Amazon, which enjoys a 60 percent share of e-book sales, and Hachette, which earns over a third of its sales from e-books, remain stalemated over e-book pricing.
As a result, Amazon has placed numerous shipping delays on many Hachette titles, and taken away the ability to pre-order certain Hachette Book Group books.
Amazon noted in a statement on May 27 that it is buying less print inventory and "safety stock" from Hachette Book Group, and that customers can order new titles when their publication dates arrive.
Amazon also states customers can still order out-of-stock Hachette titles, but delivery will be dependent on when Hachette ships the title to Amazon.
Aside from the obvious impact on the consumer, Hachette authors are negatively affected by this corporate skirmish as royalties wither away due to the sales logjam.
To that end, Amazon is proposing to fund 50 percent of an author royalty pool, suggesting that Hachette kick in the remaining 50 percent to ease the burden on authors during the impasse. Hachette just announced that they cannot participate in this pool until an agreement with Amazon has been reached on all issues.
Hachette author James Patterson, expressing frustration over the lost author revenue, said "What I don't understand about this particular battle tactic is how it is in the best interest of Amazon customers. It certainly doesn't appear to be in the best interest of authors."
Many observers feel that this dispute is a reaction to the U.S. Department of Justice lawsuit in 2012 against Apple and five other publishers, including Hachette, for alleged price fixing. A federal judge then ruled against Apple, which was just about to launch its iBookstore.
At the root of the lawsuit was the conflict between whether Amazon and other sellers or book publishers had the right to establish pricing. The so-called "agency model" allowed publishers to set prices, which suppressed Amazon's ability to discount books.
Book publishers see this struggle as an attempt by Amazon to break the agency model.
Andrew Albanese of Publishers Weekly said, "One likely reason for the current timing of the dispute is that when the publishers' consent decrees in the e-book price-fixing case begin to expire this fall (2014), so too will Amazon's ability to discount e-books. It is fair to say that Amazon officials likely see the current negotiations as their best chance to push for the end of agency pricing for e-books."
Amazon sees it as an exercise of its free-market rights, noting that like any other online and brick-and-mortar bookseller, Amazon can do business with any publisher that offers a program that works best for the seller.
