ABA and B&N Seek to File Joint Amicus Brief in DOJ Suit Regarding Agency Model

On July 31, the American Booksellers Association and Barnes & Noble filed a motion petitioning the U.S. District Court for the Southern District of New York to allow them to submit an amicus brief in regard to the Department of Justice's' (DOJ) proposed consent decree affecting publishers' pricing of e-books and the agency model.

In the joint filing, ABA and Barnes & Noble argue that elimination of the agency model for e-books will injure innocent third parties, including ABA member bookstores, Barnes & Noble, authors, and non-defendant publishers; hurt competition in an emerging industry; and ultimately harm consumers. "The end loser of this unnecessary and burdensome regulatory approach will be the American public, who will experience higher overall average e-book and hardback prices and less choice," the filing said.

Under the Department of Justice's proposed consent decree, which would affect the publishers Hachette, HarperCollins, and Simon & Schuster, the publishers would be forced to terminate their current agency agreements with ABA bookstore members and Barnes & Noble. The decree would restrict the publishers from entering similar agency agreements for two years.

The filing today noted that of the 868 public comments received by the Department of Justice on this matter, more than 90 percent opposed the proposed consent decree.

"Giving customers the widest choices at the fairest prices is at the heart of the agency model, and we believe this model should remain intact," said Eugene DeFelice, General Counsel of Barnes & Noble. "We want to help the Court fully understand the significant consequences of any action that would erode such a pro-competition, pro-consumer model, and that is the purpose of our filing."

Oren Teicher, chief executive officer of the ABA, said, "Today's joint action makes clear that bricks-and-mortar bookstores are united in their belief that the Department of Justice is proposing misguided and harmful interference into the completely legal activities of Barnes & Noble and ABA member bookstores. Instituting the agency model for the sale of e-books has resulted in greater consumer choice, increased competition among publishers, and lower prices across the board for e-books. Instead of recognizing these benefits, the Department of Justice appears intent on imposing a flawed regulatory scheme that would threaten to restore undue market power to a single seller, and there has never been an example where a monopoly is good for either consumers or an industry."

In an e-mail to ABA member bookstores sent today, Teicher wrote, "I know that for some this joint action with B&N may seem an unlikely cooperation. However, we believe that in this matter it is important that bricks-and-mortar bookstores speak in one voice in order to make the strongest case possible against a consent decree that would unfairly hurt bricks-and-mortar retailers, greatly limit consumers' options, facilitate below-cost pricing, and, ultimately, very likely lead to a monopoly."

Since the ABA and Barnes & Noble are not parties in the Department of Justice case with the publishers, their joint motion today seeks permission to file a so-called amicus brief as "friends of the court" with significant interest in the case. If the court approves their request, their amicus brief will be filed no later than August 15, 2012.

A link to the legal filing is available here.