Amazon's Buy Button Rumors Swirl

Rumors swirled today that Amazon (AMZN) could revoke the buy buttons for books by Simon & Schuster, HarperCollins, Penguin, or Hachette if the major publishers can't strike an eBook deal with the online bookseller.

Neither Amazon nor the publishers went on the record about the eBook pricing debate. However, the New York Times has spoken with unnamed publishing executives about the terms of the eBook deal--noting that major publishers are "reluctant" to strike this kind of deal: "Amazon has agreed in principle that the major publishers would be able to set prices in its Kindle store as well. But it is also demanding that they lock into three-year contracts and guarantee that no other competitor will get lower prices or better terms."

Around the Internet, various commentators weighed in. eBookNewser noted that "it's a war out there" also reporting on Amazon's quiet launch of a Kindle App for the Mac.

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Quiet launch

>reporting on Amazon's quiet launch of a Kindle App for the Mac

Yesterday there was a picture of a Mac laptop and link to the Mac Kindle software that took up 1/2 of the Amazon main page. Putting something front and center on a webpage that gets a few million hits a day is only slightly quiet.

Isn't this price-fixing? RICO?

isn't it price-fixing when companies band together to established "fixed prices"???? I thought this was illegal. "no other competitor will get lower prices" sure sounds like price fixing, although IMNAL or a cop or an expert in anything.

"Amazon has agreed in principle that the major publishers would be able to set prices in its Kindle store as well. But it is also demanding that they lock into three-year contracts and guarantee that no other competitor will get lower prices or better terms."

Price fixing

Colluding on price amongst competitors, also known as horizontal price fixing, is viewed as a per se violation of the Sherman Act regardless of the market impact or alleged efficiency of the action. In 2007, the U.S. Supreme Court ruled that vertical price fixing by a manufacturer and its retailers, also known as retail price maintenance, is not a per se violation.

http://en.wikipedia.org/wiki/Price_fixing

Also "favored nation" isn't illegal

I think this (Anonymous) gets it exactly right. As for assurance that no other party will get a better price, a "favored nation" clause, that's fairly common in *government* contracts with businesses/suppliers, so it would be hard to call it improper in a business' contract with its suppliers. It basically says you can't give someone else a sweetheart deal without matching it for us: Not a violation of the Sherman Act or RICO.

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