Amazon crowed this week that it has 70 to 80 percent of the e-book market. Ironically, the declaration of market dominance occurred just as the attorney general of Connecticut, who seems to have penchant for probing high-profile, high-tech companies, announced his office had opened an investigation into “potentially anticompetitive e-book deals with Amazon and Apple.”
“Obviously,” he added, “from the beginning of Amazon, we’ve been very metrics-focused and we don’t typically throw out numbers we don’t firmly believe in.”
Both Amazon and Apple have cut pacts with those publishers guaranteeing they will receive the best prices for e-books over any competitors–something that in legal parlance is called a “most favored nation clause.”
“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,” Blumenthal said in a statement. “The e-book market is set to explode–with analysts predicting that e-book readers will be among the holiday season’s biggest electronic gifts–warranting prompt review of the potential anti-consumer impacts.”
“Amazon and Apple combined will likely command the greatest share of the retail e-book market, allowing their most-favored-nation clauses to effectively set the floor prices for the most popular e-books,” he added. “Such agreements–especially when offered to two of the largest e-book retail competitors in the United States–threaten to encourage coordinated pricing and discourage discounting.””
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