THE ADVENT OF THE APPLE iPAD and Apple’s iBookstore for the sale of electronic books earlier this year spurred a transformation in the relationships between publishers of “e-books” and other digital content and retailers who sell content to consumers for use on various electronic devices. According to news reports, in advance of the iPad’s launch, instead of the traditional wholesale distribution model in which publishers sold their print products to bookstores and other outlets and relinquished control over the retail prices charged to consumers, Apple negotiated agreements employing an “agency model” that permits publishers to set the retail prices of their products (albeit within pre-determined ranges), but charges them a commission for placement in the iBookstore. Apparently perceiving an opportunity to curb
what they believed to be the under-pricing of e-books, many publishers reportedly tried to leverage Apple’s initiative to persuade other online retailers, particularly Amazon, to switch over to the agency model.

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