Amazon/Hachette dispute unlikely to provoke regulators, experts say

WASHINGTON Fri May 30, 2014 5:35am IST

A zoomed illustration image of a man looking at a computer monitor showing the logo of Amazon is seen in Vienna November 26, 2012. REUTERS/Leonhard Foeger/Files

A zoomed illustration image of a man looking at a computer monitor showing the logo of Amazon is seen in Vienna November 26, 2012.

Credit: Reuters/Leonhard Foeger/Files

Related Topics

Stocks

   

WASHINGTON (Reuters) - The U.S. government's unwillingness to stop Amazon.com from using hardball tactics in fights with book publishers has angered book lovers but antitrust experts say regulators are unlikely to intervene in what appear to be business disputes.

Amazon has delayed the delivery of some Hachette Book Group titles and even removed an option to pre-order "The Silkworm," by Harry Potter author J.K. Rowling writing as Robert Galbraith. Hachette, the fourth largest U.S. book publisher, is owned by France's Lagadere SCA.

The companies have not detailed the dispute but several media reports indicate it is over the pricing of e-books. Neither immediately responded to requests for comment.

Some Amazon customers have gone public about their decision to buy books elsewhere. Advocates for authors and publishers use words like "bullying" and "thuggish," and pine for government intervention.

But the Hachette dispute as currently understood is a fairly typical fight between a retailer and a supplier, antitrust experts said.

In fact, Amazon removed Macmillan Publishers from its book lists in 2010 during a similar spat. Advocates for publishers and authors had meetings with the U.S. Justice Department in 2011, which examined their complaints.

"The department did not take lightly the concerns expressed about Amazon (but) they didn't find an antitrust violation," said a person who was at the department then and who spoke on background to protect business relationships.

"The publishers squeeze the authors as much as they can for as big of a take as possible. And Amazon squeezes publishers as much as they can for as big of a take as possible," the person said.

Attorney Allen Grunes, veteran of the Justice Department now at Geyer Gorey LLP, said the Amazon-Hachette fight is a standard-issue business battle.

"Yes, they're (Amazon) big but this sort of thing is not the basis for a monopolization investigation," he said.

There are ways that Amazon could run into antitrust trouble - for example, if it conspired with publishers to set prices, as the Justice Department accused Apple and five major publishers, including Hachette, of doing in 2012.

Or it could push down the prices it pays suppliers so far to be accused of monopsony, said Chris Sagers, law professor at the Cleveland-Marshall College of Law.

A monopsony is a dynamic where many sellers have only one buyer, who can beat the sellers down on price.

"But to show monopsony, you have to show that the suppliers are forced to sell their products at such a loss that we see a reduction in the supply of books for consumers," Sagers said, noting the high markup on hardcover books indicated that monopsony was likely not occurring.

Hardcover fiction best-sellers typically sell for at least $15 on Amazon.com. It has competition from other online sellers as well as brick-and-mortar bookstores.

(Reporting by Diane Bartz, editing by Ros Krasny and Andrew Hay)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Smartphone Wars

Reuters Showcase

Cloud Solutions

Cloud Solutions

Tencent teams up with IBM to offer business software over the cloud.  Full Article 

Cook Comes Out

Cook Comes Out

Apple's Cook: "I'm proud to be gay".  Full Article | Related Story 

 Rubin Quits

Rubin Quits

Android co-founder Andy Rubin to leave Google.  Full Article 

Glowing Flower

Glowing Flower

Video: Genetically altered glowing flower on display in Tokyo.  Video 

Web Fast Lanes

Web Fast Lanes

Comcast, AT&T seek to reassure on no plans for Internet 'fast lanes'.  Full Article 

Tech Reshuffle

Tech Reshuffle

Twitter product chief sidelined as user engagement slides.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage