The quote is on its face silly. The author of the article got mixed up. Publishers set a retail list price of $14.99. Of course Amazon doesn't pay retail list

The quote is on its face silly. The author of the article got mixed up. Publishers set a retail list price of $14.99. Of course Amazon doesn't pay retail list price for books it sells - it pays wholesale. (As do other retailers including Apple and Google) Amazon pays more like $7.50 for the book and then offered a discounted consumer price of $9.99. This was not selling below cost. It was aggressive discounting which is a common feature in retail markets. Discounting is an especially good retailer strategy with overpriced ebooks. A retailer only pays list price for an ebook after it receives payment from the consumer, so the optimal price for a product like this is the one that generates the most gross profit basically (sales times margin). Amazon optimized. Apple and Google could certainly follow suit, and in fact, Google also aggressively discounted ebooks like Amazon during the time period in question. Apple's strategy seems to be to keep prices and margins very high on all products it sells, in my view, because most of those products are physical things that do have marginal cost. In any event, it is completely unreasonable to say, publishers were concerned about Apple and Google losing money, because publishers knew that Amazon was making money on each sale, not losing money. Publishers wanted to keep retail prices high out of a short-sighted belief that this would protect print book sales and that it would keep their own margins high. They're now paying the price in lost sales, and it's their own outrageous pricing that's the problem.