Connecticut AG Investigates Amazon and Apple

Connecticut Attorney General, Richard Blumenthal, announced an investigation into the contracts Amazon and Apple have with US publishers, citing that both companies may have an unfair advantage in the retail e-book market.

On Monday, Blumenthal wrote to Amazon and Apple and requested a meeting with their attorneys to discuss the deals they had struck with five of the big six publishers to sell e-books under the terms of the Agency Model. The terms of the deal ensure Amazon and Apple will receive the best prices over their retail competitors. These five publishers are prevented by the agreed terms of the deal from offering lower discounts to retailers outside of Amazon and Apple.
In the letter on Monday, Blumenthal intriguingly said that while the deals may not be illegal under US antitrust laws – they are also not always legal either.

“The concerns are compounded, and hence potentially more troublesome, since this arrangement appears to be something that will be agreed to by the largest e-book publishers in the United States and two competitors who combined will likely command the greatest retail e-book share.

These agreements among publishers, Amazon and Apple appear to have already resulted in uniform prices for many of the most popular e-books — potentially depriving consumers of competitive prices,” Blumenthal said in a statement.”

Attorney General’s Press Release.
Source for this piece is CNN Money.

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