Amazon agrees to higher prices in e-book dispute

Amazon said Sunday that, while it still believes a $14.99 price tag for e-books is "needlessly high," it will have to give in to Macmillan's demands to sell electronic versions of its books at a higher rate than Amazon's usual $9.99.

The announcement comes after Amazon temporarily pulled Macmillan books from its Web site in a dispute over e-book pricing. Macmillan and other book publishers have asked Amazon to increase the sales price of e-books on its Web site. But Amazon stood firm in its contention that anything above $9.99 was too high--that is until now.

"We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles," Amazon's statement read. "We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books."

Macmillan books will eventually return to Amazon's sites. And Amazon will charge between $12.99 and $14.99 for electronic versions of bestsellers and most hardcover releases. No time frame was given for the change, but on Sunday afternoon, top sellers from Macmillan--including Jeffrey Eugenides' "Middlesex," Ishmael Beah's "A Long Way Gone," and Michael Chabon's "The Amazing Adventures of Kavalier & Clay"--were still only available from third parties via Amazon's Web site and could not be bought from Amazon directly.

Amazon's statement hints at the precarious position it is in. On one hand, it wants to be known by consumers as a low-cost e-book distributor. On the other hand, if it can't work out deals with all of the major book publishers, it risks being able to offer customers only a limited selection of titles.

Now, as Amazon said in its announcement, "Amazon customers will...decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book."