How e-books can move forward after price-fixing lawsuit

Eve Troeh Apr 12, 2012

Jeremy Hobson: Well speaking of Apple, it’s being sued by the federal government. The Department of Justice is accusing Apple and five publishers fixing prices for electronic books, or e-books. Three of the publishers have already settled.

Marketplace’s Eve Troeh joins us now to discuss. Good morning.

Eve Troeh: Good morning.

Hobson: Tell us what this lawsuit aims to do?

Troeh: What the Department of Justice basically wants to make the market for e-books more fair. It’s a big slap on the wrist to Apple, and these publishers, to try to get them to stop setting prices for e-books. Of course, the publishers want to set prices to make more money; they’re not going to be able to make more money now. That’s good news for us, bad news for them. As for Apple, e-books haven’t really been a huge business for them anyway. Amazon actually already had more of the business. Their Kindle is the big thing, and now they can sell books for the Kindle at whatever price they want.

Hobson: Could this lawsuit end up changing what we pay for e-books?

Troeh: It will — they’ll get cheaper. But individual e-books aren’t really the big deal, says Ken Doctor. He studies digital media at Newsonomics. He says the big, long-term game is subscriptions, like Netflix or Audible.com. So Amazon a few years ago had this service called Prime, where you paid like 80 bucks a year and you got free delivery. Now they’ve added all this digital content to that.

Ken Doctor: Now Prime members get access to movies; they can borrow books from the Amazon library. So look for Amazon to make more deals around books, because what the Department of Justice suit and settlements do is give the retailers a lot more flexibility.

So he expects an Apple-Amazon war — not just about e-book prices. These companies want us to pick one of them for all of our content — one device for movies, books, magazines — everything.

Hobson:And they’re going to be fighting over all of that. Marketplace’s Eve Troeh, thanks a lot.

Troeh: You’re welcome.

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