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How's this for timing? Amazon will reduce its e-book prices, bringing some major titles down to $9.99 or less, from $14.99, the New York Times reports Thursday.
The planned price cuts come on the heels of the Justice Department's Wednesday announcement of an antitrust lawsuit against Apple and five publishers, claiming collusion over the pricing of e-books. As the Times notes, HarperCollins, Hachette and Simon & Schuster have already settled the charges. Penguin and Macmillan, along with Apple, have declined to settle.
The Times explains that Amazon already controls about 60 percent of the e-book market. The price cuts may be good for consumers in the short term—Forbes estimates the cuts could save consumers $252 million between now and 2015—but publishers and booksellers caution that its long term effects may end up giving Amazon a monopoly on the market.
Under a traditional book selling model, publishers had previously sold books for half the cover price, allowing retailers to set their own store price. But around the time Apple introduced its first iPad in 2010, the company moved to an "agency" model, where publishers decide the book price and Apple takes a 30-percent cut. As part of that move, Apple also reportedly stipulated that publishers couldn't let rival retailers like Amazon sell the same book for less, in effect making the agency model the new standard for much of the industry.