ABA Thanks Booksellers for Rising to the Challenge

Dear ABA Member Bookseller,

Once again indie booksellers have risen to the challenge.

As you know, the provisions of the Tunney Act gave us a unique opportunity to comment directly to the Department of Justice (DOJ) regarding both the proposed consent decree in the federal case regarding publishers’ pricing of e-books and the importance of the agency model to retailers and consumers. It’s heartening to be able to report that hundreds of indie booksellers wrote to DOJ, a very impressive number.

On behalf of the ABA Board of Directors, I want to extend deep thanks to everyone who submitted a public comment. In doing so, you have joined many colleagues in the industry — including publishers, authors, and agents — and you have helped ensure that DOJ hears the full story regarding 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.

Understanding the importance of this issue, we joined you in submitting comments to DOJ. In a June 14 letter to DOJ, I wrote, “We believe that elimination of the agency model will radically change the current e-book distribution system, will significantly discourage new entry, and will lead to the departure from the market of a sizeable number of the independent bookstores that are currently selling e-books.”

Strongly underscoring our support for the agency model and its positive effects for readers and book buyers, our letter noted, “The agency model is pro-competitive and enhances consumer choice. It is a perfectly legitimate mode of business. Indeed, it is a completely appropriate response to aggressive pricing strategies that include the sales of e-books below the cost at which those books were acquired from publishers.” (The full text of the ABA letter is available here in PDF format.)

Right now, it’s unclear when DOJ will publish the comments and submit a written summary of the comments to the federal court. As you recall, the proposed settlement with the three publishers that are involved in the consent decree (Hachette, HarperCollins, and Simon & Schuster) must be approved by the court. However, before that can happen, the court must review the comments and then determine whether the remedy being proposed is “in the public interest.”

We are calling on DOJ to publish the comments and the summary well ahead of the July 27 deadline. To do so is in the best interests of all parties, and, we believe, is in keeping with the spirit and intent of the Tunney Act.

While there is no predicting how Judge Cote will rule, we certainly hope that this outpouring of letters will help provide a broader understanding of the ramifications of this case on our industry.

That DOJ has proposed a remedy that limits choice, selection, and value for consumers turns logic on its head. And it’s important to note that no court can cite any instance in American history where monopolization has benefited consumers. We’re hopeful that Judge Cote will keep that in mind as the case proceeds.

With the close of the public comment period, the Department of Justice has until July 27 to respond to the court. Additional briefing is expected throughout August, with oral argument anticipated in the fall.

Simultaneously with the proceedings on the proposed settlement, the judge has also set the schedule for the case with the non-settling publishers — Macmillan and Penguin — and Apple.

In that case, the judge has set a trial date of June 3, 2013, with a number of key dates coming before that. Notably, all parties must contact the court by July 20 regarding the scheduling of settlement discussions, to begin no later than this fall. All discovery in the case must be conducted and completed by March 22, 2013. The final pre-trial conference will take place on May 24, 2013.

At least for some time, these two matters will proceed concurrently. ABA will monitor developments closely, to help ensure that booksellers’ interests are represented. I encourage you to watch Bookselling This Week for updates.

You, the member bookstores, have told us repeatedly that strong advocacy on your behalf is one of ABA’s most important activities. We recognize how critical this issue is, and on behalf of the ABA Board I want to assure you that we will continue to work as hard as we can to help make your voices heard regarding the proposed consent decree and the importance of the agency model.

Again, many thanks for taking the time to make your opinions heard by the Department of Justice. Your active engagement is playing a very important role.

Warm regards.

Sincerely,

Oren Teicher, CEO
American Booksellers Association