Salman Rushdie attacks planned DOJ lawsuit against publishers

By Alison Flood

Author tweets 'the US Justice Dept wants to destroy the world of books' after price-fixing accusation is reported to be imminent

Salman Rushdie has hit out at the US Department of Justice, saying it "wants to destroy the world of books", after reports that it plans to take action against major publishers and Apple.

The department is reported to be on the verge of filing an antitrust lawsuit against Apple and the publishers Penguin, Simon & Schuster, Hachette Book Group, Macmillan and HarperCollins that alleges that they are colluding to keep the price of ebooks high.

"Seems that the US Justice Dept wants to destroy the world of books," Rushdie wrote on Twitter. "Anyone who thinks that fair pricing that allows authors to make a living is a cabal or cartel system is deep in the grip of Napsterism – the belief (fostered by Napster in the music world) that it's OK to acquire people's work for almost nothing."

At stake is the power to set prices for ebooks, with publishers defending the controversial agency model, which sees the publisher determining ebook prices instead of the retailer. Apple has backed the agency approach while Amazon has fought hard against its adoption, preferring to set prices itself and sometimes to discount ebooks ferociously. The agency model has already prompted an EU investigation into price fixing, with several publishers inspected over the commission's belief that "the companies concerned may have violated EU antitrust rules that prohibit cartels and other restrictive business practices". In America, meanwhile, a class-action lawsuit alleges that several major publishers conspired with Apple to increase ebook prices in order "to boost profits and force ebook rival Amazon to abandon its pro-consumer discount pricing".

In a letter to the members of the Authors Guild, the lawyer and bestselling author Scott Turow called the Justice Department's reported plans "grim news for everyone who cherishes a rich literary culture".

"We have no way of knowing whether publishers colluded in adopting the agency model for ebook pricing," he said. "We do know that collusion wasn't necessary: given the chance, any rational publisher would have leapt at Apple's offer and clung to it like a life raft. Amazon was using ebook discounting to destroy bookselling, making it uneconomic for physical bookstores to keep their doors open. Publishers had no real choice … it was seize the agency model or watch Amazon's discounting destroy their physical distribution chain."

Turow ended his letter by expressing the hope that the reports of the investigation were either wrong, or that the Justice Department reconsiders. "The irony bites hard: our government may be on the verge of killing real competition in order to save the appearance of competition," he wrote. "This would be tragic for all of us who value books, and the culture they support."

© Guardian News and Media 2012

[Photo credit: andersphoto / Shutterstock.com.]