Barnes & Noble Objects To DOJ E-Books Settlement

Barnes & Noble sent a complaint to the Department of Justice on Thursday morning, saying that the department’s proposed settlement with publishers HarperCollins, Hachette and Simon & Schuster over allegedly colluding to fix e-book prices would harm both book sellers and book buyers.

Paid Content reports that Barnes & Noble’s general counsel Gene DeFelice told me, referring to Amazon, stated:

“You’re going to end up having choice control from a server farm in Washington state.”

B&N’s complaint also says:

“In essence, the proposed settlement substitutes one alleged cartel for a new cartel on the industry, albeit one run by the [DOJ].”

Reuters reports that the B&N claim comes after the DOJ sued Apple Inc in April in an antitrust lawsuit, which alleges that the five publishers collaborated with Apple to fix the prices of electronic books, in order to break Amazon’s dominance in the market. The government alleged that Apple had successfully convinced publishers to use the “agency model,” which allows publishers to set the price for e-books, and in turn allowing the techno-giant to take a 30 percent cut. They also agreed not to allow rival retailers, such as Amazon and Barnes & Noble, to discount their e-books.

The statement made by B&N explains, according to Paid Content, that:

“[The settlement] warrants an exacting review because of its potential impact on the national economy and culture, including the future of copyrighted expression and bookselling in general, not only electronic books…many millions of Americans, as well as all levels of the distribution chain for books (from authors to publishers to distributors, and especially brick-and-mortar stores), stand to be affected by this case’s resolution.”

B&N believes that the settlement would lead to “higher overall average e-book and hardback prices and less choice, both in how to obtain books and in what books are available.”

Do you think that Barnes & Noble is right to fear the settlement between the DOJ and publishers for allegedly using the “agency model” to help Apple?