Apple, Amazon to be Probed for, Um, 'Probing' Competition

So, the Kindle Store and iBooks are going to save books, right? With writers and publishers getting paid and readers able to buy affordable ebooks, this brave new world is a dream in which we read our Kindles and iPads in verdant fields, surrounded by models playing harps made out of chocolate and everyone is happy…

Not so fast.

The Connecticut Attorney General say that not all is quite so rosy in our admittedly weird reading dream (seriously, what good is a ‘chocolate harp’?). Instead, the state’s AG is saying that Amazon and Apple are working to prevent other suppliers from getting as good a deal as they are.

Called the “most favored nations” practice, the AG is suggesting that the two A’s of reading have signed deals with publishers that prevent other booksellers from getting a lower deal.

That may seem like a great contract for Apple and Amazon ’cause, well, it is. But it also means Barnes & Noble, Sony, Kobo and others can’t get the best deal on ebooks even if they slipped a twenty or two under the table. And most people would agree – when giant players are always getting the best deal (a la Walmart), that’s generally considered anti-competitive. Hence the probe.

So far, no response has come out of Apple, Amazon or any of the publishers.

[As reported by Reuters]

Written by Navneet Alang

Navneet Alang is a technology-culture writer based in Toronto. You can find him on Twitter at @navalang
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2 Comments »

 
#1
Jake Butterford
August 2nd, 2010 at 8:11 pm

I really hope this isn’t true but wouldn’t be surprised if it is. Hopefully the CT AG gets to the bottom of this so consumers can come out winners.

 
 
#2
Chris
August 6th, 2010 at 2:13 pm

I am unsure about the legality of it all but every Fortune 500 company I worked at had these clauses inserted into their contracts. This is actually a normal clause when selling to the US government as well. Suppliers get around them by adjusting “rebates”, “marketing help” and other kickbacks that is usually dependent on volume or relationship.

 

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