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CFA's Cooper: Trial of Apple/Publishers Might Be Beneficial

The Consumer Federation of American Wednesday said it almost hoped Apple and the two publishers that did not settle with Justice over allegations of e-book price fixing hold out for a trial to send a signal about content companies and their fear of "digital disintermediation."

That is the idea that digital delivery will connect producers with consumers while cutting out intermediaries. For example, Amazon's move to deal directly with authors for e-book publishing that cuts out brick and mortar, or paper and ink -- middlemen," something DOJ cited as one of the spurs to move by publishers to team with Apple.

CFA earlier this week asked the Senate to investigate the arrangement between Apple and the publishers, saying it was anticompetitive price fixing. "The complaint and lawsuit filed today by the Department of Justice confirms our worst fears," said CFA director of research Mark Cooper.

Cooper said the reasons the spotlight of a trial might be useful were that Justice would almost certainly win, that it would help demonstrate why digital disintermediation is pro-consumer, an argument that CFA has made for remaking video delivery models online, and because it will illustrate the importance of antitrust laws in insuring competition in the new digital economy.