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Amazon stand-off continues

14 July 2008

The stand-off between the Internet retailing giant, Amazon, and the biggest trade (general) publisher in the UK, Hachette, is continuing. It's a full seven weeks since News Review looked at Amazon's massive growth and huge ambitions (News Review 26 May) but in all this time, to the amazement of observers, Hachette titles appearing on Amazon's pages have continued to have the 'buy' buttons removed. This has effectively frozen the publisher's sales through the online retailer.

The details are not public, but the dispute between the two parties relates to a terms negotiation. Amazon has demanded an improvement in its no doubt already generous discounts on books bought from the Hachette group publishers, and the publisher has refused to concede this. It is significant that Hachette is the biggest, as a rather smaller publisher, Bloomsbury, seems to have conceded when the same tactic was tried on them. No one knows what negotiations may be going on behind the scenes with other publishers, but this has now become a test case.

Other publishers and agents are supporting Hachette's stance. Philippa Milnes-Smith, President of the Association of Authors' AgentsThe association of UK agents. Their website ( gives a Directory of Members and a code of practice, but no information about the agencies other than their names. The association refers visitors to the UK agent listings from The Writers' & Artists' Yearbook on the WritersServices site., said: 'We understand the pressure being brought to bear on publishers by retailers, and it's good to see someone standing up to them'.

Authors lose out when big discounts are given to retailers because the high discount clause in their contracts is invoked. This means that they receive a lower royalty on these sales, and thus less income overall. In a market where trade discounts have become higher and higher, a large proportion of a big author's sales may be at a high discount through Amazon, the supermarkets and the bookshop chains, so the effect on authors can be substantial.

Hachette authors, of course, are currently losing out in a very specific way, in that their books are not being sold by Amazon. There is also a question of whether this is any kind of restraint of trade, although presumably the Hachette lawyers will already have dismissed this possibility. No doubt the publisher realises that it is hard to have an ongoing business relationship with your customers if you start taking them to court.

With the widespread view in the book trade that Amazon are set to launch the Kindle e-reader in the UK and the rest of the world this autumn, there is growing anxiety about the Internet retailer's other plans. Amazon CEO Jeff Bezos says that their results on selling e-books for the Kindle in the US show that those who buy the downloads continue also to buy as many traditional books as they did before. For many publishers, that is reassuring as regards the future of the traditional book - but not at all confidence-building in relation to Amazon itself.

E-book downloads look like another area the Internet giant will dominate, as it continues its plans to become the biggest online retailer. Books were only the beginning of this plan, but they remain an area in which Amazon looks set to continue its dominance.