In a new millennium horror story in the making – for book publishers that is, the largest bookseller in the US and Internet retailer Amazon, is set to cut e-book prices even as the US government prepares antitrust charges against the nation’s biggest publishers.
The New York Times this morning said the US Department of Justice is preparing to file charges against five major publishers and Apple for price-fixing, alleging that the five colluded with Apple in secret to develop a policy that will allow them to set their own book retail prices.
The government said that because of the alleged collusion, book prices soared starting in 2010, because the alleged agreement prevented anyone from undercutting Apple.
HarperCollins, Hachette and Simon & Schuster settled the charges yesterday, leaving the rest of the five, Penguin and Macmillan and Apple to dispute the charges.
Some of the publishers involved in the lawsuits have reportedly declared that Amazon, which used to be a customer, has now become a competitor, a horribly big one.
In its announcement following the development, Amazon said it was planning to cut the prices of e- books to $9.99 from the original $14.99, a hefty benefit for Amazon’s reader-customers.
Analysts watching the developments told the Times that as Amazon already controls about 60% of the e-book market, it might be in an eventual position to dictate its own terms as more and more readers take to its Kindle Fire e-book device, and away from traditional bookstores.
Amazon so far has very few competitors, with Barnes & Noble’s Nook e-reader capturing only a piece of the market and Apple’s iPad barely making a dent with its e-reader applications.
Source: New York Times