ebooks

Andrew Hill

There were some interesting foretastes of Monday’s deal between Amazon and the big UK bookstore chain Waterstones in comments made by the latter’s managing director, James Daunt, at the FT a few weeks ago.

Mr Daunt – who had previously called the etailer a “ruthless, moneymaking devil” – spoke at a roundtable in early May to launch the Financial Times and Goldman Sachs Business Book of the Year Award. You can listen to a podcast of his initial interview in which he pointed out that all bookshops had to find ways to make the environment for book-buying attractive again. He added:

The largest of us face the additional challenge of how do we become a relevant part of this new digital world, in which, clearly, a substantial part of the reading that our customers engage in is going to take place.

  

John Gapper

Visitors try out various ebook readers at a book fair in Frankfurt. Image by Getty

Visitors try out various ebook readers at a book fair in Frankfurt. Image by Getty

So the US Department of Justice has struck, pushing three of the major book publishers into a settlement that will allow Amazon to resume discounting of electronic books, with three others left outside the settlement.

I’ve argued before against the anti-trust actions in the US and Europe to limit “agency pricing” by  publishers and hand power back to Amazon, so I won’t rehearse that here. Instead, I’ll consider briefly what the effect of the settlement is likely to be.

In short, although it is clearly good news for Amazon and bad news for the big publishers, the outcome may not be as clear-cut as the headlines suggest. 

John Gapper

Perhaps there is good news for book publishers in the talks with anti-trust authorities in the US and Europe on how electronic books are priced. Admittedly, the good news is well hidden.

On the face of it, publishers are in trouble from the threat by the US Department of Justice and the European Commission to strike down their preferred “agency model” for pricing, under which they set their retail prices for ebooks, rather than leaving it to distributors such as Amazon and Apple.

I’ve covered this saga before, and take the view that the anti-trust regulators should not facilitate Amazon’s efforts to control the ebook market with the Kindle by insisting on it being able to discount books as it wishes after obtaining them at wholesale prices from publishers.