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Amazon responds to German antitrust complaint, says it wants a larger commission on ebooks

The German Publishers and Booksellers Association (Börsenverein) announced Tuesday that it’s asked German antitrust authorities to investigate Amazon’s actions against publisher Bonnier in the country. On Tuesday evening, Amazon(s AMZN) responded to the German complaint in a long statement. It denied that it’s delaying shipments of Bonnier titles, and said that it is instead keeping fewer of them in stock. It also said that it should receive larger discounts on ebooks than it does on print books.

“We are aware of the complaint by the Boersenverein that alleges that we are delaying shipments to customers – this allegation is not true,” Amazon said. “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.”

This is resulting in shipping delays between a few days and a few weeks on some Bonnier titles (like this one). The explanation of the delays is similar to the one that Amazon provided about Hachette. In the case of Hachette in the U.S., however, Amazon has taken other measures, including turning off pre-orders, but it’s not using those tactics on Bonnier titles (at least not yet).

“We would like to add some context,” Amazon continued. “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.”

All German book prices (print and e-book) are fixed; Amazon legally isn’t allowed to discount them. Amazon is referring here to the commission that it receives on ebook sales. Right now, that commission is 30 percent of a book’s retail price — so if an ebook sells for €10, for instance, Amazon gets €3 and the publisher gets €7.  Amazon wants that commission to be higher — reportedly 40 or 50 percent of the retail price. So in the case of that €10 ebook sale, Amazon would get €4 or €5, while the publisher (and, from there, the author) would get less per sale.

4 Responses to “Amazon responds to German antitrust complaint, says it wants a larger commission on ebooks”

  1. I’m sure Amazon would love to decrease the role and power of the “publisher” of electronic books and deal directly with the authors. Amazon may try to drive publishers out of business. Disintermediation.

  2. John Shea

    Amen to both McMath and Michael W. Perry!

    Bonnier and possibly Hachette today, indie authors tomorrow? Both the indie author dream and big publishers’ current profits are based on the 30% ebook supplier discount. Is that basis now eroding?

    McMath’s recollection is mine also. And big publishers originally paid authors 50% of net, i. e. 17.5% of gross. When Amazon doubled the net to preempt Apple, the big publishers grabbed ALL the increase, paying authors the same 17.5% of gross, or only 25% of net,

  3. Michael W. Perry

    Note what Amazon is saying to German officials: “Amazon is referring here to the commission that it receives on ebook sales. Right now, that commission is 30 percent of a book’s retail price…. Amazon wants that commission to be higher — reportedly 40 or 50 percent of the retail price.”

    It’s yet another proof that Amazon resents the 70/30 split that Apple forced on them a few years back. Note too that it currently only pays 70/30 (actually less after a download fee) for ebooks priced between $2.99 and $9.99. For ebooks at any other price, it pays a meager, far-below-anyone-else 35%. Apple, in contrast, pays 70% for all ebook prices from $0.99 to $199.99.

    You don’t need to be a rocket scientist to figure out that, if Amazon has its way, the author of an $9.99 ebook who is currently getting a bit under $7.00 per sale will be getting somewhere between $3.50 and $5.00 instead. His income will drop roughly in half.

    Note the facts. Amazon will be pocketing from $5.00 to $6.50 for a processing a financial transaction and file download that costs it mere pennies. An author who spent months or even years writing that book will get only a little more than half as much as Amazon for a nanosecond of digital ‘labor.’

    Are you starting to see why Amazon isn’t the author’s friend? Amazon is friend to no one but Amazon. They’re making that quite clear in their negotiations with the German government. And if Amazon can get away with bullying major publishers, independent authors and small publishers don’t stand a chance.

  4. McMach

    Was Amazon not charging 70% before Apple started the iBook store with 30% commission, with Amazon then matching Apple? Or am I mistaking this for something else? If true, I can see that the US DOJ has been very good at maintaining a monopoly!