Even though the Justice Department has kiboshed “most favored nation” deals in the arrangement with the three agency publishers who settled, those deals are only binding on those publishers. Amazon is still using it in its arrangements with smaller publishers, and will probably continue to do so until and unless the DoJ turns its gimlet eye on them.
The New York Times and PaidContent, among others, are reporting on the case of Buzz Bissinger’s 12,000-word essay “After Friday Night Lights,” a sort of afterword to his book Friday Night Lights whose normal list price is $2.99. However, this week Starbucks and Apple featured the work as a promotional giveaway to Starbucks customers, who get an access code to download it for free. (The Times and PaidContent differ on whether Bissinger gets royalties for the Starbucks giveaways; the Times says he gets $1.50 per download and PaidContent says Starbucks said giveaway authors waive royalties in return for publicity.)
The problem is that Amazon’s pricebots noticed the giveaway, and marked the book down to $0 on Amazon.com (meaning that Bissinger wouldn’t get any royalties from it) and Bissinger’s publisher, Byliner, promptly pulled the e-book from Amazon for the duration of the giveaway “to protect our authors’ interest.” The book will return at normal price after the promotion is over.
Perhaps the funny thing in all this is how careful both the authors and the publisher were being in talking about Amazon despite Amazon essentially screwing them out of a week’s worth of sales in response to a promotion that only some people would be able to use. Bissinger calls it “a shame” and Byliner is “disappointed,” but both were careful to mention what a “crucial outlet” or “great partner” Amazon is in general. It reminds me of those comedy beats where someone drops an anvil on his foot but has to censor his swearing because a small child is nearby.
So what can we take away from all this? As the biggest single sales outlet for e-books, and with its price-matching bots, Amazon can significantly penalize anyone who has the temerity to give his books away or run a sale anywhere else. This seriously limits the kind of promotions an author or publisher can do—giving something away anywhere has to become giving it away everywhere. And they pretty much have to grin and take it since Amazon is where the majority of their sales come from—pulling the book will hurt them far more than Amazon. They don’t even feel like they can complain lest they risk Amazon dropping their other books.
And there’s absolutely nothing to keep Amazon from doing it to any publisher not barred from taking that kind of contract by the Justice Department. (Just as nothing forced them to implement agency pricing for the non-Agency Five/Big Six publishers it also serves.) Perhaps this is a way the enforced settlement could be a good thing for the publishers who have to abide by it.