"Publishers then turned around and imposed that agency deal on Amazon, which is the subject of the DOJ investigation. The end result: There really is more competition in the e-book world, but prices are higher than they likely would be if Amazon and others were able to discount as they saw fit."
How can something be anti-competitive if it increased competition? Whether prices went up or down is irrelevant. The whole point of anti-trust law is to make sure that the market has competition. Not to make sure that prices are low.
It seems to me that the real issue is that nobody has figured out the right way to deal with digital goods where supply is effectively unconstrained. We have constructed laws to create artificial scarcity of digital goods. If the government wants to lower the price of digital goods, what they should do is find a way to relax the regulations that artificially constrain the supply.
> How can something be anti-competitive if it increased competition? Whether prices went up or down is irrelevant. The whole point of anti-trust law is to make sure that the market has competition. Not to make sure that prices are low.
You're conflating all of the different markets here. There is the publisher and retailer and the retailer and the consumer. The latter now no longer exists, as the publisher chooses the price for both markets.
That the ereader market, a third market in this equation, is now more competitive (which is a debatable subject) isn't relevant, as you can't use anti-competitive measures in one market to increase competition in another.
It is also worth considering Apple's stake in this. Just because they were launching the iPad didn't mean they had to sell ebooks. There were already plenty of ebook vendors and readers on the iPhone, after all.
One effect of the agency model is to make end users care less about which retailer they buy a book from (because the price is the same). A device manufacturer might be interested in encouraging that. For instance, they also might be interested in selling ebooks that only work on their devices to create additional lock-in for the future. An alternative spin would be that they might not want to be hostage to a powerful ebook vendor in the future (the way platform owners often depend on the developers of their key apps).
In any case, Apple's stake was and is altering and, arguably, restricting competition in markets related to ebooks. That's something else the DoJ should be interested in.
Something about what you have written doesn't sit right with me.
If Macmillan decided not to use the iBookStore and sell their ebooks on their own to the customer (the reader of the book), and all the other publishers saw that and thought, "Hey, that's a good idea", that would lead to the destruction of what you have called the publisher-retailer market.
Is it anti-competitive to choose not to participate in a market? It doesn't seem that way to me.
If I produce a product, am I not free to choose (or create) a market to sell this product? And can I not withdraw from that market whenever I see fit?
You can withdraw from the market, of course. It's not anti-competitive to destroy a market by rendering it redundant. But that's not what is happening here.
You quoted from his post:
"Publishers then turned around and imposed that agency deal on Amazon, which is the subject of the DOJ investigation. The end result: There really is more competition in the e-book world, but prices are higher than they likely would be if Amazon and others were able to discount as they saw fit."
How can something be anti-competitive if it increased competition? Whether prices went up or down is irrelevant. The whole point of anti-trust law is to make sure that the market has competition. Not to make sure that prices are low.
It seems to me that the real issue is that nobody has figured out the right way to deal with digital goods where supply is effectively unconstrained. We have constructed laws to create artificial scarcity of digital goods. If the government wants to lower the price of digital goods, what they should do is find a way to relax the regulations that artificially constrain the supply.