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Amazon, Apple under investigation for e-book pricing

A Kindle eBook reader

TEXT OF INTERVIEW

Mitchell Hartman: Connecticut's Attorney General today announced an investigation
into possible anti-competitive pricing of e-books by Amazon and Apple. Marketplace's Mitchell Hartman joins us to scroll through this story a bit. Good morning, Mitchell.

Mitchell Hartman: Good morning, Bill.

Radke: So whether there's a monopoly or not, aren't e-books relatively cheap?

Hartman: Well yeah, compared to new hardcovers, they're a bargain -- mostly under $15 at the big online retail sites like Amazon and Barnes & Noble. But they're more expensive than they used to be. When this e-reader technology was just coming out and no one knew if people would want to read a book on a screen, most e-books were priced lower, under $10. Then a few months ago -- conveniently, this just before Apple launched its new iPad -- five big publishers made a deal with Apple and Amazon. That resulted in higher e-book prices, and the publishes are guaranteed a bigger cut of sales.

Radke: And is that what might cross the anti-trust laws?

Hartman: Well, a number of government trust-busters seem to think so. Connecticut and Texas are investigating, so are the Federal Trade Commission and the Justice Department. Now in their defense, the publishers say that if prices are any lower, they'll actually lose money publishing e-books and fewer new titles would come out. On the other hand, you know, e-book sales are booming. Amazon's now selling more e-books than hardcovers. E-readers are flying off the shelves. I mean, all that looks to the antitrust folks like a pretty healthy market, and it suggests that the publishers don't need these deals to keep prices high and to keep growing their business.

Radke: OK, I'm logging you off now. Marketplace's Mitchell Hartman, thanks a lot.

Hartman: You're welcome, bye-bye.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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