With the advent of ebooks, they could play it completely straight and still be horribly exploiting naive writers. Author J.A. Konrath has a blog in which he goes on at tremendous length about the relative merits of independently publishing ebooks versus signing with a big New York publishing house--to sum up, it's generally better for a new author to skip the publishing house.
Of course, I'll freely admit to being biased against Penguin as I'm a Kindle owner and they're one of the companies that does such charming things as charge $12.99 for a Kindle edition of a book that's $7.99 in paperback. When a company does the equivalent of getting in their customers' faces screaming "fuck you, we don't want your business," I'm pretty much inclined to not want anything to do with them.
Added: Okay, to be fair to Penguin, they and the other New York publishers aren't really in the business of selling books to readers; they're in the business of selling paper to distributors. So I'm not really their customer at all.
Of course, I'll freely admit to being biased against Penguin as I'm a Kindle owner and they're one of the companies that does such charming things as charge $12.99 for a Kindle edition of a book that's $7.99 in paperback. When a company does the equivalent of getting in their customers' faces screaming "fuck you, we don't want your business," I'm pretty much inclined to not want anything to do with them.
Added: Okay, to be fair to Penguin, they and the other New York publishers aren't really in the business of selling books to readers; they're in the business of selling paper to distributors. So I'm not really their customer at all.