Senator Charles Schumer (D, New York) has called for the US Department of Justice (DOJ) to drop its much-hyped lawsuit against Apple and leading publishers. Writing in the Wall Street Journal, Schumer claims that the lawsuit could wipe out the publishing industry and restore Amazon to a position of dominance.
Schumer’s central argument is that Amazon enjoyed a clear dominance of the ebook market until Apple entered and offered an alternative. The agency pricing model favoured by Apple and a number of publishers meant that there was much greater competition in pricing, according to Schumer, and he suggests that this forced Amazon and others to innovate in order to compete. He also claims that for consumers, ebook prices fell on average from around $9 to the $7 mark.
Going on to question why the lawsuit was even brought in the first place, Schumer suggests that if the DOJ proceeds with the case (as it seems determined to do), the result could be a reinforcement of Amazon’s strong position in the industry. Schumer’s intervention is a timely reminder that the DOJ’s investigation has the potential to determine the shape of the entire publishing industry for years to come.