Amazon vs. Apple: The ebook pricing saga continues

Amazon vs. Apple: The ebook pricing saga continues

The U.S. Justice Department nixes "Agency Pricing"

One of the biggest news items regarding books this week was that the U.S. Justice Department announced that it was suing Apple and five of the biggest publishers for violating antitrust laws.  If you are very knowledgeable about the world of eBooks, you know that the agency pricing model, Apple's contribution to the industry, has been pretty controversial.  It seems like the days of set eBook pricing may be ending, though.

But to explain the situation to those who didn't know anything about it, once upon a time there was a big, bad eBook seller called Amazon who decided that they were willing to sell bestselling eBooks at a loss in order to encourage sales of other eBooks and their eBook reading devices.  Another big, bad company, Apple, was initially very critical of eBooks, but once they realized that the industry was taking off without them (oh noes!), they decided they had to get a piece of the action -- but they didn't want to have to sell any eBooks at a loss, and they knew that they couldn't compete with the other major eBooks sellers otherwise.

So Apple decided to get together with the biggest and baddest publishing companies and work out a deal that would benefit everyone -- everyone except readers, that is.  They decided that in spite of our great country's free market system, publishers would start setting the prices of their eBooks, effectively making booksellers nothing more than an affiliate in the transaction.  So among themselves, Apple and the publishers decided that booksellers no longer had the right to run their businesses like, well, businesses, part of which is determining how much to mark up your prices over wholesale.

Of course, agency pricing meant that eBooks went up in price by quite a bit, usually by a few dollars and sometimes even doubling.  After years of grumbling from consumers, the Justice Department finally recognized the pact between Apple and the publishers as a conspiracy to drive up prices, and therefore a violation of antitrust laws.

The same day that the lawsuit was announced, three of the publishers -- Hachette, HarperCollins, and Simon & Schuster -- settled right away.  I don't know how long it will take before the lawsuit has an impact on eBook prices -- and maybe it never will -- but I do look forward to being able to shop around for the best prices again!