“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.]
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