The US Department of Justice (DOJ) is allegedly investigating Apple ebook pricing, and the Wall Street Journal warns that five major publishers could also get caught up in the saga. The DOJ is allegedly concerned about Apple’s agency book-selling model.
Under the agency model, publishers can set ebook prices on their own, with Apple getting a 30% cut from each sale. This is in contrast to the wholesale model, used by sites such as Amazon, where it’s the retailers who choose the price. As traditional publishers continue to try to work out how best to make money from the ebook market, many are embracing the agency model because they believe they can get better returns per sale.
It remains to be seen whether a settlement can be reached, but consumers could find that ebook prices for books from major publishers start to drop at certain sites. For publishers, this is an important fight because many believe that the wholesale model undervalues their products and leads consumers to expect cheaper ebooks.