Tech Daily Dose

The Authors Guild is objecting to a proposed settlement between the Justice Department and three publishers over charges of price fixing in the electronic book trade, saying the deal gives Amazon the ability to "reshape the literary market" through excessive discounting, according to a filing dated Monday.

In their filing, the Authors Guild complains of "Amazon's monopolistic reach" in the bookselling market, and charges that the online retailer is relying on a set of unfair tactics to ensure that publishers comply with Amazon's pricing policies.

The case stems from an antitrust suit that targeted Apple and five publishers - the three that settled the case, along with Penguin and Macmillan. The publishers, who were allegedly unhappy with Amazon's practice of pricing e-books at $9.95, began colluding in 2009 to set their own prices for e-books instead of making them available on a wholesale basis, according to the suit. Under the terms of proposed settlement, Hachette, HarperCollins and Simon & Schuster won't be able to make deals with booksellers that include pricing constraints.

Paul Aiken, executive director of the Authors Guild wrote that the settlement is "flawed by an astonishing provision" that requires publishers to permit Amazon and other e-book vendors to sell books below cost, provided that "vendors don't lose money over the publisher's entire list of e-books over the course of a year." The ability of publishers to set retail prices, the Authors Guild maintains, helped reduce Amazon's market share of the e-book market from 90 percent in 2009 to the current 60 percent.

The Justice Department is still pursuing its case against Apple, Penguin and Macmillan.