Amazon.com (AMZN) Capitulates To Macmillan's Demands for Higher e-Book Prices

Amazon.com Inc. (NASDAQ: AMZN) has agreed to sell the electronic books from publishing giant Macmillan at prices it considers too high.

Books from the publisher such as Andrew Young's "The Politician," and Hilary Mantel's "Wolf Man" were unavailable by the online retailer due to the new pricing model for e-books from Macmillan.

Macmillan, along with other publisher has scrutinized Amazon for charging just $9.99 for the best-selling books on the Kindle e-reader. Amazon has reduced prices in order to maintain its dominant position in the market for e-books as competition from Barnes & Noble Inc. (NYSE: BKS), Sony Corp. (NYSE: SNE) and Apple Inc. NASDAQ: AAPL) looms.

Publishing companies such as Macmillan want more of a return on the sales of e-books as the emerging industry is set to hurt the demand for more expensive hardcover books. Some publishing companies have said they may start delaying the release of e-books to protect the sales of hardcover versions in the future.

Amazon reached out to its customers to express its disagreement with the decision by Macmillan to raise prices in a posting on the company's Kindle Forum.

"We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books," the Amazon post said.

The new price model from the publisher will have its e-books priced at $12.99 to $14.99.

Shares of Amazon are down 1.6 percent in premarket movement on Monday to $123.40.

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