Recent events involving two titans of the business world—Apple and Amazon—could have a huge ripple effect on anyone who sells or consumes reading materials. It’s just not clear what sort of effect that will be.
First, the U.S. Department of Justice’s Antitrust Division handed down its recommendedpunishment for Apple’s part in setting e-book prices with five publishers. As expected, the DOJ wants to prevent Apple from negotiating any new publisher agreements that would constrain price competition. However, the DOJ goes beyond that, insisting Apple should for five years dodge any pricing agreements with other suppliers of content, including movies and TV shows, music, e-books, or other digital products.
In addition, for a two-year period, the DOJ wants Apple to permit its competitors, including Amazon and Barnes & Noble, to sell e-books through their iOS apps without taking a 30% cut of the action. B&N and Amazon both disabled their in-app selling to avoid paying the commission, forcing users to click a few more times to buy e-books through a web browser.
Consumers think the recommendations are dandy, especially those with iOS devices, because they think e-book prices will drop across the board. Yet, that’s not a given. Since the court decision, Amazon has both raised and lowered book prices.
More recently, Amazon indirectly made waves when its founder, Jeff Bezos, bought The Washington Post and related newspaper properties. Bezos made the purchase out of his own wallet, not Amazon’s, but most pundits (including The Post’s own bloggers) assume he’ll haul The Post more firmly into the digital realm and set a new standard for the news industry, just as he did with bookselling.