Amazon, The DOJ, Publishers, and Readers: A Timeline

This is Part I of a timeline covering the history of ebook publishing Amazon, publishers and the DOJ. I’m still constructing this, including adding the DOJ decision against Apple and the publishers, and for Amazon. Part II covering 2012–today is here.

For some background on the case, see this post The DOJ, Apple, Five Publishers and Amazon. Note that the DOJ has its own timeline in the original court filing. The DOJ and Judge Denise Cotes do not have any understanding about the history of publishing with regard to ebooks, POD, and Amazon. Amazon is deliberately creating a monopoly and a monopsony by attempting to control ebook pricing, to the point of acquiring ebook producers, software and competitors.

My core argument is best summarized by writer Charlie Stross on

What Amazon’s ebook strategy means:

Amazon seems to be trying to simultaneously establish a wholesale monopsony and a retail monopoly in the ebook sector.

. . .

If the major publishers switch to selling ebooks without DRM, then they can enable customers to buy books from a variety of outlets and move away from the walled garden of the Kindle store.

Timeline

1990 June 16 (Bloomsday)
Bob Stein of The Voyager Company convenes a meeting to discuss the potential of ebooks.
1992 January
Voyager releases the first three Expanded Books at Macworld in San Francisco. These ebooks shipped on floppy discs initially and were designed to be read on a Mac PowerBook, using Apple’s HyperCard. The first three books were The Complete Hitch Hiker’s Guide to the Galaxy by Douglas Adams, The Complete Annotated Alice by Martin Gardner, and Jurassic Park by Michael Crichton.The Expanded Books UI and feature set (convenient and simple search methods tied to the page layout, the ability to switch between large print and normal print, various modal navigation tools including a linked TOC and a chapter menu that dropped down from the chapter heading on each “page”, a margin area on each page in which readers could write notes, bookmarks, and, of course, interactive annotations, established the basic feature set and UI of ebooks.
1998 July 29
Peanut Press founders Jeff Strobel and Mark Reichelt announce release of ebooks for the Palm PDA
2000
Steve and Scott Pendergrast found Fictionwise.com ebook retailer.
2000 February 14
NetLibrary buys Peanut Press.
2001 November 15

OCLC Online Computer
Library Center announces that it has made an offer to purchase
substantially all the assets of netLibrary and assume certain netLibrary
liabilities. netLibrary is a leading provider of eBooks, eTextbooks and
Internet-based content/collection management services.

See: OCLC Offers to Purchase netLibrary’s Assets and OCLC MAKES OFFER TO PURCHASE ASSETS OF NETLIBRARY

2005
Jeff Bezos founds Amazon. By 2012 Amazon is the world’s largest online retailer.
Franklin Electronic Publishers Inc. Sells Mobipocket.com to Amazon
The Burlington City, N.J., publisher of electronic books sold its 16,765 ordinary shares in MobiPocket.com SA to Amazon (NASDAQ: AMZN) in connection with Amazon’s purchase of all MobiPocket’s outstanding shares. The Mobi or Mobi Pocket ebook file includes .mobi and .prc. It’s based on the Open eBook standard and uses XHTML; the format included support for javascript and other features that Amazon did not carry over into the Kindle AZW file format, which is essentially a .mobi file that uses an asterisk instead of a dollar sign for serialization purposes.
2007 May 21
U.S. Supreme Court’s ruling in Bell Atlantic v. Twombly. Justice David Souter decrees that parallel conduct, absent evidence of agreement, is insufficient to sustain an anti-trust action under § 1 of the Sherman Act. Souter’s decision also heightened the pleading requirement for Federal civil cases, requiring that plaintiffs include enough facts in their complaint to make it plausible—not merely possible or conceivable—that they will be able to prove facts to support their claims. Dissenting opinion from Justice Stevens.
2007 June 28
U.S. Supreme Court’s ruling in Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007) overturns the 96-year-old doctrine that vertical price restraints were illegal per se under Section 1 of the Sherman Act, replacing the older doctrine with the rule of reason. The Rule of Reason is a doctrine developed by the United States Supreme Court in its interpretation of the Sherman Antitrust Act. The rule, stated and applied in the case of Standard Oil Co. of New Jersey v. United States, 221 U.S. 1 (1911), is that only combinations and contracts unreasonably restraining trade are subject to actions under the anti-trust laws. Possession of monopoly power is not in itself illegal.
The Rule of Reason can be therefore considered a complement to per se illegality. Under the latter, the action, without consideration for circumstances, is illegal. Under the rule of reason, the circumstances in which the action was committed must be considered.
2008 January 1

Fictionwise acquired the eReader business unit of Motricity, Inc. eReader was one of the oldest ebook sellers, originally starting under the name Peanut Press and later renamed Palm Reader when owned by Palm, Inc. By acquiring eReader, Fictionwise nearly doubled in revenue.”

2008 January 31
Amazon.com buys Audible; March into digital content distribution continues
2008 February
Mark Coker founds Smashwords as an ebook only retailer offering self-publishers converting tools to produce ebooks from word processor files, upload and sell them to readers.
2008 December
“In December 2008 Fictionwise licensed the eReader format to Lexcycle, who integrated it into their Stanza ebook reader for iPhone.”
2009 March 5
Barnes & Noble buy ebook retailer Fictionwise.
2009 April
Amazon acquires Lexcycle “Lexcycle was a software company that made electronic book reading software. They were responsible for Stanza, which runs on the iPhone, iPod Touch, Microsoft Windows and Apple Macintosh platforms. In April 2009, Lexcycle was acquired by Amazon.com.” See also: Lexcyles: One Year Under Amazon.”
2009 July 20
Barnes & Noble announce that they are the “World’s Largest eBook Bookstore” using the eReader application and file format purchased from Fictionwise.
2010 January 27
Apple announces iPad and iBooks Bookstore and iBooks app.
2010 January 29
Amazon pulls all MacMillan books from its inventory
2010 January 30
John Sargent takes out an advertisement in Publishers Lunch explaining

This past Thursday I met with Amazon in Seattle. I gave them our proposal for new terms of sale for e books under the agency model which will become effective in early March. In addition, I told them they could stay with their old terms of sale, but that this would involve extensive and deep windowing of titles. By the time I arrived back in New York late yesterday afternoon they informed me that they were taking all our books off the Kindle site, and off Amazon.

Sargent also introduced the “agency model”:

Under the agency model, we will sell the digital editions of our books to consumers through our retailers. Our retailers will act as our agents and will take a 30% commission (the standard split today for many digital media businesses). The price will be set the price for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time.

The agency model would allow Amazon to make more money selling our books, not less. We would make less money in our dealings with Amazon under the new model. Our disagreement is not about short-term profitability but rather about the long-term viability and stability of the digital book market.

2010 January 31
Amazon “capitulates” agreeing to Macmillan’s terms

We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books.

2010 March 17
EBSCO acquires NetLibrary from OCLC The Digital Shift

When EBSCO acquired NetLibrary from OCLC in March 2010, it obtained a fully formed ebook platform that already had a large collection of about 200,000 ebooks from 500 publishers available in 17,000 sites worldwide. The challenge was to smooth out this platform, now known as Ebooks on EBSCOhost, so that it could migrate to the EBSCO interface and there be remade.

2011 May 6
New York Times piece about BookishPublishers Make a Plan: A ‘One Stop’ Book Site

Simon & Schuster, Penguin Group USA and Hachette Book Group—hope the site will become a catch-all destination for readers in the way that music lovers visit Pitchfork.com for reviews and information. The AOL Huffington Post Media Group will provide advertising sales support and steer traffic to the site through its digital properties.

2011 October 26
Britain’s Office of Fair Trading allows Amazon to purchase independent online bookseller The Book Depository, despite the objections of the Publishers Association, the Booksellers Association, the Independent Publishers’ Guild, the Bookseller Group and the Society of Authors.

Tim Godfray, chief executive of the Booksellers Association, called the decision “wrong”, saying it would give Amazon “a complete stranglehold on the market”, depleting Amazon’s competitors still further and “hurtling us towards a monopoly situation”.

2011 November 10
Lexcyle’s ereader app Stanza EOL’d by Amazon
2011 December
Amazon officially notifies ebook publishers that Amazon would no longer support Mobipocketcom and no further ebook sales would be possible from the mobipocket.com domain.

Amazon, The DOJ, Publishers, and Readers Part II: 2012–present.

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