Amazon Talks About Cutting E-Book Prices

A news release just announce the following:  Moving swiftly to gain the upper hand after the Justice Department announced a suit against Apple and major publishers for price-fixing on e-books, Amazon lowered prices on major titles from $14.99 to $9.99 or lower. The charges against Apple put Amazon, which once controlled 90 percent of the e-book market, back in a powerful position to set prices. 

The government has accused Apple of colluding with four major publishers to charge consumers more than they would have paid otherwise. But publishers and sellers say readers won’t be any better off in Amazon’s hands, since the online seller already dominates the market and will now have even more control.

Is Apple in Trouble?

 Apple didn’t get to bask in the glory of its new iPad for long. The Justice Department has warned the company—along with five of the biggest U.S. publishers—that it plans to sue them for allegedly colluding to raise the price of electronic books, sources tell The Wall Street Journal.

The case alleges that just before the release of the first iPad, Apple worked with publishers to adopt a retail model in which the publishers set a price and Apple took a 30 percent cut of sales. The move was a reaction against Amazon, which had frightened publishers by selling e-books at $9.99.
 
After Apple adopted the pricing model, the publishers were able to demand a similar one from Amazon.