Skirmishes between Amazon and Apple

Books, ebooks, publishing, retail

For those who do not know what this is about: Apple and some of the Big Five Publishers were accused of fixing prices to counteract Amazon’s monopoly in e-book pricing. The publishers and Apple agreed to use what’s called the agency model, where publishers set the price of ebooks and Apple takes a 30 percent cut, rather than a wholesale model where the publishers sell titles at a discount and the bookstore adds their margin on top deciding the final price without input from the publishers. The agency model isn’t illegal; the accusation is one of ebook price-fixing, which Apple and the publishers deny. The court decided that antitrust laws should apply.

This is just one of the recent skirmishes caused by Amazon’s hegemony and the big publishers. Jeff Bezos’s online empire, in its annual contracts with the Big Five Publishers (HarperCollins, Penguin Random House, Hachette, Simon & Schuster and Macmillan) increased the co-op promotional fees, seen by these as an illegal gouge by another name (in some cases, Amazon has raised promotional fees by 30 times their 2011 cost). In 2012, some of them did not sign the contracts and while the Independent Publishers Group had seen its titles removed from the site, others experienced the threat of a missing “buy” button and no promotion whatsoever.

The book trade is rarely seen as the site for big corporate clashes, but the mergings in the past 20 years or so brought very close accumulations of capital and interests that are not at all innocent and passive. The book trade is full of sharks and sharp teeth.