This has been a HUGE week for electronic books and the pricing war that has been going on between Amazon and Apple. The Justice Department has sued Apple and several large name publishers claiming ebook price-fixing. The publishing houses that are part of the lawsuit are CBS Corp's Simon & Schuster Inc., News Corp.'s HarperCollins Publishers Inc, Penguin, Lagardere SCA's Hachette Book Group, and Pearson and Macmillan. Hours after the filing of the lawsuit HarperCollins and Hachette decided to settle with the DOJ instead of battleing it out in a courtroom unlike the Penguin Group and Macmillian who both decided to fight the DOJ. The lawsuit was brought about after a two year probe into how Apple and the publishing houses were try to change the pricing model that Amazon brought on, where the price of nearly all ebooks would be no more than $9.99. The Department of Justice said that they believe that people have paid millions of dollars more for some of the more popular books on the market.
According to the lawsuit "Each Publisher Defendant desired higher retail e-book prices across the industry before '$9.99' became an entrenched consumer expectation. By the end of 2009, however, the Publisher Defendants had concluded that unilateral efforts to move Amazon away from its practice of offering low retail prices would not work, and they threafter conspired to raise retail e-book prices and to otherwise limit competition in the sale of e-books. To effectuate their conspiracy, the Publisher Defendants teamed up with Defendant Apple, which shared the same goal of restraining retail price competition in the sale of e-books."
The late Steve Jobs had a meeting with publishing house and said, "We'll go to [an] agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway."
That may be the way the publishing houses want it but that is a FAR cry from how the consumer wants it! I remember when it was announced that several of the big publishing houses were going to start charging upwards of $12.99 for new releases. The forms on Amazon and book sites like goodreads.com went crazy. People were outraged and a lot of them started to boycotted books that were published by those companies. In reality this is probably what helped so many of the independent authors get their books and name out.
Tom Neumayr of Apple released this statement on the lawsuit, “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.
Again remember I’m a huge Amazon Kindle supporter so this lawsuit is great in my eyes. There are so many books out there that have inflated prices because Apple with its iPad didn’t think it could win a war against Amazon and the Kindle. They finally found something that they were not #1 at and tried to attack the entity that was winning…too bad for them it didn’t work and the DOJ stopped them. I know that I along with millions of other Kindle owners, Nook readers and Google downloaders are looking forward to the lower prices on books!
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