Business models

Followup: Used Digital Marketplace 1, Publishers 0

Tom Kabinet, the controversial online marketplace for used ebooks, has won the first (albeit small) battle in what promises to be a long war regarding the resale of digital files. Tom Kabinet received its first legal notice from the Dutch Trade Publishers Association just 8 days after the site went live; now, only one month after launch, the site faces a major lawsuit in the Netherlands.

The Dutch Trade Publishers Association contends that Tom Kabinet’s proposed business model – a 10% commission for Tom Kabinet on ebooks sold in its marketplace, and a 5% royalty to authors – is illegal, pure and simple. The judge ruling on the first stage of the lawsuit, however, does not seem as convinced: it was announced earlier this week that Tom Kabinet could stay open for business throughout the course of the lawsuit. Apparently, the question of whether reselling ebooks is illegal is not as cut and dry to the judge as it is to the publishers.

Despite this week’s victory, Tom Kabinet faces a long, hard road ahead. The lawsuit will have to be won in both local and EU courts – many of which have a history of supporting trade groups when it comes to piracy – and could take several years. Perhaps Tom Kabinet will end up changing their business model, like used digital music marketplace ReDigi did after it lost a lawsuit to Capital Records in 2013; or perhaps this small victory will set the tone for the proceedings to come, resulting in a major upset in the digital publishing market.

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