NEW YORK—Amazon.com Inc. and Apple Inc., two of the leading online e-book sellers in the market, are facing a probe into their sales practices that could challenge their pricing strategies.
Connecticut Attorney General Richard Blumenthal on Monday announced that his office is investigating pricing agreements between the two companies that could undermine potential competitors.
At the source of the issue is whether the companies are unfairly setting prices for e-books that could undermine smaller competitors. Blumenthal’s office found that e-books for major titles at four of the largest U.S. online bookstores—Apple, Amazon.com, Barnes & Noble, and Borders—are identical.
“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 on Monday.
“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.”
The Seattle-based Amazon and the Cupertino, Calif.-based Apple signed agreements with publishers containing so-called “most favored nations” (MFN) clauses, ensuring that they receive the best pricing from publishers. Publishers with agreements with the named companies include Simon & Schuster, Penguin Books, News Corp.’s HarperCollins, and Hachette. The MFN clauses prevent publishers from giving other companies better prices, unless they also match Apple and Amazon’s prices.
Last month, the Wall Street Journal reported that Texas is also investigating e-book publishers and sellers over e-book pricing.
Amazon’s Kindle reader is the best-selling e-book reader on the market. Apple this year launched its iPad tablet computer, which has functionality beyond that of reading books. The iPad sold 3 million copies in its first 80 days, Apple said.
Connecticut Attorney General Richard Blumenthal on Monday announced that his office is investigating pricing agreements between the two companies that could undermine potential competitors.
At the source of the issue is whether the companies are unfairly setting prices for e-books that could undermine smaller competitors. Blumenthal’s office found that e-books for major titles at four of the largest U.S. online bookstores—Apple, Amazon.com, Barnes & Noble, and Borders—are identical.
“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 on Monday.
“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.”
The Seattle-based Amazon and the Cupertino, Calif.-based Apple signed agreements with publishers containing so-called “most favored nations” (MFN) clauses, ensuring that they receive the best pricing from publishers. Publishers with agreements with the named companies include Simon & Schuster, Penguin Books, News Corp.’s HarperCollins, and Hachette. The MFN clauses prevent publishers from giving other companies better prices, unless they also match Apple and Amazon’s prices.
Last month, the Wall Street Journal reported that Texas is also investigating e-book publishers and sellers over e-book pricing.
Amazon’s Kindle reader is the best-selling e-book reader on the market. Apple this year launched its iPad tablet computer, which has functionality beyond that of reading books. The iPad sold 3 million copies in its first 80 days, Apple said.
