There is a great statement from the Authors Guild that analyzes the failed efforts by Amazon.com to create a monopoly on the sale of e-books. Last year, when Amazon had about 90% of the market share of e-books, they were routinely selling them below cost for $9.99. Five of the six largest publishers (Random House is still holding out) made deals with Apple to adopt a new “agency” model whereby the publisher would set the price on the e-book and offer each retailer a 30% commission on sales. This restricted Amazon from engaging in ruinous price competition in order to drive competition out of the e-book business. Today Barnes and Noble, Google, Apple, and independent stores are gaining market share. The strangle hold of Amazon is being attenuated. Check out this analysis by the Authors Guild. It is the best statement I have seen explaining the history and the impact of these important developments.
Authors Guild Analysis of Amazon’s Failed Attempt to Control the E-book Market