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Amazon Holding Another Publisher Hostage? – 2014

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Amazon has begun discouraging customers from buying some books published by Hachette, according to a New York Times article which broke earlier this month (May 8, 2914) . The retailer, which controls more than a third of the U.S. book trade, is apparently delaying shipments of Hachette’s books to customers by up to five weeks. When the Times asked a Hachette spokeswoman was asked why Amazon would delay the deliveries, she replied, “for reasons of their own.”

On Thursday, May 15, the 400-member Association of Authors Representatives (AAR), issued a letter to Amazon saying it “deplores any attempt by any party that would seek to injure and punish innocent authors—and their innocent readers—in order to pursue its position in a business dispute.”  The letter, signed by AAR president Gail Hochman and the organization’s board,  went on to say “We believe that such actions are analogous to hostage-taking to extort concessions, and are just as indefensible.” 

Amazon has a reputation for intimidating publishers in order to get the business terms they want. In 2010 Amazon pulled all the “buy” buttons for Macmillan books in a pricing dispute. Two years later Amazon angled for a higher discount with a distributor, Independent Publishers Group, and when IPG refused, Amazon immediately removed more than 4,000 IPG e-books form its site. After quiet negotiations by the parties, the books were restored.  

Even more troubling were Amazon’s allegations of e-book price-fixing against five major publishers (including Hachette), and a subsequent lawsuit brought by the Department of Justice. Many decried the charges as trumped up for the retailer’s own gain. But in December 2013, a federal court approved legal settlements by publishers Hachette, HarperCollins, Simon & Schuster, Macmillan, and Penguin in antitrust lawsuits filed by State Attorneys General and Class Plaintiffs. Those settlements resulted in publishers having to hand out credits for qualifying Kindle books purchased between April 1, 2010 and May 21, 2012. The ultimate result was not only a reduction in the price of e-books (hailed as a great thing for consumers), but a disastrous reduction in royalty payments for many small and mid-list authors, which has rarely been mentioned in the press.