E-Book Drama: Did Amazon Muddle Evidence Against Apple?

e-book ipadAn antitrust case over the pricing and contracts of e-books is underway in a Manhattan courtroom. Involved are two of the biggest Internet companies: Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN).

The controversy started around the time when Apple introduced its iPad and opened an e-bookstore. Shortly thereafter, according to The New York Times, Amazon changed the way it sold digital titles to a model called “agency pricing”: one that allows publishers, not the retailer (in this case, Amazon) to set the price of the books.

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The case the U.S. Department of Justice is trying to make states that publishers were unhappy with Amazon’s uniform price of $9.99 for e-books, because they wanted to raise the price on new releases and bestsellers. The Justice Department believes Apple conspired with five big publishing companies by opening up an e-bookstore to force Amazon to switch to agency pricing, thus allowing publishing companies to price bestsellers at, say, $20 instead of the typical $9.99.