“American antitrust is basically a failure.”
That’s a quote from a law professor in a recent New York Times article written by Shira Ovide titled “When Tech Antitrust Failed,” which addresses the question: How did an antitrust case meant to lower prices instead possibly lead to higher prices?
The backstory goes like this: Publishers howled when Amazon priced all books at $9.99, regardless of what the publishers wanted or needed to charge. So, they struck a deal with Apple which allowed the publishers to set prices. Then, Apple blocked discounts by all resellers, including Amazon. Next, Apple and Amazon agreed with publishers to let them set and enforce book prices, according to the article. The result being, of course, prices higher than $10.
Ovide spoke with Christopher L. Sagers, a law professor at Cleveland State University who wrote a book about the e-books litigation. He told her, she wrote, “he believes it’s a failure of corporate antitrust laws.” Read the story.
In other e-book news, the Wall Street Journal has reported that the Connecticut Attorney General is investigating Amazon’s e-book business for alleged anticompetitive conduct.