10 August, 2011

Price-fixing for E-Books!?

As anyone surfing around in the digital world probably is aware of, there has been quite some discussion over e-books, which you can could read on a mobile device such as the iPad or Amazon's kindle. I honestly don't know anyone who does, but I must admit I have occasionally seen people on the train doing it. Personally, I like the look and feel of a book, of turning the page and of having a shelf full of books in my home. That said, I have considered getting a kindle (very shortly). What has driven me away from that idea is that books cost the same, regardless of the format. Economically speaking that makes no sense whatsoever.
A digital copy of a book costs the publisher much less, because it does not have to be printed, bound, shipped...and so on. Nonetheless, mostly paperbacks and digital copies cost the same.
The same thought apparently occurred to the American consumer rights firm Hagens Berman, which filed a class action against Apple and five big publishers, namely HarperCollins Publishers, Hachette Book Group, Macmillan Publishers, Penguin Group, and Simon & Schuster. The following is taken from the firm's   press release:
"According to the suit, publishers believed that Amazon’s wildly popular Kindle e-reader device and the company’s discounted pricing for e-books would increase the adoption of e-books, and feared Amazon’s discounted pricing structure would permanently set consumer expectations for lower prices, even for other e-reader devices.
The firm believes that Apple was involved in the scheme. The complaint alleges that Apple believed that it needed to neutralize the Kindle when it entered the e-book market with its own e-reader, the iPad, and feared that one day the Kindle might challenge the iPad by digitally distributing other media like music and movies.
The complaint claims that the five publishing houses forced Amazon to abandon its discount pricing and adhere to a new agency model, in which publishers set prices. This would prevent retailers such as Amazon from offering lower prices on e-books."
If Amazon would refuse the model, the publishers would deny them access to digital copies of the books. This could also be effectively done, since the publishers control 85% of the market for popular novels. Right now the firm is looking for individuals to join the action here. Anyone? E-Books?

1 comment:

  1. E-products in general are easily subjected to overpricing. A full i-tunes album may cost over 9 € which is what a full-length CD used to cost. The only difference is actually a slight reduction in quality (as you buy them in mp3-quality) and you get no physical packaging...

    E-books is an excellent example, but consumer groups/ competition authorities should definitely investigate more e-products!

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