The settlement allows Amazon to keep discounting books

Barnes & Noble Inc. disagreed with the U.S. government’s e-books settlement this week, noting that it could lead to higher e-book and hardback prices and less of a choice for millions of book buyers and sellers.
The brick-and-mortar bookstore chain filed a complaint with the U.S. Justice Department Thursday in an effort to battle the government’s e-books settlement.
Barnes & Noble said the settlement would lead to “higher overall average e-book and hardback prices and less choice, both in how to obtain books and in what books are available.” Before the agency pricing model, Barnes & Noble was “losing substantial money in an effort to compete with Amazon’s pricing and was unable to gain significant market share.”
Barnes & Noble is constantly struggling to compete with the likes of Amazon simply because it cannot compete pricewise. However, the book retailer recently announced a partnership with Microsoft for "Newco" e-book subsidiary, which enhance e-book offerings via Microsoft's Windows 8 and Barnes & Noble's Nook tablet. Barnes & Noble will own about 82.4 percent of Newco while Microsoft will own 17.6 percent.
The U.S. Justice Department went head-to-head with Apple and five major book publishers over an agency pricing model that was accused of being anti-competitive. The agency pricing model allows publishers to set the price of e-books and Apple then gets to take a 30 percent cut. The deal between Apple and the book publishers also stopped the publishers from allowing other retailers to discount their e-books. This cut into other retailers like Amazon, which use a wholesale model where retailers pay for the books and charge whatever they want for them.
Amazon typically charged $9.99 for its books.
The five book publishers involved in the probe were HarperCollins Publishers Inc., Simon & Schuster Inc., Hachette Book Group, Macmillan and Penguin Group.
The proposed settlement by the U.S. government is to allow Amazon to keep discounting books while publishers terminate the part of their deal with Apple that says publishers cannot allow other retailers to discount their e-books.
Three of the above-listed publishers, including HarperCollins Publishers Inc., Simon & Schuster Inc., and Hachette Book Group, have agreed to settle. Macmillan and Penguin Group, on the other hand, have vowed to fight the settlement. Apple is also siding with Macmillan and Penguin Group.

Source: Yahoo News

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