Apple is standing alongside five major publishing houses at the defendant’s table for allegedly conspiring to raise e-book prices. HarperCollins, Hachette, Macmillan, Penguin, and Simon & Schuster are on the stand defending themselves against allegations that Apple aided them in pushing Amazon away from their standard $9.99 price point for newly released and bestselling Kindle books. According to the lawsuit, Apple and the other publishers were concerned that Amazon’s low prices would cut into their own profitability and would challenge the success of Apple’s iPad as a rival e-reader. With a new agency model from Apple, Amazon would not be allowed to sell e-book titles at prices lower than what the publishers listed on the iPad—prices much closer to those of actual printed books.

The class action antitrust lawsuit brings into question the inherent value of books. E-books don’t require physical manufacturing (paper, printing, binding), handling, shipping, or even shelf space―which was probably part of what prompted Amazon to set their price point so low in the first place, listing titles at frequently up to a third of what a new released hardcover would cost. But the question remains, where does the value of a book lie: in the content, or in the corporeal manifestation thereof? As e-books evolve, perhaps new interactive functionality and content—impossible to replicate in the physical copy—could someday lead to electronic editions costing more than tangible publications.

Questions of intrinsic value will likely stay in the background of the deliberations while Apple and publishers face charges of violating the Sherman Antitrust Act and several other federal laws for undercutting competitive business practices in preference to a monopolistic enterprise and conspiring to artificially raise prices. We at OBS plan to pay close attention to the lawsuit’s debates and the imminent future of e-books.

Links:
http://arstechnica.com/tech-policy/news/2011/08/class-action-suit-targets-apple-and-five-publishers-for-price-fixing.ars – Law and Disorder news, Ars Technica
http://www.bisg.org/news-5-546-press-releaseagency-model-now-accommodated-in-book-industry-standard-for-product-information.php – BISG press release, “Agency model”
http://en.wikipedia.org/wiki/Competition_law#United_States_antitrust– Competition law/United States Antitrust, Wikipedia