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Originally Posted by khalleron
That isn't what was happening. Amazon was buying wholesale from the publishers and then selling their hardcover priced ebooks at trade paperback prices. Amazon was actually taking a loss on the most popular books. The publishers were getting the same price no matter what price Amazon sold them for.
Then Apple got involved, and Apple did not want to sell popular ebooks for $9.99, so they colluded with the BPH to force Amazon to sell books at a higher price or have no bestsellers.
Which was illegal, period.
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Allegedly.
The point is Amazon wouldn't have taken those losses for ever. Steve Jobs:
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Jobs “wrote to an executive at the parent company, in part”:
As I see it, [Conspiring Publisher] has the following choices:
1. Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.
2. Keep going with Amazon at $9.99. You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99. They have shareholders too.
3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started, there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.
Maybe I’m missing something, but I don’t see any other alternatives. Do you?
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That convinced the publisher. Its arguable that the five publishers all saw that Amazon would likely offer unfavorable terms in the future and so did not collude, but independently decided to go with Apple. The courts will decide that.