November 14, 2014
Amazon and Hachette have finally resolved their ongoing public dispute, which began back in January. Hachette will now have the ability to set its own prices for e-books and print books, but will be offered incentives for selling at lower prices. Despite yesterday’s announcement, seen by most as a victory for Hachette (in the short term), Amazon still controls almost half of today’s book trade. In addition, the long-running dispute showed the industry that Amazon is not afraid to use its power to affect sales.
“Amazon has been cast as a bully in publications across the ideological spectrum, and a large group of authors is calling for it to be investigated on antitrust grounds,” reports The New York Times.
“Amazon’s supporters publicly questioned the need for Hachette, the fourth largest publisher, to exist in an era when authors can publish themselves digitally, an accusation Hachette was reluctant to respond to.”
The multiyear agreement is reportedly similar to a recent deal worked out between Amazon and Simon & Schuster, in which the publisher gained control over its pricing but will have incentives to sell at lower prices.
While neither side has yet to provide details of the new agreement, both Amazon and Hachette said they are satisfied.
“Hachette got Amazon to allow them to control pricing while also cutting the amount of money Amazon takes if the publisher does engage in discounts, which appears like a victory,” said Forrester analyst James McQuivey. “But in the end this all cements Amazon’s ultimate long-term role in this business, which will only put Hachette right back in this situation every time they are up for renegotiation.”
Yesterday’s announcement is not expected to discourage Authors United and the Authors Guild from requesting that the Authors Guild initiate an investigation of Amazon based on antitrust grounds.