Marsha Lederman had an interesting article in the Globe and Mail on April 18th trying to put a Canadian spin on the charges in the U.S. of collusion and price-fixing by the Big Six publishers (Harper Collins, MacMillan, Penguin, Random House, Hachette, and Simon & Schuster) with Apple. Just to be clear, there are TWO lawsuits in the U.S. — a class-action civil suit launched by “consumers” against this group for trying to raise ebook prices above Amazon’s preferred ceiling of $9.99 (targeting all six plus Apple) and a completely separate Department of Justice civil suit that targets everyone in that list except Random House. I’m not including separate state plans in that list.
Here’s an excerpt from Lederman:
A proposed class-action lawsuit filed in B.C. Supreme Court by the Vancouver firm Camp Fiorante Matthews Mogerman alleges that Apple Inc. and a number of publishers engaged in a “conspiracy” to lessen competition and “fix, maintain, increase or control the prices of e-books.” It is the most recent of at least five such suits filed recently in courts in Ontario, Quebec and B.C.
It also alleges that the defendants or their representatives communicated secretly, in person and by phone, to discuss and fix e-book prices, in the lead-up to the introduction of Apple’s iPad, which can function as an eReader, in April of 2010.In addition it alleges that the growing Canadian eBook market is highly concentrated, making it more susceptible to collusion.
“The U.S. case isn’t going to cover Canadian consumers. So it’s the same underlying facts, it’s the same consumer protection agenda, but it is for different consumers in a different country,” said lawyer Reidar Mogerman, who filed the suit in B.C. Supreme Court last week on behalf of plaintiff Denise E. McCabe, a non-practising Kamloops lawyer who has purchased a “significant” number of e-books.
See the whole article at Allegations of e-book price fixing hit Canada (link at Globe and Mail has expired).
So, you’ve seen the U.S. case, this “seems” like a simple matching by Canadian lawyers, should have same outcome, right? Not so fast. There is an underlying premise in law that one act can’t result in two actions for damages — even if Canadian consumers are not included in a U.S. judgement, a Canadian judge is going to look to see if Canadian consumers were either explicitly targeted by U.S. actions (i.e. the American individuals involved in the decision were negotiating in ways that were inherently or explicitly including the Canadian market rather than simply a knock-on effect of American actions) and/or there were additional negotiations / decisions by Canadian actors that create an additional claim of action. In other words, where’s the “Canadian content”-equivalent component of the decision-making? If there isn’t any, and to date there has been no proof offered in any court-room or media story, then the Canadian lawsuits are going to have to fight a much bigger uphill battle. Particularly as there is no “Amazon.CA” ebook store — we all buy from the U.S. site. Which means publishers could get punished “twice” for sale adjustments in one store. I’m a bit skeptical of the outcome, partly as Canada doesn’t have the same class-action lawsuit mentality of our American cousins, including less of a “reward” culture when it comes to judgements, often limiting outcomes to “actual damages” (a couple of dollars if you can prove you bought a book at a price higher than $9.99).
I do, however, find the notation that the Canadian market is more prone to collusion since it is more highly concentrated of interest. It could mean that certain companies might take a larger hit than the others, and with completely different dynamics than in the U.S.
Personally, I think the lawyers missed the boat on the filing. They should have included a NAFTA element where they could show that Canadian consumers writ large were being squeezed by the Canadian publishers as a larger pattern of behaviour. I’ll confess upfront that I have a really strong aversion to HarperCollinsCanada. They don’t price match HarperCollins (U.S.) and invariably when I find a book that is priced way higher in Canada, the publisher is HarperCollins. I’ve even reduced myself to arguing with them on their Facebook page about their prices…I don’t know why I’m even still getting their feeds as it only raises my bloodpressure.
Awhile back, I got very excited about Lawrence Block’s ebooks being available, went to get one of the Scudder series and thought, “What the ????”. It was $13. For a book that had been out for 10 years. Since I’m on his FB feed, I mentioned it to him…to which he replied, “Huh? They’re $7,99 in ebook form”. Of course, if you’re in the U.S., Harper Collins (U.S) was selling it for $7.99. But the Canadian price was $13.99 or so on Amazon. I could find it for $12 something on Kobo and I think I could find it for slightly less than that on Nook (or vica versa). But bottom-line was that Canadians would have to pay more than $11 to get the ebook, a greater than 35% markup. Oh, and just to add insult to injury, the paperback version was available for less than the U.S. Kindle version.
While I normally see this with HCC, it isn’t unique to them. There’s something wonky in the state of publishing when (a) the ebook version is more expensive than the paperback (I don’t care how many times a publisher dances on the head of the pin arguing that ebook costs are not much lower than paper production, nowhere could you ever convince me it was MORE expensive!) and (b) the price you set to sell to a consumer virtually (across the internet, from the same store, with the same process, with the same technology, and the exact same E-version original!) depends on which country they are in and, ignoring currency exchanges particularly when dollars are trading almost equally, there’s a 35% markup!
If that isn’t a pattern of behaviour that gets you slapped by a Canadian court for price-gouging and collusion, it certainly does at least colour your evidence a bit more strongly in your favour in your court filing. Ah, it will be fun to be a spectator.