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DoJ Investigation Will Lead to Two-tiered e-Book Price Model

The Department of Justice has filed suit against Apple and several book publishers, alleging they have colluded on setting prices for e-books. Legal theorists believe it will be difficult for Justice to make a case against Apple.  Even if it fails to do so, however, the e-book pricing model has already been upturned. Those publishers — Hachette Book Group, HarperCollins Publishers and Simon & Schuster — that have reached a settlement with the DOJ, the industry implications are profound, Mobile Marketer argues.

A Two-track Price Model

Namely, it could well lead to a two-tier e-book pricing model. The agreement these companies reportedly forged with DoJ would end the publishers agreements with Apple allowing Amazon and other book retailers to reduce prices for ebooks.  Mobile Marketer speculates that the suit will not overturn the agency model of setting e-book prices. However, because Justice’s focus is on prohibiting publishers from creating exclusive agreements that only use the agency model, publishers might start writing contracts that use both the agency and the wholesale model.

Prices Already Dropping

Amazon, for its part, is taking advantage of the shakeup caused by DoJ’s suit. It has announced plans to lower e-book pricing, bringing the book price back to $9.99—a pre iPad price, according to the New York Times.


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