Prior to the introduciton of the Agency Model, Amazon was only selling Best Sellers at 9.99 (as a Loss Leader to promote the sale of their Kindle). They weren't selling ALL books at a loss.
No, of course they weren't. But they're called "best sellers" for a reason. The point was that they were trying to undercut the entire book pricing scheme by pricing the
most popular books under cost, and setting a flat cost for everything else so people would just start assuming "ebooks cost $10".
You could technically buy an older book from another ebook store for less than $10 at that point, but since most of what people buy is bestsellers (again, they're called that for a reason), and most people are probably going to lock themselves into one system (particularly if they go with a hardware device like a Kindle), it's a no-brainer to go with the store that offers the expensive new stuff for the least money.
And if you keep that up long enough, eventually you have no competition and you've devalued bestsellers down to the price point you were aiming for.
Which is the whole point of establishing a monopoly; you don't want to charge less
forever for
everything, you just need to do it long enough with enough products to drive your competitors out of the market, at which point you can do whatever you want because you've got a monopoly.
Let's not forget that Amazon
did this back in 2010 during the period the antitrust suit deals with. When Amazon got huffy about Macmillan wanting to charge more for bestseller ebooks, they pulled
everything of Macmillan's from their store, hardcopy included. If you are Amazon, the biggest bookstore on earth, that is not a small thing to do to a publisher to use as a club to get them to do what you want.
Or in 2012, when Amazon
pulled every ebook from a smaller publisher because they didn't want to lower their prices after Amazon had been forced into the agency model.
On one hand, Amazon is indeed trying to lower the prices of at least some ebooks in the short term. On the other, they've demonstrated a willingness to resort to brute-force tactics to achieve that, and I'll believe their altruistic motives when I see them with less than 80% of the market.