Quote:
Originally Posted by stonetools
The DOJ has been investigating the agency pricing agreement for some time. The reason why they haven't taken legal action, IMO? Because they realize that undoing agency would hand the ebook retail market to Amazon on a silver platter.
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From the article:
"The publishers' argument that agency pricing increased competition hasn't persuaded the Justice Department, a person familiar with the matter said. Government lawyers have questioned how competition could have increased when prices went up. Amazon declined to comment."
How has the agency model increased competition? What now-thriving ebookstores were languishing before the agency model? Does Diesel have a better market share? BooksOnBoard?
Agency pricing effectively killed Fictionwise. It killed any bookstore that wanted to use discounts and coupons as its method to draw in customers of mainstream bestsellers, and any bookstore whose business model included "buy $50 worth of books; get a free ebook worth $5 in your next sale."
Agency pricing prohibits a lot of innovation in business models, and there's no indication it's done anything to hurt Amazon's position.