The debate over the e-book pricing controversy is not expected to draw a conclusion in the near future as the verbal attacks between the Department of Justice and Apple seem to have just started. The DOJ sued Apple and five other publishers on allegations of price fixing and disrupting market trends. Apple on the other hand retaliated by stating that it was merely trying to reduce the monopoly Amazon enjoys in publishing industry. There are speculations that point towards an unintended conclusion to the controversy where Amazon ends up deciding the price of most e-books. Other analysts have been quoted praising the government for taking an initiative on reducing the prices of e-books.
However, from the consumer’s point of view this lawsuit is just a fight for deciding which business strategy is better- the old outdated yet successful one that Amazon currently employs or Apple’s new emerging idea aimed at creating a difference.
Publishers have always been at war with companies like Amazon, and hate dancing to the tunes of a single company. So much power concentrated in the hand of one company works against the interests of publishers as it allows the company to dictate terms. Amazon has been known to offer e-books at a significant discount in an attempt to increase market share and promote its own start-ups like the Kindle. Publishers on the other hand, think that awarding such massive discounts only reduces the value of the book.
Apple didn’t have any particular interest in the publishing industry until recently. It was always focussed on expanding its own private ecosystem in the form of the App Store and iTunes, which mainly consisted of songs, videos, applications etc. Hence, the entry of a brand like Apple into the publishing industry sparked an interest among publishers. In fact, most publishers were more than happy when Apple reached out to them with a publisher centric model in which the retailer gets a share in the price, but the price of the book remains at the publisher’s discretion.
Authors have sided with Apple on this issue and say that Amazon is in grave danger if it refuses to agree to this new business model. Consumers on the other hand find themselves in a win-win situation as the consumer is expected to benefit if either of these parties win in the form of lower prices on both platforms.
