Two Years Is Too Long: The Two-Year Ban on the Agency Model Can Save the E-Book Industry but Ruin Bookstores

Ever since electronic books and their e-readers hit the market, there has been a near constant struggle between the e-book retailers and the publishers on who should set the price for each e-book. In 2011, when Apple decided to join the e-reader battle, the publishers changed their pricing scheme with all e-book retailers, giving the publishers most of the power. An investigation by the Department of Justice into Apple and five of the six major publishing companies led to an antitrust suit for fixing prices that most publishers have since settled out of court. This Comment argues that one specific clause in the settlement, allowing e-book retailers more freedom to pick its own prices for two years without publisher interference, will contribute to the problem the Department of Justice is attempting to prevent. While the settlement removes the price-fixing problems brought about by the publishers’ actions, this Comment explains how the two year ban on publisher interference with prices will hurt the literary industry in the long run. To do this, the Comment will show that allowing major e-book retailers an opportunity to lower their prices significantly and gain a monopoly over others not equipped to handle the low prices might lead