An E-Book a Day Keeps Amazon at Bay

The Department of Justice is going after Apple and five publishing companies, suing them for colluding to raise e-book prices. Amazon, the current leader in e-book sales thanks to the Kindle and the company's early domination of the market, takes a loss on their $9.99 books in order to pull in customers. Apple took a different route with its e-book store, allowing publishers to set the price and then taking a commission, also known as agency pricing. These publishers became unwilling to offer Amazon wholesale priced e-books, and prices rose from $9.99 to $12.99 and $14.99. Three publishers have already settled with the Justice Department, and have allowed Amazon and other retailers to return to what they call the "wretched $9.99 price point." A group of 16 states filed its own suit against publishers, and came to a settlement of $51 million with two publishers is set to provide restitution to consumers who bought the higher-priced e-books.

Apple and the two other publishers are set to face the DOJ in court; one of the CEOs said that taking a settlement would help Amazon "recover the monopoly position it had been building" and "have a very negative and long-term impact on those who sell books for a living." 

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