Apple, Amazon Probed Over eBook Pricing
August 3rd, 2010
The attorney general of Connecticut has started an investigation into the setting of eBook prices that Apple and Amazon have undertaken. The concern is that by ensuring that they receive the lowest possible price from publishers, which prevents other sellers from offering even lower prices, and fostering greater competition.
These agreements prevent the publishers from offering discounts to other distributors, as they would then have to offer the same discount to Apple and Amazon.
Both Amazon and Apple have reached agreements with the largest e-book publishers that ensure both will receive the best prices for e-books over any competitors — contract provisions known as “most favored nation” (MFN) clauses.[...]These agreements appear to deter certain publishers from offering discounts to Amazon and Apple’s competitors — because they must offer the same to Amazon and Apple. This restriction blocks cheaper and competitive prices for consumers.
[via MacRumors]
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