U.S. Senator Charles Schumer is asking the U.S. Justice Department to drop their anti-trust lawsuit against Apple and e-book publishers around price fixing allegations. He believes that the lawsuit may encourage Amazon.com to increase their grip on the e-book industry.
Schumer wrote his opinion as a guest article in The Wall Street Journal. Schumer said that ?the suit will restore Amazon to the dominant position atop the e-books market it occupied for years before competition arrived in the form of Apple?. And if that happens, he warns, ?consumers will be forced to accept whatever prices Amazon sets.”
“I am concerned that the mere filing of this lawsuit has empowered monopolists and hurt innovators. I believe it will have a deterrent effect not only on publishers but on other industries that are coming up with creative ways to grow and adapt to the Internet,” he added.
He argued that Apple’s agency model allows publishers to pick whatever price they want, but keeps 30% of the proceeds to itself. Amazon.com’s wholesale model encourages the e-book industry to accept Amazon’s terms. Apple did not invent the agency model and they are not the only retailer that uses this model.