Reading between the lines
The agreements between publishers and retailers such as Amazon and Apple will be scrutinized as Connecticut's attorney general warns deals have resulted in less competition and pricier titles for consumers.
Richard Blumenthal, Connecticut attorney general showed off a preliminary review of the pricing agreements between five of the US's largest publishing houses and e-book retailers Apple and Amazon, according to The Wall Street Journal.
Blumenthal's probe follows another opened in June by his Texan counterpart. He has asked Apple and Amazon to meet him to discuss the possibility that their deals with publishers stop rivals from selling cheaper e-books.
He reportedly claims both sellers have secured publishing deals to ensure they get the best prices over any competitors. Amazon and Apple have signed up to an ‘agency pricing' model with five publishers that set their own retail prices. Under the deal, the publishers receive 70 percent of the retail price, while Apple and Amazon both reap a 30 percent share.
Blumenthal reportedly 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."
The probe is the latest in a long procession for Apple, which is already facing enquiries by the Federal Trade Commission and the Justice Department into whetther its iPhone and music businesses are anticompetitive.
As part of the Justice Department's antitrust probe, it is believed experts will scrutinise the publishing industry, also dragging Amazon's deals into the spotlight.
Although the Justice Department did not comment on the claims, it is already reportedly investigating Google's intended settlement with authors and publishers since it has shown an interest in rolling out a huge online library.
Blumenthal said: "My investigation into agreements between e-book publishers and Amazon and Apple has been initiated independent of any other law enforcement agency. We look forward to cooperating with any other federal or state agency that may be interested in working jointly."
