Judge Rules Apple Led Price Conspiracy, “Seizing the Moment” As Publishers Looked to Defy Amazon

U.S. District Judge Denise Cote has ruled against Apple in the Justice Department’s ebook price-fixing case, saying the tech company coordinated a scheme involving five major publishers that were looking for a way to challenge Amazon’s ebook pricing strategy. In a decision issued today, Cote said:

“The plaintiffs have shown that the publisher defendants conspired with  each other to eliminate retail price competition in order to raise e-book  prices, and that Apple played a central role in facilitating and executing that  conspiracy. Without Apple’s orchestration of this  conspiracy, it would not have succeeded as it did in the spring of 2010.”

Apple released a statement saying it plans to appeal the decision.

“Apple did not conspire to fix e-book pricing,” Apple spokesman Tom Neumayr said. “When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry. We’ve done nothing wrong.”

Cote also called for a trial on damages, noting that the conspiracy caused ebook prices to rise, resulting in some consumers paying more, buying a title other than the one they wanted or forgoing a purchase altogether.

The publishers named as defendants settled with the Justice Department long before the case went to court.

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Posted in Advocacy, E-Books, General

Whither B&N? CEO Resigns Two Weeks After Ominous Quarterly Report.

William Lynch, the architect of Barnes & Noble’s sputtering digital strategy, has stepped down as CEO, stoking speculation of an imminent split between the bookseller’s Nook and retail businesses.

In a statement announcing Lynch’s resignation, the company did not indicate any plans to name a new chief executive. Its CFO Michael P. Huseby has been appointed  CEO of NOOK Media and president of Barnes & Noble, reporting directly to Leonard Riggio, Executive Chairman of Barnes & Noble, Inc.

Riggio, who has made an offer to buy B&N’s trade retail business, said in the statement, “the Company is in the process of reviewing its current strategic plan and will provide an update when appropriate.”

Lynch’s departure follows a disastrous quarterly financial report released June 25th that showed losses from its Nook business more than doubled compared with the same period the previous year and its retail store earnings fell by nearly 24%.

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Posted in E-Books, General

Appellate Court: Class Certification Ruling in Google Books Case Puts Cart Before Horse

Class certification is premature in the Google mass books digitization case, says a federal appellate court. Fair use has to be decided first.

In the latest twist in the litigations over Google’s library-scanning project, The Second Circuit Court of Appeals yesterday vacated Judge Denny Chin’s class certification ruling* of last May in Authors Guild v. Google.  The appellate court said that resolution of the fair use issues needed to come first since it would help determine whether “the commonality of plaintiffs’ injuries, the typicality of their claims, and the predominance of common questions of law or fact” merited treating the lawsuit as a class action.

In other words, if Google’s fair use defense requires a book-by-book analysis, then this would weigh against class certification. If a fair use ruling can be made more broadly, then judicial economy is more likely to weigh on the side of class certification.

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Posted in Advocacy, Copyright, E-Books

New York Public Library’s Plan to Remove Books Draws Protests

In New York, activists, including some prominent authors, are fighting to stop a plan they say would gut the amount of research material readily available to the public.

The “Central Library Plan” calls for the sale of the Mid-Manhattan Library and the Science, Industry and Business Library. Their operations would be absorbed into Manhattan’s Fifth Avenue branch after it is renovated, a project that includes opening up seating space and desk space by removing research stacks, displacing millions of books that will be moved offsite.

The New York Times reports that about 50 people spoke at a legislative hearing on the project Thursday, including noted presidential biographer Edmund Morris, who said that because of the plan, he has decided not to leave his research archive to the library.

“An exquisite repository is now going to be turned into a populist hangout, and have its former stack space stuffed with more and more and more and more miles of computer cable,” he said in prepared remarks. “That’s O.K. for scholars whose attention span extends back no farther than the early 1980s. But those of us cognizant of what happened to civilization after the great library in Alexandria burned down can only think with trepidation of what the Central Plan is going to do to the historical memory of New York.”

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Posted in E-Books, General

Swift Action After Blogger Calls Out Plagiarism

An author caught selling a book that plagiarizes from works by romance writers Tammara Webber and Jamie McGuire is blaming a rogue ghostwriter for the copying and has removed the book from all sales outlets.

The author, Jordin Williams, tweeted: “I am officially letting all funds go. I’m sadden by this that a ghostwriter did this through guru. Thankfully I never received any money.”

Jane Litte of the Dear Author blog noticed the plagiarism and posted screen shots of Williams’ Amazingly Broken alongside strikingly similar passages from Webber and McGuire Wednesday. The book was pulled within hours of the Dear Author post, after readers complained directly to Amazon and to Williams via social media.

In a Twitter conversation posted by Jason Boog on the GalleyCat blog, Williams apologized directly to Webber and McGuire. She said she hired the writer who copied their work through the online freelancer marketplace odesk.com (she earlier thought she’d used Guru.com). Williams tweeted, ”I take the blame. Just saying how it happened. I do wish someone would give me a website to check plagiarism of ‘books’. Others don’t work.”

Posted in Copyright, E-Books, General

Authors’ Orphan Works Reply: The Libraries and Google Have No Right to “Roll the Dice with the World’s Literary Property”

Authors’ groups from Australia, Canada, Norway, Sweden, the UK and the US (including the Authors Guild and the Authors League Fund) and eleven individual authors filed their reply brief in the HathiTrust mass book digitization and orphan works case late on Friday. It’s the final brief to be filed in the appeal of Judge Harold Baer’s ruling last October that questions regarding HathiTrust’s “orphan works” program were moot and that HathiTrust’s other uses of millions of copyrighted books were protected by copyright law’s fair use doctrine.

A summary of the litigation is here. Here’s a six-sentence version for the time pressed: Several university libraries worked with Google to digitize millions of copyright-protected library books. The universities then placed these digital books in an online repository known as HathiTrust and permitted Google to keep a copy of each of the digital books it created. Although HathiTrust does not generally make those ebooks available, in the summer of 2011 it announced an “orphan works” program that would have allowed the downloading of books that the universities deemed “orphans” (books for which the authors cannot be found after diligent search). Authors and authors’ groups sued to stop the program and quickly discovered that many of the so-called orphans were readily findable. HathiTrust suspended the program, promising to restart it after further review. Last October, Judge Baer ruled as above; the plaintiffs appealed the ruling.

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Posted in Advocacy, E-Books, General

Apple Awaits Judge’s Ruling As Ebooks Roar On

U.S. District Judge Denise Cote is expected to rule on the Apple ebook price-fixing case later this summer, after hearing three weeks of  testimony that exposed the contentious and occasionally embarrassing backstory of Apple’s entry into the digital book business.

In closing statements Thursday, Justice Department attorney Mark Ryan said “Apple directed and oversaw a conspiracy to raise e-book prices and prevent low-price competition,” according to the Washington Post. Apple’s attorney Orin Snyder warned of the verdict’s potentially far-reaching repercussions “The government is taking perfectly sensible business agreements to infer sinister conduct,”  he said. “If Apple is found liable . . . that precedent will send shudders throughout the business community.”

Regardless of the judge’s ruling, ebooks are transforming the book industry. In 2009 and 2010, the time of the alleged conspiracy, ebooks’ share of the market was in the mid-single digits. In 2012, digital editions accounted for 20 percent of book sales, with growth of the format showing no signs of slowing down.

Posted in E-Books, General

Testimony Reveals B&N’s Early Agency-ish Plans, Penguin’s Anger at “Selfish” Random House

The Apple price-fixing trial concludes today, after eleven days of testimony that provided a glimpse into the behind-the-scenes maneuvering among major publishers and Apple, Amazon and Google. Yesterday, it was Barnes & Noble’s turn to have its plans and tactics for launching an ebooks business revealed in court.

Apple called Barnes & Noble’s VP of digital content Theresa Horner to the stand, Publishers Marketplace reports, to show the bookseller was considering alternatives to the wholesale model used by Amazon as early as 2009.

As Horner described it, one of those models was a revenue share “where Barnes & Noble was assigning the price to the consumer, but that instead of paying the publisher 50 percent on the digital list price, we would pay them 50 percent on the monies received from the consumer. We also had a floor so that if — and the floor was 30 percent. And if we received less than 30 percent of the digital list price from the consumer, we were guaranteeing to the publisher we would give them 30 percent of the digital list price.”

Horner also confirmed that by late 2009 B&N wanted publishers to operate exclusively on the agency model with all retailers, ensuring a level playing field.

An email brought up during Horner’s testimony shows just how heated negotiations got during this period when publishers and retailers were vying to set themselves up to profit from ebooks.

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Posted in E-Books, General

The Trial, Week Two: A Worst-Case Scenario Email; Spotlight on Apple’s Eddy Cue and Publishing House Heads. Where’s Random House?

Week two in the Apple ebook price-fixing trial wrapped up Thursday with Apple executive Eddy Cue, the man the DOJ says orchestrated the alleged conspiracy, testifying that he negotiated vigorously with publishers but had no idea what they were saying to each other, as Thomson-Reuters reports.

He said he also did not know of calls the government said publishers were making between themselves, nor did he think anyone else at Apple knew.

“If they were working together, I assume I would have had much easier time negotiating,” Cue said.

Cue was also questioned about another key aspect of the government’s case, the contention that Apple caused ebook prices to increase. Cue acknowledged that the cost of some books did go up from the $9.99 Amazon was charging after Apple opened it’s iBooks store, but he said it was publishers who pushed for higher prices.

Cue is scheduled to take the stand again when the trial resumes on Monday. Though he was considered the government’s key witness, so far the only really surprising revelation from his testimony is an idea Cue had back in early 2009, nearly a year before Apple announced the launch of its iPad.

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Posted in E-Books, General

Apple Price-Fixing Trial So Far: Amazon Blasted as a Bully, Google Grilled, A Comic Minion Moment

Week two in the Apple fix-pricing trial began Monday with HarperCollins CEO Brian Murray and Macmillan CEO John Sargent testifying that they weren’t forced by Apple to revise their terms with Amazon–as the Justice Department’s claims–but simply engaged in tough negotiations with both e-tailers to get the best possible deal.

While all five major publishers originally named in the suit have settled with the DOJ, the government’s case hinges largely on their actions in 2010, when Apple allegedly acted as “ringmaster” compelling them to adopt the agency model.

Monday’s witnesses also included a Google executive who finished testimony that began last week, when the Apple’s lawyer aggressively grilled him about his contention that publishers had told him Apple forced them to adopt a model that would result in higher prices. CNET reported:

Apple started to pick away at the Department of Justice’s claim that the tech giant conspired to inflate e-book prices by repeatedly and rapidly firing questions at a key Google witness.

The tactic paid off for lead Apple attorney Orin Snyder, who began to wear down on Thomas Turvey, director of strategic relationships for Google. Turvey appeared increasingly frazzled and frustrated as the afternoon went on.

Asked to name a publisher who told him about Apple’s demands, Turvey could not.

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Posted in Advocacy, E-Books, General