Amazon are the villain. They've used their dominant position to bully book publishers into accepting outrageous terms. Those terms aren't for the benefit of customers. Their drive to to force eBook pricing at $10 or less is not because the poor oppressed people deserve $10 books. It so they have a tidy sales soundbite to drive customers away from physical books (where publishers can set their own terms) to the Kindle platform where Amazon's word is final. Basically Amazon are trying to control the entire concepts of books. They can't control the technology behind physical books, so they're trying to kill it in favour of their own. I find that pretty ugly and scary and hope they don't succeed.
Apple are the villain. They've used their dominant position to bully
music publishers into accepting outrageous terms. Those terms aren't for the benefit of customers. Their drive to to force
music pricing at
fixed price points is not because the poor oppressed people deserve
Apple-priced music. It so they have a tidy sales soundbite to drive customers away from
CDs (where publishers can set their own terms) to the
iTunes fairplay platform where
Apple's word is final. Basically
Apple are trying to control the entire concepts of
music. They can't control the technology behind physical
music, so they're trying to kill it in favour of their own. I find that pretty ugly and scary and hope they don't succeed.
Let me proactively guess: "music is totally different than books" and "what Apple did for the music industry was
save it", etc.
The concept of the competitive nature of capitalism is to drive prices as low as possible for consumers. When the competition is thinned out and/or allowed to collude, this fundamental benefit (for all) breaks down and it flips into an exploitation-based relationship between seller & buyers (see the "big 3" dominated cell-phone industry). Apple did wrong here, as the play was to make Apple and book publishers much more money at the consumer's experience... not really do anything that delivered a greater benefit to those consumers.
Amazon has it's own issues but Amazon pricing- thinnest margins or not- is generally favorable for the consumers wanting to buy what Amazon sells. Capitalism in a pure form would have competitors beat Amazon at it's own game by finding some way to price things better than them... not by entering into agreements to put profits before doing what is best for consumers. If no one could find some way to beat Amazon's pricing in a competitive market, than the drive to best competitive-driven pricing had been perfected at Amazon (move along to another market if you can't compete).
If Amazon was accomplishing this by taking a loss, eventually the losses would pile up and Amazon would go out of business. Then the market would be free to compete anew in trying to find the ideal price points for products formally sold by Amazon. There would be no more lock-in with Kindle than there is lock-in with iDevices/iTunes. Even if Amazon or Apple managed 90% market share at a loss, eventually the losses would force them out of business or into raising prices to profitability. At that point, new competitors could step in and compete.
I look at Amazon and see a good competitor for Apple... someone to keep Apple in check. If I want to fantasize about some monopoly scenario where a company is going to ultimately fully own an important market and exploit consumers by ripping us off with monopoly-based pricing, I'd be much more worried if that company was Apple (which consistently demonstrates a fundamental focus on relatively fat profit margins, right off the top). If Apple ever got a monopoly hold on any market, I'd hate to see what Apple would do with it. Note: I own a lot of Apple products and like Apple just fine but I do know enough about this particular event to believe (IMO) that Apple was very much in the wrong for it's part in this. There was no tangible benefit for consumers in what Apple did here- just wins for Apple and the book publishers if they were able to get away with it long-term.