Amazon Inc is further strengthening its position in the e-book market as it announced plan to cut e-books’ prices, while Apple and five publishers fight charges over price fixing plot.
The announcement came soon after the US Department of Justice accused Apple of colluding with the five publishers including HarperCollins, Simon & Schuster , Hachette Book Group, Macmillan and Penguin to drive up prices.
The alleged conspiracy took place in 2010 when Apple was launching the iPad and was struggling for market share as the e-books market was dominated by Amazon and its Kindle digital reader.
The prosecution claims Apple proposed the so called “agency model” of pricing to publishers. It means publishers were able to set their own prices and receive 70% of the retail price, while Apple took a 30% commission, but under the agreement the publishers weren’t allowed to sell books cheaper to Apple’s rivals.