Apple vs. Amazon: Who’s really fixing eBook prices?

“Amazon set the price of an e-book at $9.99, a low-ball number with a tiny, if any, margin. Critics point out that Amazon overall makes little profit on a whopping $48 billion in revenue. Amazon’s goal is to offer e-books at a huge discount and seed the e-book reader market with Kindle devices, which, in turn, will create a monopoly that forces customers to buy e-books only from Amazon,” Tom Kaneshige writes for CIO. “And it was working: Amazon quickly grabbed 90 percent of the e-book market, writes CIO.com’s consumer tech blogger Bill Snyder.”

“We can thank Apple for putting the kibosh on Amazon’s evil monopolistic scheming,” Kaneshige writes. “With the iPad, book publishers had another e-book distribution option. E-books on Apple’s iBookstore rose to the range of $12.99 to $14.99 under Apple’s agency pricing model, which allows book publishers to raise the price of an e-book while Apple takes a 30 percent cut. As a result, Amazon’s market share fell to 60 percent.”

Kaneshige writes, “The DOJ’s mission is to protect consumers against monopolies and price fixing, but in this case their approach is flawed. A quick glance at Apple’s agency model, and one might jump to the conclusion that consumers faced an e-book price hike from $9.99 to $14.99…. Dig a little deeper, and you’ll find that the DOJ’s thinking doesn’t make sense. You simply cannot break Apple’s agency model and swing the pendulum back in favor of an Amazon monopoly, all in the name of protecting consumers. The DOJ can and should penalize book publishers and Apple if it finds price collusion—after all, price fixing is illegal— but not to the benefit of Amazon and its money-losing, monopoly-building enterprise.”

Read more in the full article here.

MacDailyNews Take:

The DOJ’s accusation of collusion against Apple is simply not true. The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.Apple spokesman Tom Neumayr, April 12, 2012

MacDailyNews Take: If there’s any justice left in this world, little bitch Bozos will pay for whining to the clueless DOJ.

You can send a message: If a book you want on your iPad is available in the iBookstore, buy it there, not via Amazon.

[Thanks to MacDailyNews Reader “Lynn Weiler” for the heads up.]

Related articles:
Apple: U.S. DOJ’s accusation of collusion against iBookstore is simply not true – April 12, 2012
Apple not likely to be a loser in legal fight over eBooks – April 12, 2012
16 U.S. states join DOJ’s eBook antitrust action against Apple, publishers – April 12, 2012
Australian gov’t considers suing Apple, five major publishers over eBook pricing – April 12, 2012
DOJ’s panties in a bunch over Apple and eBooks, but what about Amazon? – April 12, 2012
Antitrust experts: Apple likely to beat U.S. DOJ, win its eBook lawsuit – April 12, 2012
Why the market shrugged off the Apple antitrust suit – April 11, 2012
What’s wrong with the U.S. DOJ? – April 11, 2012
Macmillan CEO blasts U.S. DOJ; gov’t on verge of killing real competition for appearance of competition – April 11, 2012
U.S. DOJ hits Apple,major publishers with antitrust lawsuit, alleges collusion on eBook prices – April 11, 2012
U.S. DOJ may sue Apple over ebook price-fixing as early as today, sources say – April 11, 2012

28 Comments

  1. The DOJ is completely out of order. Typical clueless government. I hope sanity prevails. As much as I would love to see $9.99 books that should come from the publishers and not Amazon who’s only motives are their own greedy selfish monopolistic ends. Astounding that Eric Holder & his band of staff incompetents don’t already see this. Biff from BTTF needs to come and knock them on their collective heads multiple times. “Hello! HELLO!!!:

      1. You DARE question the Neo-Con-Job corrupted Tea Party here at MDN? You have BALLS sir!

        Getting back to Peter Blood’s point is my usual point that TechTardiness is Rampant. Our US government is outrageously tech-ignorant! That the DOJ initiated this investigation is a wonderful example. That Google blatantly lied to a Senate hearing last year and none of the Senators noticed, is another great example. Then there is the US government’s late and lame response to China’s hacking and cracking of government computers for well over a decade. Obama ordering RIM PlayBooks for his staff. Blatantly unconstitutional bills to censor and surveil the Internet. On and on ad nauseam.
        (o_0)

  2. Sure, everyone loves cheaper products, but Amazon was dumping product at a loss, and forcing publishers to play ball by their rules. Amazon was not only the 800 lb gorilla in e-book market, they were the ONLY gorilla. Amazon looks like a hero because their prices are initially lower, but they are unsustainable in the long term. It is so obvious that Amazon’s intention was to crush all potential competition by virtually buying the market. This activity is illegal too. The agency model, in and of itself, is quite legal and pretty normal: Publisher sets the product price and pays a commission to the seller. As ebook market grows and competition for buyers sets in more aggressive pricing takes place (barring real collusion to set prices). I hope Apple and the Publishers fight this tooth and nail.

  3. “MacDailyNews Take: If there’s any justice left in this world, little bitch Bozos will pay for whining to the clueless DOJ.

    You can send a message: If a book you want on your iPad is available in the iBookstore, buy it there, not via Amazon.”

    Go one step further and cancel your Amazon account and tell them why.

    1. Go another step further, and buy the hard copy at your local bookseller.

      They pay taxes and in other ways support your local community. Amazon doesn’t, and unless you live in the same city as an Apple Store, Apple doesn’t either. Plus you will be able to share or donate it when you are finished with it. And it will still be readable a few years down the road.

  4. Awhhh, these poor Americans can’t afford the extra $2.99 to pay what the publishers want for their publications. It’s about time for the government to step in and correct this travesty, that deprives these poor Americans from buying everything dirt cheap.

  5. Price dumping (selling a product at an unprofitable price so low that it puts the competition out of business (or prevents them from entering the market) is illegal in the United States.

    The DOJ knows this, that is where the word clueless comes from.

  6. I’d buy ibooks from Apple IF it had a Mac OS reader. Now some people assert that no one reads books on their Macs, only on their iPhones and iPads – but a Mac reader is needed for people that do study and writing, e.g. students researchers. You have the ebook open in one panel, and you write in another panel. I can only say that Apple’s refusal to offer a Mac OS reader for iBooks must be Steve Jobs’ bloody mindedness that his stance is the only correct stance. Seriously, how much effort would it take for Apple to create a reader for Mac. And if Apple are withholding a reader for Mac simply to force me to buy an iPad and iPhone – well, I have those already, but I’m not buying Apple’s iBooks. I now have over a few hundred Kindle books, and now I am entrenched in the Amazon system. The take home lesson is that Steve Jobs was not always right. I’m also looking forward to a 7″ iPad so I can read my Kindle books.

    1. With Apple banking on iCloud to give you access to all your music, photos, video and books on all your devices, I’m sure that an integrated reader of some sort is coming for the Mac.

  7. If this goes through, Amazon will never see cheap books again and neither will the consumer. The publishers will charge a higher rate to everyone and Amazon will have nothing to put on their Kindles. What the heck are they goof for then, maybe a coaster for your drinks.

  8. Most e-books are overpriced compared to a hardbound or paperback. The key issue here is sharing. A paperback I can give to someone else to read and I can sell it – maybe not at a high price but I can. So far, I prefer the Kindle app over the iBooks app because I can read the books (such as The Missing Manual) also on my Mac.

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