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Authors Guild Files Brief Affirming Benefits of Competitive E-book Economy

NEW YORK, December 2, 2015 The Authors Guild, the nation’s largest and oldest society of professional writers, discussed the benefits of competitive e-book pricing in a friend-of-the-court brief filed today with the Supreme Court of the United States.

The brief, filed jointly by the Authors Guild, Authors United, the American Booksellers Association, and Barnes & Noble, bolsters ongoing advocacy efforts by the Authors Guild and Authors United and asks the Supreme Court to review a decision by the Second Circuit Court of Appeals in U.S. v. Apple, which found that Apple violated antitrust law by coordinating with major U.S. book publishers to influence the price of e-books. In the brief, the author and book industry groups argued that the government’s focus on Apple’s allegedly anti-competitive activities was misplaced, because Apple’s conduct, in fact, enhanced competition by increasing e-book output, the number of e-book titles, and the number of e-book distributors, which led to technological improvements in the e-book market and enhanced freedom of expression and access to e-books.

In U.S. v. Apple, the Department of Justice brought a lawsuit maintaining that the publishers and Apple—by striking a coordinated deal to establish agency pricing for e-books—exhibited anticompetitive conduct by conspiring to fix prices. The publishers and Apple, on the other hand, maintained that Apple’s entry into the market actually increased competition, as demonstrated by the fall of Amazon’s market share from 90% in 2010 to around 60% two years later. After a 20-day trial in summer 2013, the trial court found that Apple colluded with the publishers to drive the price of e-books above the $9.99 favored by Amazon. The Second Circuit upheld that decision.

Today’s filing continues the Authors Guild’s efforts to ensure that the nation’s book markets aren’t controlled by a single dominant player. The Guild, which has been dedicated to empowering authors since 1912, previously has joined others—notably the grassroots authors group Authors United—in calling for the U.S. Department of Justice to apply anti-trust scrutiny to Amazon over past anticompetitive behaviour in the e-book marketplace.

“We are pleased to lend our support in this matter, critical to anyone interested in a competitive and diverse literary marketplace,” said Mary Rasenberger, Executive Director of the Authors Guild in New York. “We fundamentally question the wisdom of the Second Circuit’s use of antitrust law to punish a business arrangement that demonstrably increased competition in the e-book marketplace.” She added, “Freedom and diversity of expression inevitably wither in a book market heavily controlled by a single player.”

In the brief submitted today, the groups sought to highlight the procompetitive impact of Apple’s conduct and the damaging effect on e-book publishing as well as the future of authorship that occurs when e-book distribution is in the hands of a single company. Attorneys with Kirkland & Ellis in New York and Washington, D.C. filed the amicus brief. “Absent correction,” they wrote in the brief, “the lower court’s wooden approach threatens to undermine the very objective of antitrust law—to ensure robust competition.”

“We authors feel strongly that diversity, competition, and the free flow of ideas are key to a healthy marketplace of books,” said Douglas Preston, founder of Authors United. “The numbers unequivocally show that Apple’s entry into the e-book market increased competition and gave authors and publishers greater choice in how content was delivered to the reading public.”

“Booksellers firmly believe in the importance of competition, a robust and diverse environment for authors and readers, and a healthy marketplace of ideas. We believe Apple’s participation in the e-books market strengthened all those goals, and the American Booksellers Association is pleased to join with our friends and colleagues at the Authors Guild, Authors United, and Barnes & Noble to support this matter,” said Oren J. Teicher, CEO of the American Booksellers Association.

The brief also cites the well-documented 2014 dispute between Amazon and publisher Hachette regarding e-book pricing as particularly instructive of Amazon’s continued danger to an open publishing marketplace. When contract negotiations reached a standstill, Amazon removed pre-order buttons from the point of purchase page for Hachette’s book titles, creating a “disastrous” effect for authors about to publish books.

In concluding their brief, the groups support Apple’s request for Supreme Court review by noting that, “Increased competition among authors to write e-books, publishers to price them, and retailers to sell them has been good for readers and good for American democracy, which is rooted in broad access to culture and a vibrant marketplace of ideas.”

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