In the latest round of the book pricing wars, Amazon.com has begun selling a number of new hardcover books published this month by Penguin for only $9.99 amid a dispute between the two companies over electronic books.
Penguin stopped providing digital editions of new titles to Amazon because Penguin and Amazon haven't yet struck an agreement on a new "agency" pricing model, in which publishers set the retail prices of their e-books. Out of the five major publishers that struck an agency-pricing deal with Apple, Penguin is the only one that hasn't yet reached an agreement with Amazon. Since Amazon can't sell the digital editions of Penguin's books, it is, in effect, showing its customers that Amazon is still the place to go for discount pricing. The low price also serves to put pressure on Penguin, as publishers passionately dislike the steep discounts. Many publishers say a $9.99 price tag on a new hardcover book cheapens the value in the minds of consumers. Cut Penguin's prices? More like slash it's throat.