E-book revolution: The danger of the lawsuit against Apple

This month, the Department of Justice brought an antitrust lawsuit against Apple along with many book publishers, alleging price fixing in order to combat Amazon’s successful strategy of dramatically reducing e-book prices. While this may seem like a fantastic gain for consumers given Amazon’s history of lower prices, it is a very dangerous precedent to set as, other than Apple and Amazon, the only other effective competitor in the e-book market is Barnes & Noble. Although it is unlikely, this lawsuit may force Apple out of the e-book market. In that case, the federal government may in fact be creating exactly what it seeks to prevent: a monopoly. Although Barnes & Noble’s Nook e-reader is seen as a contender to Amazon’s Kindle and Apple’s iPad, Barnes & Noble’s physical book business and retail stores realistically prevents it from competing as efficiently as its competitors. Put simply, should the federal government remove Apple from the e-book market, it may be handing Amazon a monopoly.

As students, we generally consume far more books than the average individual because textbooks are required for classes. In the long term, e-books will largely replace physical books because they are usable across multiple platforms, and are more portable. With Apple potentially vacating the e-book business, Amazon will be left as the largest e-book distributor by far. Should this happen, Amazon, which already controls nearly 60 percent of all e-book sales, would be given such a large market share that it would essentially be able to set prices as it chooses. Previously, Amazon had only lowered prices as a motivation for consumers to purchase e-books over printed books. Since Apple unveiled its Books store, the e-book market has exploded. Over time, profit motives and straightforward economic principles will inevitably drive Amazon to raise prices as long as consumers will continue to purchase e-books.

I doubt it will ever get that far. Apple will likely not be forced out of the e-book market and will simply settle with the federal government. Should that happen, the government’s lawsuit will be a boon for consumers, once again allowing competition to force prices down. In that regard, this lawsuit will be key in determining the future of electronic print media. Generally, it is a move in the right direction, against uncompetitive practices. While this lawsuit is completely necessary, I would also caution the prosecutors in this case about becoming overzealous; it may do far more harm than good in the long term. Either way, the transition from the printed page to electronic media will completely revolutionize how the written word is consumed. This lawsuit has the potential to define who will sell e-books for the foreseeable future and how much they will cost.