Book industry decries loss of agency sales

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WASHINGTON, July 23 (UPI) -- Booksellers are criticizing a proposed settlement between the U.S. Justice Department and Apple and six publishers meant to end a collusive pricing agreement.

In a report detailing the public response to the proposed agreement, the Justice Department said firms like Barnes & Noble, Books-A-Million, the American Booksellers Association and the Authors Guild are unhappy because the proposal would prohibit the agency sales model the Justice Department argued raised the price of e-books for customers.

Apple and six publishers switched to the agency sales model, allowing publishers to set the price of books on the retail level and pay retailers a commission on their sales. The pact between the publishers and Apple was put in place to combat retail giant Amazon's tactic of undercutting the price of e-books -- selling them for $9.99 -- as a loss leader so it could sell more Kindle digital readers.

B&N argued "government should not regulate legal agreements that are independently negotiated by industry participants who are in the best position to determine if the agreements are in their interests."

Canceling the agreement will allow the price of e-books to fall. That may be good for customers in the short run, but bookstores, authors, literary agents and publishers will be hurt by the low prices, which will contribute to lower quality for consumers, industry comments argued.

The agency model prevented bookstores from offering discounts. Supporters of the plan, in turn, welcomed "a reduction in e-book prices for consumers and dismiss any lost benefits to industry participants as undeserved, speculative or irrelevant," the report said.