Amazon Announces Intent To Start Slashing Kindle Book Prices In Wake Of Antitrust Settlements

April 13, 2012
By

Yesterday the New York Times reported:

As soon as the Department of Justice announced Wednesday that it was suing five major publishers and Apple  on price-fixing charges, and simultaneously settling with three of  them, Amazon announced plans to push down prices on e-books. The price  of some major titles could fall to $9.99 or less from $14.99, saving  voracious readers a bundle.

But publishers and booksellers argue that any victory for consumers will  be short-lived, and that the ultimate effect of the antitrust suit will  be to exchange a perceived monopoly for a real one. Amazon, already the  dominant force in the industry, will hold all the cards…

The government said the five publishers colluded with Apple in secret to  develop a new policy that let them set their own retail prices, and  then sought to hide their discussions…After that deal was in place in 2010, the government said, prices jumped  everywhere because under the agreement, no bookseller could undercut  Apple.

On Slate, Barry C. Lynn argues that these developments will ultimately ruin the entire book business and supply chain:

On the surface, the DoJ’s action may seem perfectly reasonable. The antitrust enforcers charged that five big publishers  conspired with Apple to raise the prices of e-books by creating a new  regime in which the publishers, rather than the retailers, priced their  books.

Absent any other consideration whatsoever, higher prices do indeed  result in a bad outcome: namely, fewer books in the hands (or on the  screens) of American citizens.

But while cheaper e-books might be a good short-term outcome for some  readers, and for those companies pushing for wider adaption of e-readers, there are significant downsides on the horizon…

Lynn goes on to paint a doom-and-gloom scenario in which Amazon systematically drives every other bookseller (and many publishers) out of business, then begins the inevitable process of ratcheting up its prices to a by-then captive audience of consumers. Commenters on the article don’t seem all that worried.

Similarly over-the-top accounts can be read in The Atlantic’s The Justice Department Just Made Jeff Bezos Dictator For Life and Forbes’ Amazon’s Greed May Prove Its Undoing In E-Book Price War.

Salon offers a completely different view of Amazon in its story about Amazon’s little-known largesse in offering grant money to small publishers and literacy programs, totalling up to approximately $1 million annually.

For another informed counterpoint, see this post by author JA Konrath, who takes big publishers to task for failing to offer reasoned counterarguments to his and others’ rebuttals of their various Amazon-will-be-the-death-of-us-all scenarios.

So is Amazon the Big Bad Wolf, or an aggressive, though misunderstood, corporate good citizen, just looking out for the best interests of its customers and literacy at large? Read up, and judge for yourself.

This is a cross-posting from Publetariat.

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