Originally Posted by nagromme
Im glad Im not an author! There must be some middle ground between conspiracies to inflate prices and selling at a loss to drive competitors out of the market.
In traditional trade book deals, authors are paid royalties based upon the list price of the book, so it makes no difference to them what the books sell for. E-books can be treated either as a trade book, as a specially negotiated deal or as a subright. If a subright, the authors actually get more: they tend to get about 40%-50% of net revenue (as opposed to about 12% of cover price on a hardcover).
Amazon could be accused of predatory pricing when they sell below their wholesale cost. I'm surprised no one has done it yet.
Frankly, I don't see why the FTC has a problem with the Agency Model. Even the most-favored-nation clause shouldn't be a problem: independent bookstores sued the major publishers many years ago because they were giving the big chains bigger discounts than they were giving the independents. The publishers lost that lawsuit and the courts ruled that everyone had to get the same discount for the same size book order. That essentially is most-favored-nation.
Also, an agreement by multiple publishers to use the agency model is not price fixing. Only if they had decided together that all ebooks were going to be $19.95 (for example) would they have violated the law. And they didn't do that.
I don't understand what the FTC is trying to do here. The publishing industry, even though there has been consolidation over the years, is still an industry with tens of thousands of publishers and that doesn't even count all the people who self-publish. There are many other industries, including the phone industry, where there are just a few players. Why don't they go after those?