Before: price competition between booksellers like Kindle, Nook, Sony, Kobo etc..
After: no price competition between booksellers
With no price competition, the prices that consumers pay will rise. This whole DOJ lawsuit is about price competition (before) and the lack thereof (after). Best way to get rid of price competition?
"The prices will be the same." which Steve Jobs admit to it back in January 2010 in this video
Walt Mossberg: "Why should she buy a book for $14.99 on your device when she can buy one for $9.99 from Amazon or Barnes & Noble?"
Steve Jobs: "That won't be the case."
Walt Mossberg: "You won't be $14.99 or they won't be $9.99?"
Steve Jobs:
"The prices will be the same."
Steve Jobs: "Publishers are actually withholding their books from Amazon because they're not happy."
It doesn't look good for the publishers either:
http://www.teleread.com/chris-meado...ns-to-dismiss-class-action-price-fixing-suit/
There’s some fascinating stuff here. For example, from pages 30-31 of the ruling, the judge explains why collusion is so probable. It’s a classic “prisoner’s dilemma” scenario: if each individual publisher hadn’t known it could count on most of its competitors to move to agency pricing as well, it would have made little sense for it to do so alone:
The costs of such a unilateral switch to the agency model would be substantial. The publisher would be selling its eBooks at a higher price than its competitors and would therefore be losing market share. This loss in market share would in all likelihood have been large. Random House gained significant market share from the Publisher Defendants during the months between their adoption of the agency model and Random House’s capitulation. The eBook sales by Random House increased 250 percent in 2010 as it continued to sell them at $9.99. At the same time that an individual publisher would be losing market share, it would be taking in less revenue per sale because of Apple’s 30 percent commission. In addition, the publisher would probably lack the leverage to force Amazon to accept the agency model. Potentially, then, this publisher would be barred from selling its eBooks to Amazon.
Would it make sense for 1 of the 6 Big Publishers to go at it alone? (switch to agency and see its market share tank)
If not, it would need the backing of the other publishers who would do the same.