Just after the Department of Justice launched its antitrust lawsuit against Apple and five major publishers, Amazon announced plans to slash e-book prices. But while the move is expected to cut the prices of major titles from $14.99 to $9.99 or less, analysts believe the benefit to consumers will be short-lived. Amazon, which already controls around 60% of the e-book market, can afford to sell books at a loss to boost Kindle sales and the price-fixing lawsuit is expected to give it an overwhelming advantage, allowing it to drive competitors out of the market and start dictating its own terms to publishers.
The DoJ accuses the publishers of conspiring with Apple to set their prices, which Amazon was forced to match. With the bookselling giant now free to start cutting prices again, experts predict that the number of titles and authors on offer will start shrinking as competition fades. Traditional bookstores, meanwhile, fear that the rising price gap between ink-and-paper books and e-books will be a death blow to a struggling industry. "Amazon must be unbelievably happy,” a publishing analyst tells the New York Times. “Had they been puppeteering this whole play, it could not have worked out better for them." (Read more Amazon.com stories.)