Macmillan CEO: No, We Won’t settle with DoJ in E-Book Case

Macmillan CEO John Sargent sent a letter to authors and agents on Wednesday afternoon, saying that the publisher does not plan to follow Penguin’s lead and settle with the Department of Justice in the e-books lawsuit. But, Sargent said, Macmillan voluntarily entered new retailer contracts that conform with many of the requirements in the DOJ’s settlement. Macmillan is the smallest of the big-six publishers, and the only one that is wholly privately owned. Sargent says there are two reasons Macmillan is not settling: “First, it is hard to settle when you have done nothing wrong. Much as the lawyers explain to me that settling is completely standard business procedure, it still seems fundamentally flawed to me somehow.”

More importantly, he writes:
“Since the very beginning, the government’s demands have never wavered in all our discussions. They still insist on the two year discounting regime that forms the heart of the agreement signed by the three settling publishers. It was our belief that Amazon would use that entire discount for the two years. That would mean that retailers who felt they needed to match prices with Amazon would have no revenue from e-books from five of the big publishers (and possibly the sixth) for two years. Not no profit, no revenue. For two years. We felt that few retailers could survive this or would choose to survive this.”