Connecticut AG calls Amazon, Apple to woodshed over e-book deals

Looks like the Attorney General of Connecticut is ready to stir things up over what he calls “anticompetitive” deals between Apple, Amazon, and various prominent publishers on the e-book market. That state’s Richard Blumenthal says that he wants representatives from both on-line giants in his office ASAP to discuss what Blumenthal calls their “most favored nation” arrangements with big book companies like Macmillan and Simon & Schuster.

The crux of the MFN concept is that a given product maker must offer a given distributor the lowest price it’s offering anyone. If a competing distributor gets a price break, they get it too.

“The net effect is fairly obvious,” Blumenthal warned in his letter to Amazon, “in that MFNs will reduce the publisher’s incentive to offer a discount to Amazon if it would have to offer the same discount to Apple, leading to the establishment of a price floor for e-books offered by the publisher.”

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