While the Department of Justice lawsuit against the agency model rages on, the question I keep hearing, with a note of desperation, is: “What exactly are they suing about?”

I guess that’s kind of crucial to understanding the lawsuit. And while Appazoogle has written about the agency model in the past, we’ve yet to give you a play-by-play breakdown of the mechanics of this DOJ-angering monster. So here it is: the agency model, to the best of my understanding. With charts.

Book retail

Here’s how book retail normally works. The publisher makes a book. They give the book a list price—say $25. That $25 price tag is the publisher saying, “This is what the book should be worth to a final consumer.” This is important because author royalties are calculated from list price, so in order to balance a profit/loss statement (the financial end of a book proposal), they…

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