Amazon, Apple Face Investigation Over Price Fixing

Amazon and Apple have been going at it hard over the e-book market supremacy. Amazon has been particularly aggressive with its strategy, picking up authors left and right. Kindle is a wonderful device, but it would not be half as appealing as it is today if Amazon did not offer the lowest e-book prices through its Kindle store. Publishers such as Macmillan, Simon & Schuster, Hachette, HarperCollins, and Penguin have all struck deals with Amazon and Apple to offer these companies the lowest e-book prices possible. Apparently, that has not sitten well with Richard Blumenthal, the Connecticut attorney general running for the U.S. Senate. After all, price fixing does mean consumers won’t get the best deal possible on their e-books.

These agreements among publishers, Amazon and Apple appear to have already resulted in uniform prices for many of the most popular e-books — potentially depriving consumers of competitive prices… The e-book market is set to explode — with analysts predicting that e-readers will be among the holiday season’s biggest electronic gifts — warranting prompt review of the potential anti-consumer impacts

This practice has been going on for a while. Amazon and Apple are among the current market leaders in this business, and they have used MFN clauses to their advantage. Unfortunately, that means some of us will end up paying more than we’d have to for some of our e-books. Considering that consumers do not get to re-sell the e-books they have bought, this practice does seem to be anti-consumer.

This discussion has been going on for quite some time. There does not seem to be a right or wrong side in regards to this development. It’d be nice to see how the market turns out if the price floor for e-books is removed. Would that also affect the so-called price ceiling that Amazon and Apple have tried to put on their e-books? We’d never find out if companies keep fixing prices to drive smaller competitors out of business.