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Amazon, Hachette settle ugly dispute over e-book pricing

The ugly, public stare-down between Amazon.com and Hachette Book Group over the price of e-books is over, but no one is saying who blinked first.

Publisher to retain control over e-book pricing, but will have 'incentives' to keep prices low

A worker gathers books for delivery from the warehouse floor at Amazon's distribution centre in Phoenix, Ariz. Amazon and Hachette have settled their dispute over e-book pricing. (Ralph D. Freso/Reuters)

The ugly, public stare-down between Amazon.com and Hachette Book Group over the price of e-books is over, but no one is saying who blinked first.

New York publishing house Hachette announced this morning that it had retained control over the price of e-books from its authors, the key sticking point in the six-month standoff between the two companies.

By mid-morning, Amazon had ended its campaign against Hachette books, which involved discounting, failing to list books and slowing deliveries.

Hachette and Amazon gave few details of their agreement, but Kindle vice-president David Naggar said later in the day that Hachette would enjoy “special incentives” to deliver lower prices.

Amazon, which dominates book sales, would like a standard low price for e-books, like Apple has for iTunes. But it appears all Hachette books will not sell for $9.99 US.

Publishers want to retain control

Publishers have been resisting the Amazon push to discount, despite an antitrust case in in 2012 by the U.S. Justice Department which found that six publishers were fixing e-book prices. The publishers, including Hachette, were required to negotiate new deals with Amazon and other retailers.

Simon & Schuster reached its own agreement with Amazon last month, again retaining control of the price of its e-books. Other major publishers, such as the recently merged Penguin Random House and HarperCollins, are soon to renegotiate with Amazon.

Hachette, a unit of France's Lagardère SCA and the fourth-largest U.S. book publisher, said the new multi-year deal for both print and e-books will take effect early next year. 

"This is great news for writers. The new agreement will benefit Hachette authors for years to come. It gives Hachette enormous marketing capability with one of our most important bookselling partners," Hachette CEO Michael Pietsch said in a statement.

Neither Pietsch nor Amazon have elaborated how “incentives” might work to lower prices – or whether Amazon will take a hit on its margins to keep prices low.

Writers fought back against Amazon

Hachette represents writers such as Donna Tartt, author of The Goldfinch, thriller writer James Patterson and comedian Stephen Colbert.

Amazon had blocked preorders on their books, slowed deliveries or blocked listings, leading to a very public scolding of the online retailer by writers.

Douglas Preston, a Hachette writer who had organized a public campaign against Amazon through Authors United, rallied 900 writers, including Canada’s Ruth Ozeki and Linwood Barclay, to his protest.

In an email Thursday, Preston said he’s relieved by news of the agreement and hopes that "if disagreements arise in the future between Amazon and publishers, Amazon will never again seek to gain leverage by sanctioning books and hurting authors."

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