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Old 08-02-2010, 11:58 PM   #9
HansTWN
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Join Date: Jun 2009
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Quote:
Originally Posted by Worldwalker View Post
Is there a public version of this article available anywhere?
Quite strange. I accessed this link from a Yahoo news website. Apparently you can freely access this article with the Yahoo referral without registration. So please see below:


"The attorney-general’s office in the US state of Connecticut said on Monday that it was examining the pricing of digital books by Amazon and Apple, the e-reader rivals, citing competition concerns over their deals with leading *publishers.

Richard Blumenthal, the state’s most senior legal official, has written to both Apple and Amazon expressing concern that their pricing agreements with publishers “threaten to encourage co-ordinated pricing and discourage discounting”.
EDITOR’S CHOICE
Wylie threatens broad digital expansion - Jul-29
John Gapper: Publishers need to be creative - Jul-28
E-books overtake hardcover sales at Amazon - Jul-20
Sony moves to standardise e-books - Aug-13
Sony launches low-cost book readers - Aug-04
Springer leaps ahead in academic e-book market - Jul-05

The move represents a potential threat to publishers’ efforts to take control of e-book pricing amid the rapid growth in demand for digital titles for reading devices such as Amazon’s Kindle and Apple’s iPad.

Both Amazon and Apple, which dominate the rapidly growing e-book market, now have agreements with leading publishers that give the publisher of an e-book the right to set its list price, in exchange for granting the seller a 30 per cent share of the revenues.

The Connecticut inquiry focuses on unconfirmed reports that Amazon and Apple have secured guarantees they will receive the same pricing terms from the publishers of an e-book as any rival, which would allow them to match the lowest price in the market.

In his letters to the two companies, Mr Blumenthal said a so-called “most favoured nation” deal would lead to “the establishment of a price floor for e-books offered by the publisher”.

He also said that an initial survey of bestsellers by his office on Amazon, Apple, Borders and Barnes & Noble’s digital bookstores found that “almost uniformly, prices were identical between all four sellers”, which could be “to the ultimate detriment to the consumer”.

Amazon and Apple offer most bestsellers in e-book form for $9.99, significantly below the publishers’ listed prices for new hardbacks, which are often more than $20.

The publishers’ support for the agency pricing model is based on their fears that aggressive discounting of e-books will play havoc with their traditional business model.

Mr Blumenthal said that he wanted both retailers to discuss the issues further with his office.

Apple declined to comment on Monday, while Amazon could not be contacted.

Traditional books are sold at a wholesale price negotiated between the publisher and the retailer, which then decides the final retail price – a model initially adopted for e-books by Amazon, but abandoned in favour of the “agency model” established by Apple following pressure from publishers this year.

In 2007, the US Supreme Court ruled that manufacturers could set minimum resale prices in some circumstances.

But laws in several states, including California, New York and Connecticut, still consider setting minimum prices *illegal."
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