That smile on the Amazon logo may keep getting larger, as experts say the big winner in the U.S. governments antitrust victory over Apple is the online retailer, who will now be able to price e-books at whatever price it wishes to.
While Amazon is already the e-book market leader, the company will be able to continue its aggressive pricing strategy to gain further market share, market watchers who spoke with Bloomberg said. Some even believe the ruling could affect Apple in areas other than the e-book market.
“Any Financial penalty is pocket change for Apple, but this decision can have a long-term effect,” said David Balto, former policy director for the U.S. Federal Trade Commission. “The government can extend this beyond books.”
“Amazon emerges as the winner from all of the activity related to e-book pricing,” said Tom Forte, an analyst at Telsey Advisory Group in New York. “The company seems to be free to price the way it wants to, which, by Amazon’s standards, is aggressively to gain market share.”
The ruling, by U.S. District Judge Denise Cote, said Apple used agreements with publishers to fix prices of e-books. Those deals forced Amazon to raise prices on some books, and the verdict now gives Amazon leverage to negotiate pricing with publishers.
Amazon gains leeway in an industry that already accounts for a significant portion of its revenue. The online retailer began selling e-books in 2007, now four years later, e-book numbers have surpassed print sales.
Amazon has been smart to align itself with antitrust laws that seek to protect consumers from price-gouging, making it’s sales model difficult to contest.
“Competitive practices are for the benefit of the consumer,” Dan Kurnos, an analyst at Benchmark Co. said in an interview. “When was the last time you saw someone get in significant trouble for cutting prices too severely?”
