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  (Source: baltimoresun.com)
Very few details were provided regarding the investigation in the hearing, other than that the probe would look into possible anticompetitive practices in the way of e-book sales

Earlier this week, it was discovered that the European Commission had launched an antitrust investigation to determine if international e-book publishers were taking part in anticompetitive practices, and now the U.S. Justice Department is jumping onboard the investigation as well.

The European Commission's investigation specifically targets five e-book publishers who may have been practicing anticompetitive tactics with the help of Apple and its e-book store iBooks. The five publishers in question are Hachette Livre (Lagardère Publishing France), Harper Collins (News Corp., U.S.A.), Simon & Schuster (CBS Corp., U.S.A.), Penguin (Pearson Group, United Kingdom) and Verlagsgruppe Georg von Holzbrinck (owner of inter alia Macmillan, Germany).

Now, the U.S. announced its involvement in the e-books investigation at a Judiciary Committee hearing on Wednesday.

Very few details were provided regarding the investigation in the hearing, other than that the probe would look into possible anticompetitive practices in the way of e-book sales.

Also, the U.S. is roping Amazon into its investigation as well. According to reports, Attorneys general in Connecticut and Texas are looking into whether e-book retailers like Amazon and Apple are using pricing tactics that are "harmful to consumers," mainly referring to the e-book industry's switch from a wholesale model, where retailers set the price of e-books, to an agency model, where publishers set the price of e-books.

Back when Amazon was one of the only e-book retailers in town with its Kindle, e-books were set at a price of $9.99. But since other competition, such as Apple's iBooks on its iPad, came to the table, bestselling e-book prices have risen to $14 and up.

Sources: Digital Trends, The Los Angeles Times



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RE: Gottal Love the "American" Market
By amanojaku on 12/8/2011 11:45:06 AM , Rating: 5
According to the article and sources:

1) Amazon came first and best-selling books were $10
2) Apple and others show up and best-selling books go up to $15
3) The government says "WTF? Aren't they supposed to go down?"

The market was "free" until #3, and they government is actually doing the right thing by investigating this. The publishers, working with Apple, jacked up the prices, claiming Amazon set them too low. Either they are lying, and we're all paying $15 for $10 books now, or they're telling the truth, and Amazon lowered the profits of the content owners by $5 per book.


By sigmatau on 12/8/2011 12:00:31 PM , Rating: 3
Um, no. It was free only at step 1. Amazon offered a product at a competitive price to books while no other company competed with them.

Apple joins the picture and gets many publishers to collude and connive with them to raise prices to $15. They seem to have gotten Amazon into it too. This type of product does not fit in the supply/demand BS setup we typically see. Now ebooks are the same price as printed books. That is complete BS.

I will say, that I agree that the government is doing its job.


RE: Gottal Love the "American" Market
By lightfoot on 12/8/2011 12:04:38 PM , Rating: 2
This is how I think the process unfolded.

Amazon agreed to pay publishers about $10 to sell ebooks. Amazon sold these ebooks at cost in order to move more Kindle devices.

Apple comes along and gets those same publishers to sell their books on iDevices. The difference is that Apple insists on a 30% cut. Book sellers say "Okay, but the price will need to be $15 for your customers; we still get our $10 and Apple then takes their cut."

Apple said, "No way are our customers going to pay more than anyone else - we want the lowest prices."

The publishers then went back and told Amazon that they would sell their books for NO LESS than Apple sells the same books. Amazon probably agreed to this because they were allowed to pocket the difference.


By 3DoubleD on 12/8/2011 1:30:11 PM , Rating: 2
Wow, that sounds completely logical as well as legitimate. The publishers can really set whatever price they want. It's the customers that decide whether the price is reasonable. I've certainly been disappointed by ebook pricing given the restrictions that are imposed on your purchase.

Personally, I'd like to see more authors independently selling their ebooks and prices falling around $5/book. We need to cut the greedy, unnecessary middle men out. Same goes for music.


By nyarrgh on 12/8/2011 1:32:59 PM , Rating: 2
I remember all of this some years ago. Amazon went to the length of removing books from publishers that wanted to sell it for more and trying to force them to use the "agency" model. however, they were forced to put them back at the higher prices, since they do not want to be left behind if Apple were able to offer books that are not available on the Kindle. Of course once they let a couple of publishers dictate that one, All the others wanted the same.


By nafhan on 12/8/2011 2:20:22 PM , Rating: 2
quote:
Amazon probably agreed to this because they were allowed to pocket the difference.
I would imagine that helped, but I'm fairly certain Amazon was more concerned about making sure that best sellers are not "iDevice exclusive".


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