This article, by Rob Waugh, originally appeared on The Mail on 4/2/12.
- Justice Department could halt price deal which prevented Amazon discounting
- Deal between Apple and five publishers
- Ebook prices risen up to 50% in last two years
Book prices on Amazon’s Kindle and other e-readers could tumble after a deal in a major price-fixing case is said to be ‘close’.
America’s Justice Department is in the closing stages of a deal with Apple and major publishers.
The deal would call a halt to a deal struck by Apple which prevented publishers selling books via Amazon and other online stores at lower prices than via Apple’s iTunes Store.
The deal has seen prices for eBooks artificially inflated so that many cost the same – or even more than – their paper counterparts.
Walter Isaacson’s biography of Steve Jobs, for example, has been priced higher than the paper edition on ebook stores.
The deal could mean that pricing control over eBooks shifts from publishers to retailers such as Amazon, which would then be able to discount and offer sale prices to its consumers.
The news came in a Reuters report quoting unnamed sources.
‘It would be a positive for Amazon because the company’s greatest strength is as a high-volume, low-price retailer and the wholesale model plays into that,’ said Jim Friedland, an analyst at Cowen & Co.
It’s unclear what sort of knock-on effect this deal would have for European consumers. The European Commission is already investigating alleged price-fixing in the eBook market.
The Justice Department is seeking to unravel agreements Apple secured from five publishers about two years ago, as the Silicon Valley company was launching its iPad and was seeking to break up Amazon’s dominance in the digital book market.
The publishers are Simon & Schuster Penguin Group, Macmillan, a unit of and HarperCollins.