The U.S. Department of Justices antitrust lawsuit against Apple, Inc. and five e-book publishers has hackles raised in many corners of the business world, appearing to promise more battle-line drawing over the contours of the digital economy. The suitwhich alleges that Apple and the publishers colluded to raise e-book prices higher than Amazons $9.99 preferred price point for its Kindle platformhas drawn cheers from consumer advocates and jeers from the likes of bestselling author Scott Turow.
Three publishers have settled so far; Apple, Penguin, and Macmillan havent. CorpCounsel.com talked to three experts to get their take on what this case may mean for the long-term landscape of antitrust enforcement and the digital marketplace.
Eric Clemons, professor of operations and information management at The Wharton School, University of Pennsylvania
Whether its Amazon peddling e-books, Apple shilling music downloads via iTunes, or Google and Microsoft marketing their web-based services, Clemons thinks about this antitrust suit in terms of the increasing importance of online channels. Channelsor intermediariesare the gateways to the market, and the fewer of them there are, the more powerful each one is. Theres also very little regulation to control digital intermediaries, like iTunes or Amazons Kindle storefront.
And that dynamic impacts just about any company that wants to put its product in front of the buying public.
What this [lawsuit] basically says is, any form of colluding to protect the producers, or primary sellers, is illegal. And given how poorly we regulate intermediaries, this is a landmark event, says Clemons. Given that you arent allowed to collude to protect yourselfbecause that is traditional restraint of tradeand given that we have very limited regulations to control the intermediaries, this is going to put enormous pressure both on traditional intermediaries and on traditional producers, or primary sellers.
Vasant Dhar, co-director of the Center for Digital Economy Research, Stern School of Business, New York University
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