The leaves may be falling all around us but anti-trust suits seem to be blooming. Perhaps it’s because of the economic environment with more companies looking to consolidate and protect their profit platforms. Computer technology has changed the way companies do business. Of course, for last twenty plus years, cyber market and digital content have become an increasing chunk of the profit pie—especially with digital technology. There has been a lot of modernization in the publishing field as a result.
I've been watching, with interest, the whole debacle over e-book price fixing. The publishing giants were slow to move on this new technology, but less narrow-minded entrepreneurs saw the possibilities almost from the inception and set about developing and adapting the technology for their own profit. That’s not to say the giants didn't move toward it, they did, but more as an afterthought than with the focus of utilizing it proficiently for future profits.
Reactive versus proactive.
The problem with reactive is you’re already behind by the time you realize what’s going on. You’re playing catch up while those who watch the trends in technology were already reaping the profits of their hard work and long vision. If you’re accustomed to being a leader of the pack, your short sighted decisions have left you with bits of fur and stringy meat on left over bones and envious of those who have the juicy fat haunch of the profits to feast on. You’re used to being in the alpha position and to carry the analogy further, you resort to cunning to get the choice bits. Chancy decision because the new alphas might not be as experienced in this particular hunting ground but they didn't get the position by being stupid. They’re lean and mean and intend to keep their juicy bits. Being reactive can get you hamstrung or dead.
It looks like Hachette, Harper Collins, and Simon & Schuster have settled an antitrust lawsuit about e-book prices. A U.S. court approved the settlement on Sept. 6, which has allowed Amazon to start discounting some of those companies' titles. Amazon has already sent out letters of notification of funds for a credit, pending court approval of the settlement in February 2013. The Attorney General estimates a credit of between 30¢ to $1.32 on eligible e-books purchased between April 2010 and May 2012—unless you are a Minnesota resident. The Attorney General of Minnesota chose not to participate in the settlements.
That's a lot of dollars, ladies and gents.
I'm curious what Apple will be offering here in the United States. The last I heard, Apple and Macmillan refused to talk settlement with the Justice Department, opting for their day in court. Penguin is still trying to sit on the sidelines while polishing the dents and mud off their halos and look innocent of any wrongdoing. The trial is scheduled to begin in New York Federal court June 2013. So, they have offered to settle with the European Union but are gearing up to fight a court battle here in the United States. A lot can happen in eight months, including a similar settlement, now that the precedent has been set in Europe.
Apple and Macmillan have formally have offered to settle with the European Union. The offer under consideration, according to the European Union, for the four publishers--CBS Corp's Simon & Schuster, News Corp unit Harper Collins French group Lagardere SCA's Hachette Livre, and Verlagsgruppe Georg von Holtzbrinck, which owns Macmillan in Germany, is as follows:
"For a period of two years, the four publishers will not restrict, limit or impede e-book retailers' ability to set, alter or reduce retail prices for e-books and/or to offer discounts or promotions."
They also will suspend, for five years, contracts that effectively barred publishers from selling e-books at prices lower than Apple's. A side note to this—the discounts allowed by Macmillan is only for European retailers and not for the US vendors.
Some grievous wounds indeed in the battle for the proprietorial alpha positions.
The anti-trust suits have caused others to cast a speculative look around for a target. There are several contenders out there. Google is one of them. So far, nothing has come of it, but you can bet Google isn't being shortsighted but taking a real close look at eliminating any vulnerability in their proprietorial alpha position.