Amazon.com (AMZN) is slashing e-book prices just as publishers are facing a federal probe into price fixing, a move that is great news for voracious readers, though it places the content creators in a tough spot.

As The New York Times pointed out, Amazon plans to cut prices of some electronic best-sellers from $14.99 to $9.99. The Justice Department and 16 state attorneys general on Wednesday claimed that the late Apple (APPL) CEO Steve Jobs conspired with executives in the publishing industry to fix e-book prices. According to media reports, the scheme was allegedly hatched in response to a move by Amazon in 2009 and was effective a year later with the launch of the iPad to charge $9.99 for e-books. The irony is striking.

"Apple proudly described the price-fixing plan -- which gave the iPad maker a guaranteed 30% commission on each e-book it sold through its online marketplace -- as an 'aikido move,' referring to the Japanese martial art," according to the Los Angeles Times.

Apple, which has more cash than the federal government, can settle this case quickly without breaking a sweat. The publishers, however, are not so lucky. Last year, sales of e-books surpassed those of printed books for the first time, according to Amazon.com. That trend continues. According to the Association of American Publishers, sales of adult e-books topped $99 million in January, an increase of 49.4% from a year earlier. That's the biggest gain in the category. Children's and young adult e-book sales and religious e-book sales both posted triple-digit gains.

Executives at News Corp.'s (NWS) Random House; CBS' (CBS) Simon & Schuster Inc.; 
Hachette Book Group, part of the European conglomerate Hachette Livre; Macmillan, which is controlled by the German company Holtzbrinck; and Penguin Group, owned by the U.K.'s Pearson, have to be sweating bullets. If they complain about Amazon's price cuts, government lawyers could use that information to bolster the case that they were in cahoots to fix prices. The best they can do is grumble that they can't support their businesses under Amazon's pricing structure, a similar argument that the music industry raised about Apple's iTunes site charging 99 cents a song.

Eventually, Apple agreed to a tiered pricing structure whereby current hit songs cost more than obscure oldies. The music industry seems content with that arrangement, which took years to create. Amazon, though, is under no immediate pressure to establish a similar arrangement with the book publishers. Industry executives allegedly thought that by working together with Apple they would counter Amazon's growing clout. Unfortunately, that foolish decision has made Amazon even more powerful and will wind up costing publishers big money.

Jonathan Berr does not own shares of the companies listed here.