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...

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...