Amazon capitulated to Macmillan today and will allow the publisher to set prices for ebooks available for the Kindle reader. Amazon has sold new releases and bestsellers for a flat rate of $9.99, which Macmillan considered too low. The tussle over pricing prompted the online retailer to suspend purchases of all Macmillan titles, even conventional books, on Friday. Amazon says it's surrendering because "Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for ebooks.”
Amazon has been selling ebooks at a loss-making $9.99 in order to stimulate Kindle sales. Digital Macmillan titles will now cost $12.99 to $14.99. Steve Jobs will be happy with this agreement, as those are the prices negotiated with the 5 major publishers—including Macmillan—that have agreed to sell books for the iPad, the New York Times reports.