Barnes & Noble Says Government’s Proposed Settlement Would Hurt E-Book Buyers

Barnes & Noble isn’t down with what the Justice Department is selling in regards to a proposed settlement in the e-book price fixing lawsuit involving several book publishers. B&N says if the settlement goes through it will hurt not only the company, but consumers as well.

In a letter to the Justice Department today, the country’s largest bookstore said the settlement would cause consumers to eventually “experience higher overall average e-book and hardback prices and less choice, both in how to obtain books and in what books are available,” reports the Wall Street Journal.

B&N thinks the Justice Department is rejecting “its traditional role of ending alleged collusion” as it seeks to become “a regulator of a nascent technology industry that it little understands.” That, we believe, is like saying, “Hey, government, you’re just old and don’t understand the kids these days.

The Justice Department alleged in its antitrust lawsuit earlier this year that five major publishers worked with Apple to switch to an agency model, which would allow retailers to set the prices of digital books. Those retailers would then receive 30% of each sale for acting as the agent. That model would replace the wholesale scheme, where retailers set prices and then pay publishers a set amount.

In the wholesale model, Amazon was able to heavily discount e-books when it introduced its Kindle e-reader, which is why the Justice Department claims the publishers got together in the first place — they wanted to bring down Amazon a notch.

Despite previously denying that it and the publishers were trying to compete with Amazon and make consumers pay more, in its letter, B&N points out that since agency pricing took hold, Amazon’s share of the e-book market has dropped from 90% to 60%, and that it resulted in lower prices for consumers as Amazon tries to compete for sales.

Thus far, three publishers have agreed to settle with the Justice Department. Apple’s attempt to get the lawsuit dismissed resulted in a judge turning the words of the company’s former CEO, the late Steve Jobs, against it.

Barnes & Noble Objects to E-Book Settlement [Wall Street Journal]