Amazon Will Change Its Ebook Contracts With Publishers as EU Ends Antitrust Probe (theverge.com)

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Amazon Will Change Its Ebook Contracts With Publishers as EU Ends Antitrust Probe (theverge.com)

Posted by msmash on Thursday May 4, 2017 @02:00AM from the case-closed dept.

The EU has reached an agreement with Amazon following an antitrust investigation into the company's ebook business. From a report: In 2015, the European Commission began a probe into the licensing deals Amazon was making with publishers, suggesting that the US giant was forcing them into unfair contracts that stifled competition in Europe's 1 billion Euro ($1.09 billion) ebook market. In January, Amazon suggested a number of changes it would make to its contracts, and the EU now says it's happy to accept them, bringing a close to the investigation. The parts of the contract the EU objected to were a number of "most-favored-nation" clauses. These required any publishers doing a deal with Amazon to reveal the terms of the contracts they made with rival distributers. Amazon could then demand that it got the same deal (or better) on things like ebook prices, agency commissions, promotion campaigns, and release dates.

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Just stop by Big+Hairy+Ian · 2017-05-04 02:05 · Score: 1

charging more for the Ebook than you do for the paperback! I feel like I'm personally financing Blue Origin!

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1. Re:Just stop by xxxJonBoyxxx · 2017-05-04 02:21 · Score: 2
  
  >> charging more for the Ebook
  
  Don't like the price? Just download it as a DRM-free PDF then.
  
  That's pretty much how it works for movies/TV: if someone tries charging more than a couple of bucks for an HD rental, people will torrent* it instead. (* = or view a hijacked stream for live sports)
2. Re:Just stop by EvilSS · 2017-05-04 02:39 · Score: 1
  
  charging more for the Ebook than you do for the paperback! I feel like I'm personally financing Blue Origin!
  Talk to the publishers. They are the ones that forced the agency model on ebooks. So unlike physical books (which use the wholesale model), the publisher sets the price for ebooks, not Amazon.
  
  --
  I browse on +1 so AC's need not respond, I won't see it.
3. Re:Just stop by Anonymous Coward · 2017-05-04 03:18 · Score: 0
  
  Your money isn't financing Blue Origin. It's not Amazon who is pocketing the difference between the paperback and ebook prices, it's the publisher. They're the ones who set (er, strongly suggest) the retail price.
  The big publishers set their ebook prices high because they would rather you bought the paper copy. Paper is what they built their businesses on.
  Small press and indie publishers are much more likely to set their ebook prices at considerable discount from their paper copies. For one, smaller print runs (or print-on-demand) means higher overhead per book. For another, by cutting out the overhead that New York publishers incur (mostly by being in NYC, but plenty of other reasons too), they get by quite happily on their percentage of the lower ebook price.
  So don't blame Amazon for high ebook prices. They'll happily sell one to you for 0.99 if that's what the publisher sets the price to.
4. Re:Just stop by grahammm · 2017-05-04 05:04 · Score: 1
  
  I would have expected the publishers to prefer e-book sales over paperback. A paperback book can be sold second hand, lent to family or friends etc. An e-book with DRM (which I think includes the vast majority of these from large publishers) is tied to the e-reader and to lend the book you would have to lend the whole e-reader and they cannot be sold second hand.
But... by Anonymous Coward · 2017-05-04 02:14 · Score: 0

Bytes are expensive!
1. Re:But... by Big+Hairy+Ian · 2017-05-04 02:18 · Score: 1
  
  *Tweaks Nibbles*
  
  --
  Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.
Stop yourself by Anonymous Coward · 2017-05-04 02:17 · Score: -1

Your comment starts with "charging more for the Ebook than you do for the paperback!" and that makes no sense.
1. Re:Stop yourself by Big+Hairy+Ian · 2017-05-04 02:20 · Score: 1
  
  Comment starts with subject line. Learn and enjoy
  
  --
  Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.
2. Re:Stop yourself by __aaclcg7560 · 2017-05-04 03:20 · Score: 2, Interesting
  
  Your comment starts with "charging more for the Ebook than you do for the paperback!" and that makes no sense.
  Under the wholesale model, Amazon charged $9.99 for most ebook titles to take market share away from other ebook retailers. Apple forced the industry to adopt the agency model that let publishers — not retailers — to set the ebook price. What some traditional publishers have done was to keep ebooks prices higher than paperbacks or hardbacks to protect their print business.
  http://publishingtrendsetter.com/industryinsight/simple-explanation-agency-model/
3. Re:Stop yourself by tlhIngan · 2017-05-04 04:55 · Score: 2
  
  Under the wholesale model, Amazon charged $9.99 for most ebook titles to take market share away from other ebook retailers. Apple forced the industry to adopt the agency model that let publishers â" not retailers â" to set the ebook price. What some traditional publishers have done was to keep ebooks prices higher than paperbacks or hardbacks to protect their print business.
  The issue is that print doesn't cost a lot more money. You'd think that warehousing, printing, etc., would add a ton to the price of a book, but the system has been so optimized that the real cost of printing (+warehousing, stocking and shipping) adds about $1 to the retail price of a book. Even less on the cheaper editions. If you wondered why books are never returned to the publishers (or why some books have that "If you bought this book without its cover, it's illegal" text), that's a reason why - by not having to deal with returns, but having retailers ship just the covers o unsold copies back lets them do returns without really doing returns. (The book industry is such that there are rarely post-retail lives for books - if it doesn't sell at the retailer, moving it to another retailer doesn't generally work).
  A lot of the price is in markups - retailers often get books for 40% off retail, which is why they can often offer up to 40% off the book . Then there are publisher markups, etc. The rest of it is costs - editors, typesetters, artists, and a bunch of other people who massage an author's manuscript into something that can be mass produced.
  In the end, the real cost of printing a book is so tiny that for all intents and purposes, they cost the same0
4. Re:Stop yourself by __aaclcg7560 · 2017-05-04 05:22 · Score: 1
  
  You'd think that warehousing [...]
  According to my college English instructor in the early 1990's, the Reagan Administration raised taxes on warehouses in general and book warehouses in particular. Publisher used to print one million books, warehouse them and sell them as needed. After the warehouse tax went into effect, it was no longer viable for publishers to store books for years at a time. If a bookstore sends back books that don't sell, it's cheaper for the publisher to pulp them. It's one of the reasons why print books have a short shelf lifespan.
  OTOH, I've read that the so-called warehouse tax was a story created by the teacher union to discredit the Reagan Administration.
5. Re:Stop yourself by Anonymous Coward · 2017-05-04 05:53 · Score: 0
  
  According to my college English instructor in the early 1990's, the Reagan Administration raised taxes
  Your college English instructor didn't know the Reagan Administration ended in January 1989?
6. Re:Stop yourself by __aaclcg7560 · 2017-05-04 06:08 · Score: 1
  
  Your college English instructor didn't know the Reagan Administration ended in January 1989?
  You're aware that the Reagan tax reform with "revenue enhancements" took place in 1986? My instructor didn't tell me the story until I was in college in the early 1990's.
I sense a purge coming soon. by HideyoshiJP · 2017-05-04 02:22 · Score: 1

Shit! Back up ya ebooks! Lock 'em up tight!
No buy list by Anonymous Coward · 2017-05-04 02:24 · Score: 0

I keep around a no-buy list. There are the likes of Microsoft, Sony, Nestle. Amazon is there too, not far from the top.
Stifled competition.. by Daemonik · 2017-05-04 02:31 · Score: 1

Soo.. they say Amazon stifled competition.. but the parts of their contracts that they objected to were the "show us your other deals and give us the same deal" clauses that keeps prices consistent across retailers and prevents publishers from making sweetheart deals like they did with Apple. I don't see how that stifle's competition, per se.
1. Re:Stifled competition.. by Geoffrey.landis · 2017-05-04 03:04 · Score: 4, Insightful
  
  Soo.. they say Amazon stifled competition.. but the parts of their contracts that they objected to were the "show us your other deals and give us the same deal" clauses that keeps prices consistent across retailers and prevents publishers from making sweetheart deals like they did with Apple. I don't see how that stifle's competition, per se.
  Because this is price fixing.
  I had a friend who is an independently published author. There are some e-book publishers that, on occasion, run sales: they will offer her book for, say 99 cents for a week as a promotion.
  Amazon has a robot that trolls the web watching the price of e-books from competitors. If the robot finds a book offered for less than the Amazon price anywhere, at any time, Amazon will pull the book off of Amazon because their contract says nobody else is allowed to sell it for less.
  
  --
  http://www.geoffreylandis.com
2. Re:Stifled competition.. by Anonymous Coward · 2017-05-04 03:25 · Score: 0
  
  Amazon will pull the book off of Amazon
  Bullshit. Amazon will just drop their price to match.
  The only time I've ever seen Amazon pull stuff is when an indie is trying to game the system, and they generally only do that after several warnings. (And in fact, they really only bother if the lower price is on a major competitor like Apple. They don't even care about Smashwords.)
  (signed: SFWA member - and indie - who hasn't bothered to login to /.)
3. Re:Stifled competition.. by __aaclcg7560 · 2017-05-04 03:27 · Score: 2
  
  Amazon has a robot that trolls the web watching the price of e-books from competitors. If the robot finds a book offered for less than the Amazon price anywhere, at any time, Amazon will pull the book off of Amazon because their contract says nobody else is allowed to sell it for less.
  If you're not a member of the KDP Select program, which requires that you pull your ebooks from other retailers, you can't price your ebooks for free on Amazon. I used to trick the Amazon robot into setting some of my ebooks to free by having them for free elsewhere and then informing Amazon of the lower price. That trick doesn't work anymore.
4. Re:Stifled competition.. by Anonymous Coward · 2017-05-04 03:30 · Score: 0
  
  Adding ...
  And by gaming the system, I mean scams like paying for reviews, creating sock-puppet accounts to post reviews, and questionable deals with a group of other authors to artificially inflate sales, or designing their ebooks to force Kindle Direct readers to skip to the back (thereby signalling the system that the entire book was "read") without necessarily reading the whole thing.
  Then there are the sleazoids that just repackage public domain stuff (Wikipedia articles, books from Project Gutenberg) and sell it at high prices.
  Not counting your friend amongst any of these, of course.
5. Re:Stifled competition.. by __aaclcg7560 · 2017-05-04 04:06 · Score: 1
  
  Then there are the sleazoids that just repackage public domain stuff (Wikipedia articles, books from Project Gutenberg) and sell it at high prices.
  My favorite repeat offender is Stephen King. If you're not familiar with the bibliography for the REAL Stephen King, you might accidentally buy one of these ebooks. Not sure how this person can get around the safeguards that Amazon has in place. Several my ebooks got flagged because I name dropped Stephen King in the tags.
6. Re:Stifled competition.. by Anonymous Coward · 2017-05-04 05:57 · Score: 0
  
  Why would you want to pay Amazon to help you give away free books? Just give them away yourself.
7. Re:Stifled competition.. by __aaclcg7560 · 2017-05-04 06:17 · Score: 1
  
  Why would you want to pay Amazon to help you give away free books?
  I don't pay Amazon anything on a FREE ebook. A 30% cut on a FREE ebook is nothing.
8. Re:Stifled competition.. by Anonymous Coward · 2017-05-04 06:58 · Score: 0
  
  > Amazon has a robot that trolls the web [...]. If the robot finds a book offered for less than the Amazon price anywhere, Amazon will pull the book [...]
  Wow. Can this be used for a denial-of-service attack?
9. Re:Stifled competition.. by Anubis+IV · 2017-05-04 08:02 · Score: 1
  
  Quite the contrary, that clause is the precise reason why the publishers had sweetheart deals with Apple.
  As you suggested, a Most Favored Nation (MFN) clause generally isn't a problem. The problem comes from when you pair MFN with agency pricing (i.e. publishers set the prices while retailers take a cut), because it prevents retailers from competing on price for reasons that aren't obvious at a first glance. Rather than trying to explain it in abstract, let me just run through the Apple vs. Amazon situation from a few years back to demonstrate the issue:
  1) Amazon had wholesale pricing, while Apple had MFN + agency pricing with publishers. So far, no obvious problem.
  2) Because of Apple's MFN clause, the publishers were disallowed from listing their eBooks elsewhere for less, including via Amazon. As such, to prevent Amazon from listing below the price they used with Apple, the publishers were forced (not that they were complaining) to raise their wholesale prices to match the list prices at Apple, reducing Amazon's margin to 0% if Amazon merely matched Apple's list price. It's weird territory, but not out-and-out anticompetitive yet.
  3) In order to have any margin at all, Amazon was forced to adopt agency pricing (again, not that the publishers were complaining).
  4) At that point, competition became impossible. If Amazon encouraged lower prices from publishers by reducing its cut or offering kickbacks, the MFN ensured that Apple reaped those same rewards without any of the effort. Conversely, if Apple increased its cut and the publishers raised prices to match, the MFN ensured Amazon's prices would go up too, even though their cut hadn't changed.
  All of which is to say, MFN + agency ensures no one can benefit from competing on price, thus ensuring that no one will even try.
  That was fine for Apple, since they had the funds to tough it out until their service could sustain itself (which was bound to happen eventually, given that they had a decently large installed base already), but it didn't work so well for customers, since publishers saw Apple as a means to retake control over their own profits (Amazon was really turning the screws on them at that time), thus pushing prices up.
  As for today's situation, I don't know all of the details, but if Amazon had agency pricing with MFN, then it would be impossible for an upstart company to undercut Amazon's prices, effectively locking in Amazon's dominance.
10. Re:Stifled competition.. by Anonymous Coward · 2017-05-06 11:19 · Score: 0
  
  Amazon has a robot that trolls the web watching the price of e-books from competitors. If the robot finds a book offered for less than the Amazon price anywhere, at any time, Amazon will pull the book off of Amazon because their contract says nobody else is allowed to sell it for less.
  Hey, that's actually better than what they did initially: they permanently changed the price for that eBook to that until you complained long enough. http://www.jimchines.com/2012/02/amazon-ebook-price/
Interesting but probably irrelevant... by __aaclcg7560 · 2017-05-04 03:14 · Score: 1

Despite being the world's largest marketplace, I get most of ebook sales through Smashwords and not Amazon. I doubt whatever changes Amazon had to make for Europe will trickle down to my bottom line.
Purge? what Purge? by DrYak · 2017-05-04 04:22 · Score: 3, Interesting

What is this 'DRM' thingy you seem to be afraid of ?
(Note: I legally obtain the book I'm DeDRM-ing.
I'm just removing the DRM because I'm fed up with the Adobe Digital Edition fucking things up on a regular basis and access to my book getting b0rked yet again.
This kind of De-DRM-ing is actually tolerated in my local jurisdiction - as it should be everywhere)

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