John Paczkowski

Recent Posts by John Paczkowski

Apple E-Books Ruling Won’t Do Much for Consumers

steve_jobs_ibooksA federal judge’s ruling that Apple conspired with publishers to raise the prices of e-books may have broad implications for the publishing industry and for Internet companies providing media content over the Web, but it will have little immediate impact on consumers.

Since the five publishers accused of conspiring with Apple already settled with the Department of Justice, agreeing to lift restrictions they had imposed on price discounting and other promotions by e-book retailers, U.S. District Judge Denise Cote’s decision won’t accomplish much for the folks who actually buy and read e-books.

“One of the reasons this case is interesting is that the mere fact that the government brought the complaint immediately improved life for consumers,” Stanford law school professor Mark Lemley told AllThingsD. “E-book prices dropped by a third literally overnight, as Amazon was free to lower its prices. So I wouldn’t expect to see a dramatic effect on consumer prices as a result of this ruling — we’ve already gotten the benefit of antitrust enforcement.”

In other words, the DOJ’s victory today over Apple is largely a symbolic one. Its antitrust pursuit of Hachette Book Group, HarperCollins, Holtzbrinck, Penguin Group and Simon & Schuster already ensured competition in the industry. If there truly was harm done to the market, it has largely been undone. And if there are other players mulling moves similar to those that landed Apple and the publishers in hot water, they’ve likely been deterred. Otherwise, as Forrester analyst James McQuivey observes, the e-books business will pretty much remain as it is.

“Amazon is still the dominant player, and Apple is still picking up crumbs leftover by the big bookseller,” McQuivey told AllThingsD. “Punishing Apple won’t accomplish much for consumers, even though it offers a symbol of government intervention on behalf of the little guy at a time when the government hasn’t done much else lately.”

What the ruling may do — should it survive Apple’s appeal (more on that later) — is force the further evolution of the e-book business which, according to Lemley, is in desperate need of a serious rethinking. After all, in a digital world, books are no longer as expensive to produce and distribute.

“It makes no sense to price a book that is essentially costless to produce and distribute the same as one you have to manufacture, put on a truck, and sell in stores,” said Lemley. “It also makes no sense that publishers, not authors, capture most of the revenue from ebooks, when they do very little of the work. I understand why publishers are reluctant to give up their old business model, but if they want to survive in the digital world, it’s time to make some changes.”


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work