Amazon Responds to German Antitrust Complaint, Admits It Wants Wholesale Terms on eBooks

2233079703_8700d02b80_o[1]Earlier today Germany's Börsenverein announced that they had filed an antitrust complaint against Amazon, alleging that the retailer was the next best thing to a monopoly and was using its market dominant position to break German law.It's still far too early for an offical response from the German govt, but late on Tuesday Amazon responded to the news. According to Amazon's statement,  it isn't delaying the shipment of Bonnier titles; Amazon is just running out because it's not keeping very many copies in stock. (This is pretty much what Amazon said in response to similar claims from Hachette. )

But Amazon does admit to wanting better terms for ebooks. From their statement, it sounds like Amazon is pursuing in Germany the same price parity terms they are rumored to be demanding in the UK.

Arguing that ebooks have lower costs than print books, Amazon want to buy ebooks on terms similar to that of paper books. While that is true to a small degree, what Amazon neglects to mention is that the better ebook terms won't be passed along to customers. Thanks to Germany's fixed price book laws that is simply not possible.

What Amazon is hoping you won't notice is that they're trying to turn the clock back to the wholesale period, and in doing so secure a larger share of ebook revenues for their own pockets. Admittedly, that's not what Amazon is specifically saying, but it comes to the same thing.

Read the statement and tell me I am wrong:

We are aware of the complaint by the Boersenverein that alleges that we are delaying shipments to customers – this allegation is not true. We are currently buying less print inventory than we ordinarily do on some titles from the publisher Bonnier. We are shipping orders immediately if we have inventory on hand. For titles with no stock on hand, customers can still place an order at which time we order the inventory from Bonnier -- availability on those titles is dependent on how long it takes Bonnier to fill the orders we place. Once the inventory arrives, we ship it to customers promptly.

We would like to add some context: It’s widely understood that e-books should cost customers less than the corresponding print edition - in digital there is no printing, freight, warehousing, or returns. We believe this should also be reflected in the terms under which booksellers buy their books from publishers, and this is the case in our terms with most publishers around the world, including in Germany. For the vast majority of the books we sell from Bonnier (a division of the 3 billion Euro international media conglomerate, Bonnier Media Group AB), they are asking us to pay them significantly more when we sell a digital edition than when we sell a print edition of the same title.

image by bravenewtraveler

About Nate Hoffelder (11579 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

9 Comments on Amazon Responds to German Antitrust Complaint, Admits It Wants Wholesale Terms on eBooks

  1. Turning back the clock to the wholesale era?
    Well, considering agency was forced on them via conspiracy, it should be understandable that they want nothing to do with it.
    And just because the retail price of books is fixed doesn’t mean their customers won’t see benefits. If you remember, in Italy they ran a temporary promotion where book buyers got overt discounts on other items. They can probably find loopholes by giving buyers perks that aren’t based on the price of the ebooks they buy, but (maybe) the quantity. They’re out of the box thinkers and they, too, can hire German lawyers.

    Try reading Amazon’s position as a stand against agency on the grounds of controlling their own business and see if it sounds so unreasonable. Agency turns ebook retailing into a public service run for the benefit of publishers, not the retailer. Amazon clearly wants to make Agency economically non-viable by unbundling their retail services. It’s an interesting strategy and a novel one so the publishers have no answer for it, hence the public squealing.

    Amazon has had four years to think about Agency and draft legal counters so there’s no telling where this is headed.

    This is getting fun.
    (I’m going to need more munchies, though.)

    • I think it’s past time we split agency up again and look at the specific components. What we call agency is two otherwise unrelated issues: the 70-30 split and retail price maintenance. Amazon already got free of RPM from most publishers, and now they are going for changing the 70-30 split.

      I really hope they don’t get the latter, because if they do they will take away the 70% option in KDP.

    • Again, if Agency model sales are so evil why aren’t you railing against Amazon’s self publishing platform? KDP is a perfect example of how agency pricing works – the rightsholder sets the price and the retailer takes a cut.

      Also, Germany ? United States.

      • KDP isn’t agency. There’s no RPM.

        • In KDP the publisher sets a list price and is paid accordingly but it is Amazon that controls the sale price. (Unless they’re price matching.) That makes it a (modified) wholesale model.

        • The 35% royalty option is flat-out agency. The publisher sets the price and always gets that amount regardless of the retail price (e.x. Any discounting comes out of Amazon’s cut).

          Yes, the 70% royalty option give Bezos some extra ways to fleece authors. Still doesn’t mean it isn’t Agency. Agency pricing models and price controls are not the same thing.

          • The 35% option is a hell of a to closer to the wholesale model which bookstores have been using for paper books for decades. It is not agency due to the simple fact that the supplier does not control the price.

  2. I read the statement differently. The first paragraph is a direct response to Bonnier (the Germany issue). The second paragraph starts out about setting context and is talking globally. I think this is an indirect response to the Hachette leak and is stating that what these disputes are about is agency and Amazon is fighting (globally) for wholesale and cheaper ebook prices.

    • I don’t think anybody who has read the direct statements from Hachette and Amazon (as opposed to the “inferences” and innuendo from outsiders) thinks the issue is anything but agency.
      Even Amazon’s tactics scream that it is about agency.

      Agency, round 2: barefisted negotiations in street corners and political circles.

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