Funny - can imagine the conversation now.....
DOJ - So Amazon, what seems to be the problem.
Amazon - Well, we used our tech savvyness to take a huge chunk of buisness away from the smaller bookstores, plus we're big enough to take the wholesale cut and we get given a load of the marketing budget for advertising the books on our website. Then we used our massive market share to force the publisers to take their and the author's cuts as a percentage and allow us to set the price, levaing us with about 70% in the end.
DOJ - Okay, interesting - do go on.
Amazon - So we saw the whole ebook thing coming a mile off, of course, clearly we wanted some of that - in fact we had no choice since the majority of the cost savings due to ebooks come in our part of the pipeline - if anyone else got their first they could massively undercut us - so we used our massive buying power over the publishers to force them into contracts where we set a flat rate price of $9.99, we still take 70%, they get roughly what they got before, less the money it would have cost them to print the books, they aren't allowed to sell the ebook elsewhere for less than we charge and what we sell is locked to hardware only we make. Of course the cool thing is we make a much bigger profit, because our costs are vastly lower and we own the new market due to the discounts!
DOJ - Err ok and the problem is?
Amazon - Didn't you read our press release? Apple come along and try to steal our market and because of that the publisers want to put the price up. Outrageous monopolistic pricing that is. So we decided to stand up for our poor customers by removing that publisers Ebooks and Paper books from sale.
DOJ - Actually we'd like to see the contract please.
Amazon - But we put everything in the press release, we're an honest small tech startup not like those nasty dinosaur publishing houses.
DOJ - But, you know, we should really double check.
Amazon - OK,OK you're cearly in their pockets and have been all along.
DOJ - Hmm it say here that the publisers get the right toset a raised price like you said, interesting - but wait - it also says the get the right to lower the price too. And they can sell ebooks elsewhere for less. Hmm and you're cuts gone down to 30% (plus what they give you for marketing and what you charge for the hardware). Hey Macmillan, what have you got to say for yourselves?
Macmillan - Didn't you read our press release? "The price will be set the price for each book individually. Our plan is to price the digital edition of most adult trade books in a price range from $14.99 to $5.99. At first release, concurrent with a hardcover, most titles will be priced between $14.99 and $12.99. E books will almost always appear day on date with the physical edition. Pricing will be dynamic over time."
DOJ - Amazon, i think you were right, someone was trying to misuse their market position, but it's ok now.
But we do agree on one thing - Murdoch is a clueless dinosaur - he can't even put this case across.....