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Amazon, Apple probed for e-book price fixing

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New York City The attorney general for the state of Connecticut said Monday that in the e-book price wars, Apple and Amazon might have an unfair advantage.

According to a report by CNNMoney.com, Attorney General Richard Blumenthal has announced an investigation of both Apple’s and Amazon’s contracts with book publishers.

Blumenthal sent letters to each company requesting that their attorneys schedule a meeting with his office to discuss their deals with five of the country’s largest e-book publishers: Macmillan, Simon & Schuster, Hachette, HarperCollins and Penguin.

Both Amazon and Apple have agreements with those publishers that ensure they'll receive the best prices for e-books over any of their competitors, Blumenthal said.

Those agreements -- coined "most favored nation" clauses -- block the publishers from offering deeper discounts to competitors than they do to Amazon and Apple. While such deals aren't straight-out illegal under antitrust laws, they're also not always legal either, Blumenthal said in his letters to the companies.

"The concerns are compounded, and hence potentially more troublesome, since this arrangement appears to be something that will be agreed to by the largest e-book publishers in the United States and two competitors who combined will likely command the greatest retail e-book share," Blumenthal wrote.

To Apple, he added: "If recent history is a predictor of future results, I fully expect that Apple's iPad tablet will soon attract (if it has not already) an important share of the e-reading device market."

According to the report, Blumenthal said his office surveyed e-book prices for several bestsellers offered by Amazon and Apple, as well as competitors Borders Group and Barnes & Noble, and found prices were identical across all four companies.