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The Amazon vs. Apple digital book pricing war wages on as Amazon halts sales of certain electronic titles from publishers Penguin and Hachette.

The war began shortly after the iPad was first announced, when Amazon halted sales of Macmillan books in response to collapsed pricing negotiations. Whereas Amazon had previously dealt with publishers under a “retail model” — capping digital book prices at $9.99 — Apple reportedly wanted to allow book sellers to set their own eBook prices under an agency model — similar to what they already do for their iPhone and iPod touch app developers.

This set off a chain reaction. Major publishers put pressure on Amazon to renegotiate under an agency model deal. Apparently CBS-owned Simon & Schuster and News Corp-owned Harper Collins were able to negotiate deals successfully, but in light of still up-in-the-air talks with Penguin and Hachette, Amazon has decided to play hardball by stopping the sales of some of their titles. In the case of Penguin, older eBooks will still be available but no new ones will be offered just yet.

The buy button has been removed from Hachette eBooks completely, although Amazon promises that’s temporary. At the eleventh hour, an agreement was reached with Hachette over eBook pricing on agency terms, but the online book retailer says they cannot be “operationally ready” to sell the publisher’s books under those terms. Sales should be restored by April 3, but until then consumers will have to sit tight while publishers duke it out with Amazon.

How do you think this will play out? Will Amazon have to capitulate to agency terms for most or all of its publishers after Apple swooped in with new terms for the iBook Store?

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Tags: amazon, amazon pricing war, apple, books, digital books, ebooks, ipad, publishers