The office of Connecticut Attorney General Richard Blumenthal is bringing pricing agreements between Amazon, Apple and book publishers over e-book pricing under scrutiny to see whether these agreements violate antitrust laws. According to Blumenthal, both companies have made agreements with publishers guaranteeing them the lowest prices on some e-books, preventing rivals from offering competitive prices.
In a statement made yesterday, Blumenthal said, "These agreements among publishers, Amazon and Apple appear to have already resulted in uniform prices for many of the most popular e-books—potentially depriving consumers of competitive prices."
This antitrust investigation mirrors other investigations of Apple’s business practices being conducted by the Federal Trade Commission and the Justice Department, which are looking into both Apple’s music sales and its e-book deals, according to the Wall Street Journal, which goes into depth about the effects of the agency model on e-book pricing over the last few months.
Because publishers using the agency model are able to set their own e-book prices, those prices are the same across all e-book retailing sites. The WSJ notes that proponents of the agency model say it creates healthy competition by allowing publishers to make money from their e-books, meaning more publishers will get into the e-book game. Critics, however, say competition only works when prices go down, and the agency model has generally driven e-book prices up.
