Services & Software

Amazon acknowledges contract standoff with Hachette

Internet retail giant admits restricting sales of the publisher's titles but calls it a justified negotiating approach.

Amazon CEO Jeff Bezos CNET

Amazon acknowledged Tuesday that it is restricting the sale of titles from book publisher Hachette but portrayed the move as a legitimate negotiating tactic aimed at getting more value for consumers.

Amazon is "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," the Internet retail giant said in a statement posted to a Kindle forum. "These changes are related to the contract and terms between Hachette and Amazon."

The comments are Amazon's first public statements on its negotiations standoff with the publisher, which owns the imprints Grand Central Publishing; Orbit; and Little, Brown; among others. Amazon said the two were unable to agree on mutually acceptable contract terms but did not elaborate on the terms that were proposed.

"When we negotiate with suppliers, we are doing so on behalf of customers," Amazon said. "Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers."

After talks over ebook pricing broke down, Amazon has come under criticism for increasingly aggressive manoeuvres to force the publisher to play by its rules and accept lower prices. The standoff escalated last week when Amazon prevented customers from pre-ordering some Hachette titles.

The order button to pre-order J.K. Rowling's new novel, "The Silkworm," was stripped from its Amazon page, which now lists the title as unavailable. The same fate befell Brad Stone's upcoming paperback edition of "The Everything Store: Jeff Bezos and the Age of Amazon," a book detailing the e-commerce company's hardball tactics in its dealings with book publishers.

Amazon has also bumped up prices on scores of other Hachette titles, according to sci-fi writer Michael Sullivan, who complained to The New York Times after Amazon began escalating pressure on his publisher, that "it's the little guys who pay the price." In its statement, Amazon offered to fund half of a pool to mitigate the impact on authors' royalties if Hachette put up the other half.

Although Amazon said that "Hachette has operated in good faith," the company was not optimistic that a quick resolution was possible.

"Despite much work from both sides, we have been unable to reach mutually-acceptable agreement on terms," Amazon said in its statement. "Though we remain hopeful and are working hard to come to a resolution as soon as possible, we are not optimistic that this will be resolved soon."

Updated at 11:45 p.m. PT to add reference to authors' royalties pool.