Two US publishers turn backs on Amazon.com

At least two of the big six publishers in the US are refusing to renew contracts with Amazon.com, with the giant internet retailer said to be downplaying the promotion of their titles as a result of the dispute.

The news was first reported by Salon reporter Alexander Zaitchik, who noted in a longer piece on Amazon, that "for the first time, the 'Big Six' publishers—HarperCollins, Random House, Hachette, Simon & Schuster, Penguin and Macmillan—have refused to sign Amazon's latest annual contract". Overnight PaidContent reported that "people familiar with the situation" confirmed to its reporter that at least two of these big-six houses have refused to sign new annual contracts, but it could not confirm whether the remaining four had taken a similar stance.

The problems have come to the fore after Amazon demanded increases in 'co-op promotional fees' for e-books. According to Salon, in some cases Amazon has been asking for promotional fees "30 times their 2011 cost". Publishers Weekly reported back in August that Amazon had been asking for a higher contribution to marketing costs, and in February this year, the US distributor Independent Publishers Group saw its e-book titles removed from Amazon's website after it refused to give in to demands.

PaidContent notes that none of the 'big-six' publishers' titles have so far been removed from Amazon.com, as has happened in the past both in the US and UK, but said sources indicated that it was not promoting big-six houses' books on the site or in marketing materials "in ways it once did". The report did not name the publishers it thought had seen their books lose Amazon promotional support, but Amazon's 'Best Books of April' campaign features titles from a range of publishers, across both print and digital formats, including books from Simon & Schuster, Macmillan, Random House, and HarperCollins, but none from Penguin or the Hachette Book Group--though books from these publishers do feature in the 'category' highlights.

It is unlikely that the 'big six' publishers would have decided in concert to not sign Amazon's new contracts, particularly since these contracts would renew at different times of the year.

The 'big six' remain under investigation for possible collusion over the shift to the agency model in 2010. In a separate report, Bloomberg writes that Apple and Macmillan are "preparing to be sued" by the US Justice Department over "alleged collusion in the pricing of e-books, according to two people familiar with the matter". The government is seeking a settlement that would let Amazon and other retailers return to a wholesale model, where retailers decide what to charge customers, the people said. However, Apple and Macmillan have refused to engage in settlement talks with the Justice Department, Bloomberg said.