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Publishers' worst nightmare: Amazon again on discount warpath

Amazon back to discounting e-books from HarperCollins following publisher's accord with DOJ settling collusion allegations.

Sarah Tew/CNET
Last week, HarperCollins, Hachette, and Simon & Schuster cut a deal with the government to settle allegations that the book publishers had colluded with Apple to fix the price of e-books. If you believe the government's charges, the book publishers were trying to prevent Amazon from discounting them to death.

Now it's back to the future. Earlier today came word that Amazon had returned to form, discounting HarperCollins e-books titles.

"We are happy to again be lowering prices on a broad assortment of HarperCollins titles," Amazon spokeswoman Sarah Gelman said in an e-mailed comment to CNET.

Earlier this year, the Justice Department said it was planning action against Apple and e-book publishers over instituting the so-called "agency model," allowing publishers to set the price on their titles. The move resulted in higher e-book pricing and quickly caught the attention of law-enforcement officials. Prior to the institution of the agency model, Amazon was selling e-books much closer to their wholesale price. In its complaint, the DOJ alleged that the publishers feared that Amazon's pricing strategy would drive out competition and hand control of the e-book market to Amazon.

Apple co-founder Steve Jobs might have inadvertently called more attention to the agency model by telling his biographer Walter Isaacson last year that he offered the agency model -- and subsequent higher pricing -- to publishers.

"We told the publishers, 'We'll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that's what you want anyway," Jobs told his biographer. "They went to Amazon and said, 'You're going to sign an agency contract or we're not going to give you the books.'"

Lagardere SCA's Hachette Book Group, News Corp.'s HarperCollins Publishers, and Simon & Schuster (owned by CBS, which publishes CNET) agreed to settle charges in the antitrust lawsuit that ultimately got filed against Apple, Macmillan Publishers (owned by Germany's Verlagsgruppe Georg von Holtzbrinck holding company), and Pearson PLC's Penguin.

Jane Litte, who operates the romance blog Dear Author, was first to notice Amazon's return to discounting on HarperCollins e-titles. Hat tip to PaidContent for pointing this out.