GEEKALEGAL: Post Settlement & More

It has been a crazy couple of weeks here in the Geekalegal world. There has been much written, blogged, and tweeted about the settlement of 3 of the major publishers in the DOJ anti-trust investigation. What does this mean? Who does it effect? What about the authors? What else is going on?

There remain 3 defendants in the DOJ action including Apple. Whether or not they will continue to attempt settlement or it is time for more investigation and an actual lawsuit is a big question. By the time I publish this blog there could be an answer, things move either very fast or very slow in these types of cases.

But keep in mind, there are also states that are suing. In fact, my place of residence, Texas was the first to begin investigating the parties, and first to file against them. I would imagine there are discussions about settlement going on at least with the parties that already settled with the US Government. Let us not forget also the European Commission's investigation.

As for what it means to authors, that depends on one's contractual terms, how royalties are determined, and e-book provisions. Does this mean less money for authors if the e-book prices go down? One way of looking at this is that the DOJ alleges that these publishers and Apple, in participating in the price-fixing scheme that is alleged here, wanted to 'squash the competition- in this case Amazon- like a bug' (phrase borrowed from another anti-trust suit, and heard later on the Sopranos!) The anti-trust laws are geared to protecting competition in a market place, better prices for the consumer. Was not Amazon providing competition by having lower prices? Was doing a back door deal with Apple really the best way to approach what is essentially a complete change in business paradigm? If they really were destroying e-mails to hide their activities, as alleged, one wonders at the reasons behind such actions. Most assume it was primarily to protect the publishing businesses, not necessarily the authors.

Are authors really being screwed by the competitive pricing, or is there a different paradigm that might work. I'm not going to comment on which side to choose, mainly because I don't think there is a side anymore. E-books, the idea of reading a book digitally is a huge business. I've heard experts anticipate the decline and demise of printed books as a major medium in anywhere from 5-10 years (not just about the reading experience, but also for environmental reasons). Schools are moving to e-texts, (ironically using Apple iPads) raising new generations with totally different reading experiences and learning.

E-readers themselves will evolve, and eventually we will see different distribution methods for books in technology we haven't yet imagined. But given the history of technological advances, the print publishing industry has changed. Should not the contracts, the pricing, the royalties for authors change along with it? The value of the traditional publishing process isn't lessened after all, but if there is a pricing difference, then should it be reflected? Will the authors suffer if readers move towards e-books that are not as pricey?

It is interesting to note how the business of publishing is following in the footsteps of the recording industry. The music industry resisted new technology. While it was fighting duplication technologies and going after even users, Apple perfected iTunes and there went the eventual demise of brick & mortar stores selling CDs. Was the money spent on litigation and lobbying really worth the effort given that we can get a song for very little on iTunes?

I know these were a lot of questions, much more than answers. One thing I will say. If authors don't begin to take charge of this issue, they could find themselves dealing with royalties that are dictated to maintain a past business structure rather than being paid a fair percentage of what is owed them.

It seems that the real issue is making money. The businesses that have succeeded in technological change are the ones who recognize the inevitable, and change to accommodate their business. Those that fail to account for the world that is dictated by technology, and not by them, are doomed to repeat the mistakes of other industries. These anti-trust investigation and suits is a good example.

These are just my thoughts as we watch the anti-trust lawsuits develop. I love this world, and hate the growing pains that are resulting in possible illegal activities. So much money and effort that could be going into a new business model. One thing is clear, competition as a right is being vigorously maintained by the governments, state, federal and foreign, and the technology is here to stay.

On a good note, I saw that McMillan is removing the DRM from its e-books. DRM is the mechanism used to prevent copying of a digital program. The theory behind this is that ultimately this will make the consumer happy, and keep buying e-books from them, rather than abandon the publisher for more accommodating e-book platforms. This is an awesome development and kudos!