Sheehan & Associates, P.L.C.

Battle between Amazon and Hachette heats up

In March, Hachette Book Group's contract expired with the $122 billion retailer, Amazon. Amazon's position was that it wanted to extend the contract but on different terms. Included in those terms was one that required the $10 billion publisher to price its e-books lower. Amazon's aim is to have most e-books, popular with readers in Michigan and around the country, priced at $9.99. Hachette did not agree, so it simply failed to respond to the contract's proposed negotiation and extension.

In response, Amazon kept the terms of their contract intact and extended it. In April, it started advising customers that pre-ordering of many Hachette books would no longer be available. It also stated that it could take several weeks to deliver Hachette books due to availability of print inventory. As a result, sales of the publisher's books have declined. Some authors have come out against Hachette, while others have formed an alliance that is accusing the giant retailer of creating an intentional hindrance to Hachette's book sales and therefore also doing damage to the authors' livelihoods.

Amazon sent a letter to a number of Hachette authors in June, recommending that 100 percent of e-book profits be paid to the authors during the term of the dispute. Hachette alleges that such a deal would be financial suicide for it as a publisher, according to an interview with the Wall Street Journal. It wants to control its own pricing while Amazon wants to level the playing field and keep most e-books at the same low price.

Disputes over contracts happen every day in the business world, whether between large or small entities. When they do, a business and commercial lawyer that deals on a regular basis in contract disputes could help an involved client in seeking a resolution.

Source: Business Insider, "How Amazon's Ugly Fight With A Publisher Actually Started ", Natasha Bertrand, October 07, 2014

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