Amazon settles dispute with publishing company

Online retail giant Amazon and book publisher Hachette have finally resolved an extended book distribution dispute.

The conflict began as a standard negotiation disagreement several months ago and eventually mushroomed into a major and highly publicized business quarrel.

SEE ALSO: Amazon’s new Fire smart phone is designed with shoppers in mind

Ultimately, both sides reached an agreement this week; and while the details of the new multiyear contract between retail and publisher haven’t been made public, representatives for both sides voiced satisfaction with the final resolution.

The now-resolved dispute originally stemmed from an impasse over contract negotiations between the supplier and retailer earlier in the year.

As David Streitfeld of The New York Times explains, the contractual deadlock soon blew up into a dispute with much larger implications: “What began as a negotiating standoff between supplier and retailer — completely routine, Amazon insisted — became a highly-public conflict. Depending on which side you were rooting for, it was a struggle between the future and the past, the East Coast and the West Coast, culture and commerce, the masses and the elite, technologists and traditionalists, predators and prey.”

Although the details belying the disagreement between both sides remain to be revealed, business insiders with an understanding of the situation indicated that the problem largely stemmed from Amazon wanting to lower e-book prices, while also taking in a larger portion of the sales profit.

Hachette executives considered the new propositions extremely threatening, as they would have undermined the very purpose of the publishing company.

Faced with what basically amounted to an existential threat, Hachette expressed concern over Amazon’s seeming intent to alter the e-book market for their own benefit by circumventing the role of publishers—such as Hachette—in the supply chain.

The dispute reached a further boiling point when Amazon began to actively work to discourage the sale of Hachette-published books on its website through delays in shipping and the removal of discount offers.

As David Streitfeld goes on to report, with contract negotiations still unresolved, “…Amazon raised the stakes by discouraging sales of Hachette books, that incited the ire of those authors and then other members of the literary community. Douglas Preston, a thriller writer published by Hachette, formed Authors United, a group that has about 1,500 members, including some of the most prominent and popular writers in the country.”

The prospects of potential antitrust lawsuits and accusations of monopolization seem to have brought Amazon executives back to the negotiating table.

While most of the details of the new contract have not been revealed, Hachette spokespersons have revealed that the publishing company will have the right to set e-book prices as part of the new deal.

SEE ALSO: Amazon’s delivery drones: Lots of potential, but lots of questions

Having been one of the most disputed points of negotiations, the fact that Hachette won out on this front is demonstrative of the fact that the public pressure, which had mounted against Amazon, had taken its toll.

With the new, multiyear contract in place, operations should resume their normal pace promptly as both sides aim to work through the rift that defined the last few months.