The end result of the Department of Justice's anti-trust law suit against five major publishers for what amounts to price fixing will be, at least in the short run, lower prices on e-books for customers. As soon as the suit was announced, Amazon.com stated they would push down the prices on e-books they sell.

A few years ago when Amazon was trying to assure its place as controller of the e-book market, especially by dominating the e-book reader market with its Kindle, the giant internet retailer assigned very low prices, usually $9.99, for almost all new and best-selling e-books it was offering, regardless of the publisher's price. In almost all instances, Amazon was selling these e-books at a loss in order to maintain its tight grip on the market for both e-readers and e-books. Publishers and authors, fearful of both the monopolistic aspects of this move and the manipulation of prices which, to their thinking, were too low for publishers to sustain, were very concerned about what they saw as dangerous precedents being set.

Five major publishers (Hachette, Simon & Schuster, HarperCollins, Macmillan and Penguin) got together with Apple's Steve Jobs, who at the time was getting reading to launch the first iPad, and colluded in creating what they called the agency model for e-book pricing. Under this model, the publishers set the book price and the retailer retained 30 percent. E-book prices rose from $9.99 to $14.99 and $16.99 almost immediately because part of the agency model agreement stated that no retailer could sell the e-books for a lower price than the agency model price publishers had agreed upon with Apple (as a most favored distributor). Of course, this was considered by Amazon and the government to be price fixing and restraint of trade, and the suit was under way.

Prior to the entry of Apple into the e-reader market through the launch of the iPad, Amazon.com controlled 90 percent of the e-reader market. Today that percentage has decreased to 60 percent. But with Amazon's plan to lower prices, the retailer may once again take control of a greater share of the e-reader and e-book market.

Three of the publishers sued have reached a settlement with the Department of Justice and have abandoned the agency model. But two have not - Macmillan and Penguin. One in particular, Macmillan, made a statement to the effect that it cannot agree to the terms of the settlement because it would, in fact, put Amazon back in the position of having a monopolistic hold on the e-book market, which was the reason the publishers felt forced to create the agency model in the first place.

It is ironic that a monopolistic strategy created a climate in which, in reaction, a price-fixing strategy emerged, only to be struck down as illegal, making way for the monopolistic model to come back into dominance. In my opinion, monopolies are never good for authors or, in the long run, for customers. But in the short run, e-book prices will come down which may be good for sales. Stay tuned for further developments in the ongoing battle between Amazon and traditional publishers.