Amazon: Corporate Wolf or Warrior for the Masses?

By: Melissa Zehner  |  October 3, 2014


If you can’t beat ‘em, tattle. That seems to be the latest strategy in the now six-month battle between Hachette, publishing giant, and Amazon, internet shopping giant. What started as a private contract debate quickly progressed into a very public dispute and has now escalated into a request to the Department of Justice.

And riding in on the heels of that tattling: mudslinging. Words like Price-Fixing, Monopolization, Censorship and Collusion. The kind of words that we frown upon – and that many conglomerates have succeeded in building their multibillion-dollar corporations on anyway.

So is Amazon monopolizing the book market? Is Amazon censoring books? Or is the publishing industry simply throwing a tantrum as the rise of digital reading puts traditional publishing houses to bed?

The Book Wars: A Short History

To get you up to speed on the Amazon-Hachette battle, here’s a recap:

  • In early 2014, Amazon and Hachette begin contract renegotiations and can’t reach a resolution because Hachette disagrees with Amazon’s move to standardize and lower ebook prices to $9.99. Negotiations continue into Spring without resolution.
  • In May, Hachette publicly accuses Amazon of sanctioning books by its authors, claiming that Amazon is maintaining very low stock counts that cause customers to get notices that titles will be “available in 2-4 weeks.” Hachette, which boasts a base of 2,500 authors, will later claim that these actions cause a 50% decrease in its authors’ sales, with some seeing as much as a 90% drop.
  • On May 27, Amazon posts a notice on its Kindle site saying “we are currently buying less (print) inventory and “safety stock” on titles from the publisher, Hachette, than we ordinarily do, and are no longer taking pre-orders on titles whose publication dates are in the future.”

Fast-forward to September 22nd. 1,100 authors form a coalition, called Authors United, to fight Amazon. Authors United sends a letter to Amazon’s Board of Directors and posts a copy of it online for all to read. The letter accuses Amazon of “refusing preorders, delaying shipping, reducing discounting, and using pop-up windows to cover authors’ pages and redirect buyers to non-Hachette books.”

The letter also shames Amazon’s hardball actions during the negotiations, saying “Amazon is undermining the ability of authors to support their families, pay their mortgages, and provide for their kids’ college educations.”

Amazon then posts a rebuttal online, cheekily titling its response website Readers United.

Amazon insists that lowering ebook prices will benefit publishers, authors and readers alike because it will result in dramatically higher sales.

Using an example of an estimated sales increase gained from lowering the price of a $14.99 book to $9.99, Amazon says that “the lower price is good for all parties involved: the customer is paying 33% less and the author is getting a royalty check 16% larger and being read by an audience that’s 74% larger. The pie is simply bigger.”

Now thoroughly miffed, Authors United then graduates from canons to missiles, and announces that it will be approaching the Department of Justice to request that it investigate Amazon for monopolization. The letter to the Department of Justice will be ready at the end of this week.

Authors United Against Amazon

So who is Authors United? A roster of 1,100 authors that grace almost every book collection: Stephen King, John Grisham, James Patterson, Nora Roberts, Malcolm Gladwell, Erik Larson, Ursula K. Le Guin, Meg Wolitzer, Elizabeth Gilbert, Barbara Kingsolver and Anna Quindlen, among others. The estates of literary legends Joseph Brodsky, William Burroughs, John Cheever, Allen Ginsberg, Norman Mailer, Arthur Miller and Hunter S. Thompson have also signed on.

It should be noted that the majority of the authors signed on with Authors United are not published by Hachette. Many of them say they got involved because they’re concerned about the future of the publishing industry as a whole and, as a byproduct, their financial livelihood.

Malcolm Gladwell, a Hachette author and frequent fixture at the top of bestseller lists, told the New York Times, “Over the past 15 years, I have sold millions of dollars’ worth of books on Amazon, which means I have made millions of dollars for Amazon. I would have thought I was one of their best assets. I thought we were partners in a business that has done well. This seems an odd way to treat someone who has made you millions of dollars.”

Ouch. He’s right: Amazon has built its business on the backs of authors. So should Amazon be strong-arming publishers to lower ebook prices? David Streitfeld of the New York Times said it best: “What are the rights and responsibilities of a company that sells half the books in America and controls the dominant e-book platform?”

Mudslinging or Monopolization?

Amazon does reserve the right to play hardball in business. Indeed, half the books in America are currently sold on Amazon; certainly the company has a vested interest in holding onto its giant stake in the market. But when do aggressive negotiating tactics cross the line? Hampering book sales by deliberately making such a massive number of books unavailable (remember that Hachette has 2,500 authors signed) is entering into sticky territory, and possibly bordering on a little word that provokes outrage in the hearts of journalists and writers everywhere: censorship.

Many are already calling it that, including acclaimed author Ursula K. Le Guin. She recently said, “Amazon is using censorship to gain total market control so they can dictate to publishers what they can publish, to authors what they can write, to readers what they can buy.”

And Le Guin isn’t just talking about censorship – she’s also referencing that other bit of mud that’s being slung at Amazon: monopolization. So is Amazon positioning itself to monopolize the book industry?

In addition to its own publishing house, Amazon acquired Goodreads, a social cataloging website for books, and Brilliance Audio, the largest independent audiobook producer in the US, in 2007. Amazon acquired Shelfari, another social cataloging website for books, in 2008. Book Depository, a UK-based online bookseller that was founded by a former Amazon employee, was acquired by Amazon in 2011. Amazon also announced a partnership with DC Comics in 2011, which allowed Amazon the exclusive digital rights to comics including Superman, Batman and Green Lantern. The list goes on.

If Amazon does manage to put its publishers on leashes and standardize ebook prices, it will no doubt yank even more sales away from other booksellers. That larger share of the market, combined with the profits from Amazon’s other bookselling subsidiaries, could certainly make Amazon the dominating force in the industry. Brick and mortar bookstores are already becoming nothing more than a nostalgic memory, there isn’t any other online bookseller that has the resources to compete with Amazon and traditional publishing houses continue to lose traction as ebook and self-published book sales climb.

The Final Chapter

Author James Patterson suggests that everyone play nice in the interests of literary culture: “there are no clear-cut villains – yet – but there are no heroes either, and I think it’s important that major players involved in publishing, as well as the press, and our government, step up and take responsibility for the future of our literature and the part it plays in our culture.” That’s sweet – and not likely to happen.

But the real issue here isn’t who will win and who will lose – it’s who will suffer. And it’s whether we will improve our access to literature or destroy it.

Will Amazon gain enough market control to push only the books it wants, bury the rest underneath hundreds of search results and force-feed you a multibillion-dollar revenue agenda disguised as the next must-read? Or will that flat $9.99 ebook rate even the playing ground? Will smaller, unknown authors rise to the top of the bestseller list because they can finally be heard over the roar of the traditional publishing houses?

Amazon and the publishing houses are each playing the part of the sacrificial lamb, trying to convince us that they’re battling on behalf of the reader – but neither side is really lying down for the common good. Make no mistake, there won’t be any sacrificial lambs here – there will only be those that turn the page to keep pace with the digital world, and those that lose their place.

Amazon certainly isn’t the lamb – but it’s not the wolf the publishing houses want you to believe it is, either.


References: Amazon, Authors United, Gigaom, The Guardian, Los Angeles Times, The New York TimesReaders United,


Not a member? Become a member (Free)

Forgot Password?