The U.S. government is suing Apple and five major publishers, claiming they colluded to keep prices for e-books artificially high. Three of the publishers, HarperCollins, Hachette and Simon & Schuster, settled with the government immediately. Two others, Penguin and Macmillan, plan to fight the action along with Apple.
Analysts believe the main victor from the suit will be Amazon, which could now have overwhelming power in the e-book market.
From the NY Times:
“Amazon must be unbelievably happy today,” said Michael Norris, a book publishing analyst with Simba Information. “Had they been puppeteering this whole play, it could not have worked out better for them.”
Amazon which already controls about 60 percent of the e-book market, can take a loss on every book it sells to gain market share for its Kindle devices. When it has enough competitive advantage, it can dictate its own terms, something publishers say is beginning to happen.