With today's news that MacMillan has settled with the DOJ over its pricing investigation, the discussion about what exactly is going on with this industry is back on the front page (for limited values of "front page"--no doubt most people don't care at all).
One comment I've often seen is some variation on the idea that what the publishers and Apple were doing was taking power away from customers and handing it back to publishers.
Almost. It shifts power away from distributors back to the publishers. This, of course, is why the publishers signed on in the first place.
In neither the Amazon nor the Apple model is the customer the one with power. Amazon is using its weight to crush competing bookstores by purchasing books from publishers and then selling them at a loss in order to encourage people to invest in their store. Apple, on the other hand, tried to use its weight to stop Amazon, which actually would have eliminated the Amazon price advantage and made it possible for multiple bookstores to run digital versions, because they'd have to compete on things other than trying to match Amazon's negative margin.
The question is which is better for the customer, and is one or both illegal?
