Much ado about Apple

Is the US Department of Justice making a fuss over nothing?

The perilous future of publishers was highlighted yet again by yesterday’s news that the US Department of Justice is suing Apple, Macmillan and Penguin for conspiring to fix the price of e-books.

The fuss centres on the move these companies have made on the agency model of selling, (where the publishers set the price of the e-book and the retailers take a 30 per cent cut); retailers, unsurprisingly, favour a model where they buy the e-book from the publisher at wholesale price and sell it for however much they want.

Such a model, it’s said, increases healthy competition between retailers which in turn leads to variety and greater customer choice. And according to papers filed in New York’s Southern District Court on Wednesday morning, the collusion of these publishing giants with the world’s most valuable firm (the lawsuit was launched the day after Apple’s worth surpassed $600bn), is a deeply unfair attempt to crush the freedom – and therefore prosperity – of e-book retailers who, after all, need to carve out a living for themselves too.

But this moral and legal outrage needs to be tempered a little. Two things to bear in mind: first, where is this diversity and healthy retail competition that the agency model – which is not illegal, incidentally – supposedly threatens? In every direction you turn, Amazon lurks, offering consumers e-books and books at prices that most other retailers – including high street giants such as Waterstone’s – cannot compete with. Indeed, an adoption of the agency model for e-books is essentially a digital return to the net book agreement, which publishers relinquished in 1997. Waterstone’s, supermarkets and Amazon must have been rubbing their hands with glee when that happened, as the three of them they went on to dominate the market, squashing smaller outlets in the process. What variety!

Second, though the agency model is legal, price fixing obviously is not. No doubt there will be a fair amount of legal hair-splitting over what exactly the publishing CEOs have been up to, but at the moment the circumstantial evidence is pretty thin on the ground.

The PDF document released by the DOJ reports that in late 2008, the Penguin Group and Macmillan CEOs, along with a few other heavyweights, had dinner together and ‘business matters’ were discussed. You’re kidding, right? They were at it again in January 2009, this time discussing the future of e-books and Amazon’s role in that future.

With their future looking increasingly treacherous, it’s no wonder publishing bosses have a lot to talk about at the moment. The agency model might be their only chance to survive in the cut throat world of e-book and book sales

Mark Nayler is a senior researcher at Spear's magazine.

Raising e-book prices: justified? Getty images.

Mark Nayler is a senior researcher at Spear's magazine.

Photo: Getty
Show Hide image

PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

0800 7318496