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Connecticut AG Having a Look at Amazon and Apple eBook Pricing no comments
Richard Blumenthal, attorney general of Connecticut, has sent letters to both Amazon and Apple expressing concern that their agreements with publishers may block competitors from offering ebooks at a lower price.
Apple and Amazon have both negotiated agreements with the largest publishers that include “most favored nation” (MSN) provisions that are designed to ensure that the two resellers receive best prices over competitors.
After the introduction of the so-called “agency model” of ebook pricing many titles are offered at the same price regardless of where one shops. Blumenthal is concerned that consumers are adversely affected as other resellers are effectively blocked from offering lower prices than Apple or Amazon.
“These agreements among publishers, Amazon and Apple appear to have already resulted in uniform prices for many of the most popular e-books — potentially depriving consumers of competitive prices,” Blumenthal said. “The e-book market is set to explode — with analysts predicting that e-book readers will be among the holiday season’s biggest electronic gifts — warranting prompt review of the potential anti-consumer impacts.
“Amazon and Apple combined will likely command the greatest share of the retail e-book market, allowing their most-favored-nation clauses to effectively set the floor prices for the most popular e-books. Such agreements — especially when offered to two of the largest e-book retail competitors in the United States — threaten to encourage coordinated pricing and discourage discounting.”
Blumenthal notes that under US antitrust laws MFNs are not illegal per se, but neither are they per se legal.
Blumenthal has invited the two companies to visit his offices and discuss the matter. You can read the letters at the links above.
