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Amazon strikes new e-book deal with Simon & Schuster

Multi-year agreement for sales of physical and electronic books comes amid contentious talks with another book publisher.

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Amazon and Simon & Schuster reach new e-book agreement. Sarah Tew/CNET

Amazon has reached a multi-year deal with Simon & Schuster to sell physical and electronic copies of its titles amid contentious negotiations with another book publisher.

The agreement, which was revealed in a letter to the publisher's writers, gives Simon & Schuster control over e-book pricing "with some limited exceptions," according to the letter, which was signed by Simon & Schuster CEO Carolyn Reidy and obtained by the New York Times. The existing contract between Amazon and Simon & Schuster, which is owned by CNET parent CBS, was due to expire in two months.

"Our new deal assures that your books will be continuously available for sale at this major retailer through this year's holiday book buying season and well beyond," Reidy wrote.

The new contract, which was first reported by Business Insider, was confirmed by Amazon in an emailed statement.

"We are very happy with this agreement, as it allows us to grow our business with Simon & Schuster and help their authors reach an ever-wider audience," the company said in a statement. "Importantly, the agreement specifically creates a financial incentive for Simon & Schuster to deliver lower prices for readers."

The new contract comes amid protracted negotiations between Amazon and book publisher Hachette, the fourth-largest publisher in the US. Terms of their negotiations have not been made public, but it's widely believed the issues stem from both Amazon's desire for a larger percentage of each e-book sale -- 50 percent, not 30 percent -- and Hachette's desire to price e-books above $9.99.

After the two were unable to agree on mutually acceptable contract terms earlier this year, Amazon removed preorder buttons from upcoming Hachette titles and refused to restock its books. Amazon acknowledged in May that it was restricting the sale of some Hachette titles on the Internet retailer's site but portrayed the move as a legitimate negotiating tactic aimed at getting more value for consumers.

Hachette accused the company of purposely delaying shipment and using authors as bargaining chips. In July, a group of nearly 900 authors, including heavyweights like Stephen King, Jennifer Egan and John Grisham, signed a letter opposing Amazon's negotiation tactics.

Hachette did not respond to a request for comment on Simon & Schuster's new agreement.