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As a result of the DOJ action, certain things are clear and others disputed.
WHATS CLEAR
1. Agency pricing is here to stay. The DOJ could have forbidden agency pricing going forward. They didn't and the reason is that they have accepted the logic of agency pricing: that the creator should control the sale price of their product. What the DOJ seems most concerned about the "appearance of collusion". Had the publishers simply spaced out their moves to agency at three month intervals, there would have been no lawsuit, even though we would have ended up in the exact same place.
2. The DOJ and consumer advocates are unconcerned with idea of a monopoly being established through predatory pricing. We will see what happens after Amazon re-establishes its monopoly. ( For DOJ purposes, a company effectively hs a monopoly if it attains 80 per cent market share).
WHATS DISPUTED.
1. Whether Amazon's monopoly was based on its ability to out discount its rivals , as most business analysts (and I) believe, or whether its rivals can mantain market share, even if they don't discount as much as Amazon. We will know the answer for sure next year.
2. What Amazon will do if (I would say when) It regains an effective retail monopoly.
3. Whether BN can survive in competition with Amazon ( Most business analysts and investors are skeptical).
4. Whether Apple and Google are in for the long haul ( Although they are best able to price war with Amazon, they don't need to or want to). Right now, they are willing to hang around and Apple is actually an innovative force .
5. What the publishers will do next in order to escape a world in which Amazon becomes the only pipe to the consumer.
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