's pricing new releases below their cost and taking a loss on each book.  B&N would have been hard pressed to keep up with that, since they do not have the business base or capital to take a loss on books sold indefinitely.