June 25, 2014
German book publishers fight Amazon for violating antitrust laws
by Kirsten Reach
Germany is the largest market for Amazon beyond the United States, and the country seems to be putting up an even bigger fight over Amazon terms than we are. Yesterday German book publishers filed with antitrust authority, the Bundeskartellamt, to investigate Amazon.
They suspect Amazon, a company that pays minimal taxes and made $2.6 billion in Germany last year, is violating the country’s competition laws.
Remember when my colleague Alex Shephard mentioned Amazon was delaying shipments from Bonnier? In its negotiations, Amazon is using the same bullying tactics with Bonnier as it is with Hachette: delaying shipments, under-stocking… will it start pulling pre-order buttons next?
“Amazon’s business conduct not only affects those publishers involved, but poses a danger to all who offer e-books in German,” the German Publishers and Booksellers Association wrote in a complaint. We could go so far as to say it poses a danger to all who publish books internationally.
If only Hachette could call on the Bundeskartellamt. The months-long squeeze by Amazon has turned out to be about more than e-books: the company demands compensation for the staff members who deal with Hachette directly, payment for buy buttons, a commission of 50% rather than 30% under the agency model, and the first-born children of all employees (who, as of yesterday, probably include the staff at Perseus). Read the full list here.
Amazon controls up to 70% of the German market of online sales and ebooks, according to the New York Times. The company responded with a statement last night, but it turns the blame back on the publisher just as Amazon U.S. has in its bizarre statement about Hachette (which was posted in the company’s own Kindle forum):
We are aware of the complaint by the Boersenverein [German Publishers and Booksellers Association] 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.
Nice try, Amazon, releasing a statement anybody could read without hunting for it, but consumers are familiar with this old tack by now. Once again, orders will be on a delay if the retailer chooses not to stock additional copies. It will point its finger at the publisher, saying the books were not available in time.
Unlike the U.S., all German print and e-book prices are fixed. Amazon cannot battle German pricing, so it’s going after commission. Just as it has in reported negotiations Hachette, Amazon is demanding that the 30% commission must be 40-50%.
The World Cup may be well under way, but in the book world, we’re rooting for Germany.
Kirsten Reach was an editor at Melville House.