Books-A-Million has joined the growing number of parties objecting to the Department of Justice’s agreement with Simon & Schuster, Hachette and HarperCollins to settle the department’s e-book price fixing lawsuit. BAM’s letter, signed by president and CEO Terry Finley, strikes especially hard at the provisions in the settlement that would impose restrictions on how the publishers can do business with all third parties (including BAM) that were not involved in the lawsuit. Specifically, Finley argued that placing limits on the use of the agency model “will harm Books-A-Million by forcing it to terminate existing vertical distribution, or agency, agreements with [S&S, HC, Hachette] and by restricting its freedom to enter into such agreements post-settlement.”
BAM said while it supports actions that would prevent the publishers from engaging in “horizontal collusion,” the settlement “reaches over and above these remedies” by imposing vertical restrictions. The unnecessary restrictions placed on BAM and other retailers, Finley wrote, “will only impair the ability of consumers to reap the competitive market benefits that resulted from the introduction of the agency model.”
It was the adoption of the agency model that improved competition among publishers with respect to e-book and hardcover prices, Finley wrote, resulting in a reduction in prices in both formats. If the restrictions on the agency model are upheld, it will “provide Amazon the opportunity to revert to its anti-competitive e-book pricing strategy which will place additional pressure on brick-and-mortar stores, Finley argued. With all the segments in book industry, and in particular brick-and-mortar stores, engaged in a struggle that will determine the future of the industry, the implementation of vertical restrictions that would “restrict the business freedom” of third party retailers is not in the best interest of the public. To the contrary, Finley wrote, “they will cause significant harm to consumers by reducing competition in the book industry.”
