I am an economist, remember? The price of eBooks is, like every product, determined by what people are wiling to pay.
Willing buyers, wiling sellers. Number of eBooks sales had doubled in the two years between Apple entering the market and the price going up. It's more than ten times the size today than what it was then. Absolute proof that market forces are satisfied with the market prices of eBooks. The average eBook pricing has slowly adjusted downward as competition has adjusted what the market will bear.
I am also a businessman, a retired CEO, remember?
When a 90% monopolist with huge resources is selling a product BELOW the wholesale price, it is always an artificial price that no one else can match to be able to meet and make a profit in competition. It's a price that is set bearing no relation to cost, demand, market realities, or the laws of economics. It is unsustainable on its own, except being supported by the revenues from other sources.
There is no rational reason in the world for a business to sell something at 50-60% of the price the business has paid for it, day-in-and-day-out, unless there is some advantage to be had. You cannot justify it by saying you are going to make the loss up selling some other product customers are brought to the store and attracted to buy at full value but that can't be explained for Amazon when those are ALSO drastically discounted, and you'd have to sell ten to twenty times the number of non-Best Sellers and non-A-list books at their average markups to make up for the sales of the below market price "loss leaders" as claimed. Nor can you claim you are doing it to sell a device you are selling at COST, intending to make it up with sales of the CONTENT, which you are selling at a LOSS. None of that makes any rational economic sense. The argument Amazon is making is a circle jerk smoke screen and mirrors intended to fool low information people like you to give them cover for what they are actually doing.
The only logical thing left is impermissible, illegal anti-competitive behavior: predatory pricing to keep any potential competitors from entering the eBook, and eBook reader markets. When it didn't work, and Apple entered the market and broke their shell game, Amazon went squealing to the DOJ, crying and weeping to the government mommy, whining that "Big old Apple kicked over my nice monopoly! Punish them for being so mean!"
“Number of eBooks sales had doubled in the two years between Apple entering the market and the price going up.”
Between! There was no between. Prices went up at the same time Apple entered the market.
“The only logical thing left is impermissible, illegal anti-competitive behavior: predatory pricing to keep any potential competitors from entering the eBook, and eBook reader markets. “
Or, Amazon saw an opportunity to sell to customers a product at a lower price than the publisher cartels wanted to sell at. Amazon broke the publishers’ cartel and lowered prices to the consumer.