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Amazon in contract dispute with publishers

Businesses in California and elsewhere may find themselves in a dispute when it comes time to renew a contract. The different parties involved in the contract may not necessarily agree to keeping the same terms moving forward, and negotiating a new set of terms may prove difficult. Recently, Amazon has found itself in a contract dispute with six of the major publishing companies.

Each year, the two sides have to sign a new annual contract, which includes provisions relating to "co-op promotional fees" for e-books as well as for other items governing the sale of the books. Yet reportedly for the first time, at least two and possibly all of the six major publishing companies are refusing to sign the new annual contract. For the time being, Amazon is evidently not marketing any of their books in its materials.

The dispute appears to center over the "co-op promotional fees." In the past, publishers have always paid brick-and-mortar stores such fees. However, that was to ensure promotion, and they are not quite sure how much that applies to something like an e-book that is sold through a website. However, what appears to be particularly troublesome for the publishers is the level of the fees as Amazon may be seeking to increase them.

Indeed, in one article about the contract dispute, it seems that Amazon may be asking to increase the fees by 30 times their cost in 2011. Nonetheless, as negotiations now take place, both sides may well make some concessions before finally reaching an agreement. Likewise, California businesses caught in a dispute while attempting to renew a contract may often have a lot of vigorous give and take before settling the matter.

Source: paidContent, "Some big-six publishers refuse to sign new contracts with Amazon," Laura Hazard Owen, April 10, 2012

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