DOJ Unmoved by Public Comments

On Monday, July 23, the Department of Justice posted the 868 public comments received during the comment period for the proposed consent decree with three of the five publishers involved in its civil suit regarding the agency model. Also posted on the DOJ website was the government’s response to the public comments.

Of note, according to DOJ’s response, only approximately 70 of the comments “favored the suit and settlement.” Of the more than 90 percent of public comments opposing the settlement, DOJ’s response confirmed that approximately 200 came from bookstores.

Despite the level of opposition, DOJ stated that it has determined that “the proposed Final Judgment, as drafted, provides an effective and appropriate remedy for the antitrust violations alleged” and that it is “therefore in the public interest.”

In reviewing the comments received, DOJ characterized the writers’ motivation as an “interest in seeing consumers pay more for e-books, and hobbling retailers that might want to sell e-books at lower prices.” It contended that many comments in opposition “expressed a general frustration with conditions that arise not from the settlements or even” the complaint, but, rather, “from the evolving nature of the publishing industry — in which the growing popularity of e-books is placing pressure on the prevailing model that is built on physical supply chains and brick-and-mortar stores.”

Following the posting of the public comments, ABA CEO Oren Teicher said, “This has been an unprecedented outpouring of public sentiment in opposition to a proposed settlement that, in all likelihood, will create the very conditions likely to foster and strengthen an online retailer’s monopoly in e-book sales — one that the Department of Justice should be opposing. DOJ’s response is even more astounding considering that, overall, e-books prices are in fact lower following the implementation of the agency model.”

Regarding the number of booksellers and others — including consumers, authors, and agents — who wrote to oppose the proposed settlement, Teicher said, “That so many hundreds of people took the time to express such cogent and persuasive arguments as to why this settlement is bad for consumers and for an industry that creates a diverse range of titles for them is a powerful statement of reasoned opposition. We find it truly astonishing that DOJ has failed to recognize the myriad harmful effects of its proposed remedy, but we remain hopeful that the court will take steps to fashion a solution that does not punish indie booksellers and other e-book distributors who are working hard to serve consumers by maintaining diversity and vitality in the world of books.”

Teicher added, “Following the posting of all the public comments, it’s even more clear how many booksellers took concrete steps to ensure that the full case was presented in opposition to a settlement that would greatly limit consumers’ options, facilitate below-cost pricing, and very likely lead to a monopoly. We urge the court to recognize that there has never been any example in American history where monopolization has benefited consumers.”

DOJ is due to file a motion for entry of the proposed final judgment on August 3. Responses to the motion are due August 15. DOJ can then file a reply in support of their August 3 motion on August 22.