Feeds

Publishers put a gun to our heads on ebook pricing, squeals Amazon

Wanted to damp down our Kindle-ing dominance

Security for virtualized datacentres

A top Amazon executive has said that publishers gave the etailer an "ultimatum" to let them set the price customers would be charged for ebooks.

Testifying at the fruity firm's trial for price-fixing, Russell Grandinetti, veep for Kindle content, said that if Amazon had the choice it would still be on the old wholesale model of pricing under which it bought books from publishers and then sold at any price it liked - even if this was less than it had paid.

"Certainly if someone offered reseller, we would have taken them up on that offer," he said in testimony reported by Reuters, the Wall Street Journal and others.

Macmillan was the first to go to Amazon about changing to the agency model, where retailers took a cut from a price set by publishers. Graninetti said the first meeting was "tense" and Amazon ended up taking the company's books off its virtual shelves for a few days before later agreeing to a three-year deal to get 30 per cent of each sale.

"We wanted to avoid losing most or all of their titles from our store," he said.

Other publishers started following suit soon after, a situation that Amazon considered to be at least partly intended to "slow down the success of the Kindle".

The US government has accused five major publishers, also including Simon & Schuster, HarperCollins, Penguin and Hachette, and Apple of using the agency model to raise and then fix the price of ebooks - at a cost of millions to ordinary customers. The DoJ has said that it believes part of the motivation for the fix was to destroy the already substantial market domination Amazon had built up, particularly since it was selling at cost or below cost to encourage sales of its Kindle readers.

Amazon also pursued the most favoured nation clause that the Department of Justice has now forced publishers to pull from their contracts. The MFN clause stopped the book houses from offering better prices to other retailers, something Apple also insisted on, which left ebooks at a more or less uniform price for customers no matter where they were bought.

Grandinetti said that Amazon wanted the MFN clause because it didn't want to be "further discriminated against by these publishers".

The five publishers have all settled with the government, agreeing to financial penalties of $164m so far; and to tear up present contracts and restrict future contractual dealings. ®

Business security measures using SSL

More from The Register

next story
Hey, Scots. Microsoft's Bing thinks you'll vote NO to independence
World's top Google-finding website calls it for the UK
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.