e-Books, p-Books, and the Durapolist Puzzle

Ariel Katz (University of Toronto), “e-Books, p-Books, and the Durapolist Puzzle”

In March 2016 the US Supreme Court declined to hear Apple's appeal in the e-books price fixing case. The lower courts determined that Apple had conspired with book publishers to raise the prices of digital books. The case opens a window into some fascinating aspects of the book trade, its peculiar economics, and the intersection of copyright and antitrust laws that regulate it. In particular, it appears that arrangements among publishers (with the cooperation of retailers) to maintain high retail prices—or attempts to create such arrangements—is not a novel phenomenon limited to e-books, but one that has a long and persistent pedigree, both in the United States and in Europe. This paper makes the following contributions: First, it offers a novel explanation for Resale Price Maintenance (RPM), one of the most controversial practices in antitrust law, and thus adds to the literature on RPM and other vertical restraints. Second, it explains why publishers have found it insufficient to act independently of each other, and resorted to collusive arrangements to implement RPM. Third, it considers how the move from printed books to e-books alters the economics of the book trade in profound ways, and fourth, it shows that these insights may shed light on several other contemporary copyright disputes.