April 30, 2012

Amazon takes retribution after violation of its most-favored-nation status


Well, we didn’t really need any more evidence that Amazon is totally out of control, but over the weekend one well-known author got an up close and personal look at how it ain’t just publishers getting screwed in Amazon’s vicious version of art meeting commerce.

The author in question is bestseller Buzz Bissinger, who flipped open his laptop on the train ride home from a publicity event for his newest book — After Friday Night Lights, an ebook epilogue to his smash bestseller Friday Night Lights — only to discover that his book was nowhere to be found on Amazon. Bissnger didn’t know it at first, but he’d become the latest victim to Amazon’s relentless price-slashing — which has only increased since the Department of Justice announced it was prosecuting publishers who opposed Amazon’s severe discounting as a monopolistic tactic.

According to a New York Times report by David Carr, the book, which is meant partly as a fund raiser for an injured high school football player named Boobie Miles, was pulled by Bissinger’s publisher, Byliner, after Amazon priced the book at $0.00 in an act of retribution against Bissinger and Byliner for participating in a promotion of the book with Apple.

As Carr details, Apple had selected After Friday Night Lights for a promotion it does with Starbucks called Pick of the Week, “giving customers a code they could redeem online for the book. (Mr. Bissinger said he still received a royalty of $1.50 for each copy sold.) Amazon interpreted the promotion as a price drop and lowered its price for ‘After Friday Night Lights’ to exactly zero.”

Saying it had to “protect our authors’ interest,” Byliner quickly pulled the book from Amazon — as, most likely, any publisher would have done, operating on the principal that, well, you can’t have someone saying a book is worth nothing.

But everyone in the story gets pretty mealy-mouthed after that, Carr observes, due to the fact that Amazon is, after all, the ruling monopoly on ebook sales, and both Bissinger and Byliner have other books to sell. But as Carr also observes, this kind of behavior from Amazon “will only grow as the impact of the Justice Department’s lawsuit begins to emerge.”

One thing unobserved, though, is the fact that the move reveals a tactic of Amazon’s that publishers have long grumbled about— its demand of most-favored-nation status. That is, Amazon has long demanded that no other retailer can get a better deal than it does. Beyond sending a message about dealing with arch-rival Apple, that’s what this move was all about — Amazon was punishing Byliner and Bissinger for violating their dictum, as well as sending a message to authors and publishers at large: Don’t even think about giving anyone a promotion that in any way, shape, or form resembles a bigger discount than ours.

Of course, the demand for most-favored-nation status is illegal, a violation of several anti-trust laws.  We know this because Attorney General Eric Holder said so in his speech at the press conference in Washington a couple of weeks ago announcing the government’s lawsuit against Apple and five of the Big Six publishers — for, among other things, “their anticompetitive most-favored-nation agreements.”


Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.