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Amazon had what is call a "natural monopoly". It was caused by the fact they offered something no one else did. No different than when AT&T has one.

Being competive means you offer a similar product at a similar price. However conspiring with publisers to meet a certain price even if they didn't want to, is price fixing.

Telling a seller he can't sell his books lower than a certain price is price fixing. If I feel my book isn't work 9.99 and I want to sell it for 5.99 or even less to encourage people to buy it who normally wouldn't, Apple' clause says I can do that. It says I MUSt sell it at 9.99 as a minimum.

Apple is fixing the price to insure they are getting 3.00 for every book sold.

Compare.If I sold a book that isn't popular for .99 and I sell 1M bec of the cost, Apple will get .30 on each dollar which isn't a lot of money, but it is when they had to do nothing but post a file to a server. This vs a popular book that will also sell 1M ehere Apple will get 3.00 for each sold. Which way si going to get you to a million faster?

The fact Apple says, 9.99 is the minimum price is price fixing.

QUADICON, on 25 April 2012 - 06:14 AM, said:

It appears that you completely misunderstand Apple's agent model.

Apple are not concerned with the price set for any book that is offered in their store. Apple are only concerned with getting their 30% commission on the sale of the book. The publisher sets the price at whatever point the market will bear. If the price is set at $15.00, Apple gets $4.50. If the publisher sets the price at $5.00, Apple gets $1.50. Apple does not set the price. Apple has a consistent commission policy of 30%. The other factor is "most favored nation" under which, Apple is guaranteed that the publisher will sell the book on their venue for the lowest price set by the publisher anywhere. For that guarantee the publisher gets access to a highly effective and successful sales venue.

Under Amazon's prior wholesale model, Amazon indeed fixed the price- thus fixing not only the price that the customer would pay but the price that the publisher would receive. Amazon fixed the price.

The same market forces that guide Amazon in their pricing strategy affect the prices that publishers set for their wares in Apple's store. The customer is not hurt by the agency model at all. In my opinion, the agency model is more beneficial to the customer than the wholesale model.

The favored nation clause is also allowed, and is used in many industries. In fact, Amazon themselves was using that same clause before.

QUADICON, on 25 April 2012 - 06:10 AM, said:

So true! Just because no book retailers out there are willing to engage Amazon in a price war that doesn't mean its Amazon's fault that they have a monopoly on their hand.
I'll start to listen to those complains about Amazon position when there are someone out there selling those same books at lower prices and curiously no one buy them.

QUADICON, on 25 April 2012 - 06:14 AM, said:

But Apple does not do that. Far from it - they even have a menu choice in the iTunes book store to view books that are 3.99 or less.
I'm not sure where you go that idea.

Why is everyone calling Amazon a monopoly? Yes, they were first to market and had the largest market share with an eReader: the Amazon Kindle was introduced in 2007. Amazon was not the only entity in the game at the time when Apple mandated, in early 2011, that Apps remove any external link to make purchases. Also selling eReaders were Barnes & Noble (Nook: introduced in 2009) and Borders (Kobo: introduced in 2010). I don't own an eReader or an iPad/iPhone device.
Applications could have links to the sellers own site prior to the Apple announcement which changed the way purchases were completed in an App for the iPad/iPhone. This change was made in the name of making it more convenient for the consumers. No longer would they have to click on a link and wait for a browser window to load. While this did result, what also resulted was a certainty that if something was purchased using an Apple device that Apple got a 30% cut of the sales price.
The change made in conjunction with the way purchases were made was in the price of the product. An App maker could not sell a product through the App at a higher price that it was sold by the App maker anywhere else. This change can have two possible outcomes. The first is that the App maker accepts the 30% fee as the cost of doing business with Apple and leaves pricing alone. This will result in less income, but steady pricing in the market. The second option is to raise prices everywhere the product is sold so that income levels remain the same. An example of this second option would be if I was selling a product for $10.00 everywhere and making a 5% profit all units sold would earn $.50. Under Apples rules to get an average of $.50 per unit assuming that equal units sell through an Apple App and other sources the price would have to increase to $11.80 (profit from Apple sales is $.41 and other sources is $.59.) If the price would have remained at $10.00 everywhere, again assuming equal sale through both Apple and non-Apple the average profit per unit would have fallen to $.425. $.35 through Apple and the original $.50 elsewhere. This option results in a 15% drop in profit for the merchant.
Given the above analysis, I believe it is Apple's policy of application approval which has resulted in higher eBook pricing

This post has been edited by JamesEvens: 27 April 2012 - 10:21 PM