Connecticut AG To Grill Amazon, Apple Over E-Book Price Fixing

suraj.sun tips news that Connecticut's Attorney General has demanded a meeting with Apple and Amazon to discuss anti-competitive pricing methods in the e-book market. From Ars: "Richard Blumenthal says that he wants representatives from both on-line giants in his office ASAP to discuss what Blumenthal calls their 'most favored nation' arrangements with big book companies like Macmillan and Simon & Schuster. The crux of the MFN concept is that a given product maker must offer a given distributor the lowest price it's offering anyone. If a competing distributor gets a price break, they get it too. 'The net effect is fairly obvious,' Blumenthal warned in his letter to Amazon (PDF), 'in that MFNs will reduce the publisher's incentive to offer a discount to Amazon if it would have to offer the same discount to Apple, leading to the establishment of a price floor for e-books offered by the publisher.'"

Comments

Zero cost copying

[FriendlyLurker]

Of course ebook prices are fixed (amoungst other digital "goods") - how the hell do you price something that can be copied infinitely at next to zero cost? And therein lies the problem...

Re:Zero cost copying

[MBGMorden]

I don't see where this would help though. Apple and Amazon - being the giants of this particular industry, would logically be able to negotiate the lowest prices anyways. I don't see how this will affect much. Now if "Joe's Online Bookshop" had managed to negotiate this type of thing, it might be a different story. As it is, its about like complaining that Wal-mart made an arrangement with Rubbermaid so that they had to have the lowest cost on their stuff. IE - just a contractually enforced status quo.

Re:Zero cost copying

[evilbessie]

But that is a monopoly, why would anyone look anywhere else if they know the best deals are always at Amazon? Small online retailers can't offer special discounts or offers if they are not allowed to sell below the Amazon/Apple floor, you don't get effective competition hence why it needs to be looked into.

Talking to the wrong people

[SuperKendall]

It seems absurd to me to bring in Amazon and Apple over this, when they aren't the ones who set prices (Amazon used to).

I don't see, at all how Apple and Amazon demanding the lowest price offered sets any kind of "floor" beyond the natural floor of the lowest price the publisher is willing to charge. The only thing it affects is the ability to charge a lower price at one vendor than another, but if that were OK how would that help the consumer? That to me would seem to be used to squeeze out a competitor and generally shrink the book market to one clear leader, who could then more easily collude with publishers to keep a higher average price for books beyond loss leaders...

Re:Grandstanding

[KevinIsOwn]

This is just grandstanding by a politician running for office.

You can claim grandstanding all you want, but those of us from CT know that Richard Blumenthal goes up against corporations from all around the US all the time. Sometimes they get picked up by the media more than others, but this really ins't anything out of the ordinary for him.

And you can like him or hate him for that, I'll keep this post apolitical, but this is just not unusual for him.

Re:That doesn't hold

[Mr. Underbridge]

With specific regard to luxury items? Damn right.

Sorry, but those are not exempt from the law. Also, consider that any price-fixing malfeasance is what is *keeping* them as luxury items. If the price falls, us little people will be able to afford them too. Even that ignores the appalling notion that books should be considered a luxury, but I digress.

Also, you use too many commas, and your overall tone comes across as arrogant and standoffish.

You're a grammar pedant; you mistake simple logical analysis for arrogance; you falsely assume that I give a damn what you think of my 'tone'.

But do have a nice day. ;)

Re:Paper is Cheap; People and Processes are Costly

[Omestes]

No clue. But, actual productions costs willing, I'd say at least 50% of the profits, with the rest divided between the various other parties (publisher, retailer, and whoever latches on). The author should get more than anyone else, since without them the rest would languish and die.

I really have no clue though, since I'm not involved in the industry, and don't know the full break down of the costs of publishing various versions of media.

In short: more.

I do find it odd that digital copies cost less to produce, cost as much as a trade, but authors get far less (generally) per copy. Which mirrors the music industry pretty well, sadly.