A settlement has been approved in the federal government’s suit against Apple and five of the largest publishing companies, all of which were charged with colluding to fix the price of e-books:
For the next two years, the settling publishers may not agree to contracts with e-book retailers that restrict the retailer’s “discretion over e-book pricing,” the court said. For five years, the publishers are not allowed to make contracts with retailers that include a most-favored nation clause. “The time limits on these provisions suggest that they will not unduly dictate the ultimate contours of competition within the e-books industry as it develops over time,” Judge Cote wrote.
It’s not often that such obvious abuses are so quickly corrected by regulators. There is now no floor under the price of e-books, which means publishing will have to adapt and evolve that much faster, as opposed to conspiring against consumers.
To the extent that this seems to empower Amazon as a mass-market e-tailer, Amazon will ultimately face its own price pressures as content inevitably decreases in price. (Which may be why Amazon seems to be relying so heavily on advertising on its Kindle e-readers for revenue.)
Context and previous Ditchwalk commentary here. Additional cranky commentary here.
— Mark Barrett
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