An e-book price-fixing settlement is a victory for Amazon—and could pave the way to lower prices for consumers. A federal judge has approved a settlement between three publishers and the Justice Department after officials argued that a total of five publishers were teaming up with Apple to boost prices and limit Amazon's ability to discount them. Now, Amazon will be able to cut prices to earlier levels—around $9.99, or cheaper. That could exert serious pressure on the entire market, experts tell the New York Times.
"Everybody competing with Amazon in the e-book market had better fasten their seat belts," says a publishing consultant. Now, the three publishers in the settlement— HarperCollins, Simon & Schuster, and Hachette—must terminate their Apple contracts and any other deals that prevent retailers from setting prices. The publishers also face a two-year "cooling-off period" in which they can't sign new deals with similar restrictions. Two other publishers, plus Apple itself, refused to join in the settlement, meaning a trial next summer. The losers in all this? Independent bookstores, says an Authors Guild leader, who will struggle even more to compete with lowered prices.