Amazon Loses E-Book Pricing War

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Publishers have emerged victorious in the e-book pricing war with Amazon. The world's largest online retailer has conceded to the demands of three major publishing houses and will cease heavily discounting new best-selling e-books, according to the Wall Street Journal.

Amazon and Macmillan already exchanged fisticuffs about money in February with Macmillan leaving the ring unscathed. Now Simon & Schuster and HarperCollins have joined the bandwagon in refusing to allow retailers to set e-book prices.

In order to stay competitive with Apple's iPad, Amazon needs to keep as many publishers in its corner as possible. After many of them balked at a $9.99 price-point and embraced the iPad's intent to sell e-books in the $15 range, Amazon was forced to reconsider its stance. This news means that rumors of Apple matching Amazon's prices are false given that publishers are now in control.

Interestingly enough, Random House, the world's largest book publisher, still hasn't chosen a side, likely out of fear of the iPad's negative influence on e-book pricing.

My PCWorld colleague Jeff Bertolucci opined that publishers have tunnel vision when it comes to prices and may have a negative impact on the growth of the e-book market.

Amazon declined to comment on the Wall Street Journal article.

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