Senator Says Department of Justice Should Drop Lawsuit Against Apple

DOJ e-books suit “can wipe out the publishing industry as we know it”

For those who don't know yet, the US Department of Justice is currently in a legal battle with Apple, Macmillan and Penguin over their e-book sales policy.

Apple's “agency model” for selling books in electronic format allows publishers to set content prices under a “most favored nations” clause.

In contrast with it is Amazon's “wholesale model”, which gives resellers the power to buy content from publishers and price e-books at or below initial cost, to encourage sales.

The US Department of Justice is against Apple's method, saying that it infringes antitrust laws. This is why Apple and its publishing partners have been taken to court.

One person dissatisfied with the move is Senator Charles Schumer (D-NY). He warned the US DOJ that the suit could “wipe out the publishing history as we know it.”

It is his opinion that Apple's stake in the e-book industry is very important, critical even, for young writers and competitive consumer pricing.

"They could allow their books to be sold at the prices Amazon set, thus undercutting their own current hardcopy sales and the future pricing expectations for digital books—or stay out of the e-books market entirely," Sen. Schumer said. "In an increasingly digital age, the latter was simply not an option."

Amazon is perceived as holding a monopoly on e-book sales. In his opinion piece, "Memo to DOJ: Drop the Apple E-Books Suit: Restoring Amazon's monopoly in digital publishing is not in the public interest," the senator says Apple did well in breaking it.

"The e-books marketplace provides a perfect example of the challenges traditional industries face in adapting to the Internet economy," Sen. Schumer writes. "Amazon took an early lead in e-book sales, capturing 90% of the retail market. Because of its large product catalog, Amazon could afford to sell e-books below cost."

The bottom line is that the DOJ "misses the forest for the trees" when it raises the argument that new-release book prices have gone up since Apple's iBookstore was launched. He states that the overall trend of average e-book prices has actually been following a downward pattern and that the justice body should not ignore it.

It will be a while before either party is proven right of course. DOJ's price-fixing suit against Apple, Macmillan and Penguin won't begin until 2013 after all.

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