Where does agency pricing go from here?

The Associated Press has reported that the U. S. Justice Department and 15 states filed a lawsuit Wednesday against Apple Inc. and Holtzbrinck Publishers, doing business as Macmillan, and The Penguin Publishing Co. Ltd., doing business as Penguin Group.  The federal government reached a settlement with three of the publishers, Hachette, HarperCollins and Simon & Shuster, but Apple and the other two Big 5 publishers refused to settle.

What it most interesting about this is that, as the article states:

According to court papers, the settlement agreement reached with three publishers said the companies agreed that for two years they will not restrict, limit or impede an e-book retailer’s ability to set, alter or reduce the retail price of any electronic book. It said the retailers will be able to offer price discounts and other forms or promotions to encourage consumers to buy one or more electronic books.

The agreement also calls for the defendants not to enter into any agreement or conspiracy with any electronic-book publisher to raise, stabilize, fix, set or co-ordinate the retail price or wholesale price of any electronic book.

For these publishers, then, the agency pricing model is dead. But where does this leave indie authors who are forced to use the agency pricing model, including by the likes of Amazon who opposed it? Since these pricing contracts force us to do exactly what has now been declared illegal — fixing and coordinating the retail price across sales channels — does this mean Amazon will be forced to drop at least the price parity clause?

Stay tuned. I don’t think this is over yet.

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