Amazon Beats Apple
Yesterday's court decision that Apple colluded with five publishers to set artificially high prices for e-books was an unambiguous victory for Amazon, which has long sought to lure readers to its Kindle device by selling e-books for $ 9.99.
.Yesterday's court decision that Apple colluded with five publishers to set artificially high prices for e-books was an unambiguous victory for Amazon, which has long sought to lure readers to its Kindle device by selling e-books for $ 9.99. This comes just a day after William Lynch, the CEO of Barnes & Noble resigned, in the wake of mounting losses. What does this mean? Very simply, that Amazon is an as strong position as it's ever been in the book market, on the ascent precisely at a time when its competitors are reeling.
A postmortem by The New York Times's David Streitfield put the matter bluntly:
Some in publishing suspected that Amazon had prompted the government to file its suit. The retailer has denied it, but it still emerged the big winner. While Apple will be punished — damages are yet to be decided — and the publishers were chastened, Amazon is left free to exert its dominance over e-books — even as it gains market share with physical books.
Meanwhile, the decision was a stinging loss for Apple, which decided to go to court instead of settling. Explains the Wall Street Journal:
The ruling—which follows Apple's high-stakes gamble to go to trial even though the publishers settled similar charges—exposes the tech company to as-yet undetermined damages and opens the door for the Justice Department to take a closer look at its other business lines. In settling, the publishers denied wrongdoing.
It should be noted that the Journal's famously conservative editorial page did not appreciate the ruling and is hoping that it will be struck down by a higher court.
Regardless of what the legal outcome may be, John Paczkowski argues at AllThingsD that the ruling, for now, won't mean much for consumers, who are already getting their e-books for cheap:
the DOJ’s victory today over Apple is largely a symbolic one. Its antitrust pursuit of Hachette Book Group, HarperCollins, Holtzbrinck, Penguin Group and Simon & Schuster already ensured competition in the industry. If there truly was harm done to the market, it has largely been undone. And if there are other players mulling moves similar to those that landed Apple and the publishers in hot water, they’ve likely been deterred. Otherwise, as Forrester analyst James McQuivey observes, the e-books business will pretty much remain as it is.
In other words, while consumers may not care much about who won this round of the digital wars, it's clear this morning to everyone in the publishing business that Amazon chief Jeff Bezos is the top dog when it comes to selling e-books — at least for now.
Photo via Associated Press.