When Amazon Went to War With Hachette

How a fight over book prices revealed who really had the power in publishing

In the spring of 2014, something strange began happening to books published by Hachette.

They were still being published. They were still sitting in warehouses. They were still available to customers. But on Amazon, some of them suddenly became difficult to buy.

A book that should have arrived in a couple of days might say three to five weeks. Some books could not be preordered. Others appeared without the discounts Amazon customers had come to expect. In some cases, Amazon seemed to be steering readers toward books published by other companies.

One of the affected books was The Silkworm, a crime novel by Robert Galbraith, better known as J.K. Rowling. Another was T.D. Jakes's Instinct, which had reached No. 1 on the bestseller list.

This was not a computer glitch. Amazon was fighting with Hachette Book Group, one of the largest publishers in the United States, over the terms of their contract, and it had found a very modern way to apply pressure. It could make a book harder to buy.

The fight behind the fight

The argument was largely about money. Amazon wanted better terms from Hachette, including greater discounts and more control over ebook pricing. Hachette did not want to give them up.

That might sound like an ordinary negotiation between a retailer and a supplier. Walmart does it. Supermarkets do it. Department stores do it. But books are different. A supermarket can squeeze a cereal manufacturer without changing whether people can find breakfast. A book retailer can make it much harder for a particular author to reach readers.

Amazon was no ordinary bookstore. By 2014, it had become one of the most important retail outlets for books in America. The company could sell a book to millions of people, recommend it, discount it, ship it quickly, and put it in front of readers searching for something else. That gave Amazon enormous leverage. Hachette understood this. So did its authors. And eventually, so did everyone else.

Amazon initially said it was simply negotiating. The company argued that retailers routinely demand favorable terms from suppliers and that better terms could ultimately mean lower prices for customers. There was a legitimate argument here. Amazon had spent years pushing book prices downward, and its Kindle strategy had helped establish $9.99 as a psychological benchmark for ebooks, on the theory that cheaper digital books would encourage people to buy more of them.

Hachette saw the situation differently. The publisher argued that Amazon was deliberately making its books harder to obtain in order to force the company into accepting its terms, holding minimal inventory and allowing some orders to take weeks to arrive even when the publisher had supplied the books.

For most of publishing history, readers had no idea what happened between a publisher and a bookseller. The negotiations happened behind closed doors. Now the reader was experiencing the negotiation personally. You wanted the book. Amazon had it. Amazon just wasn't particularly interested in making it easy for you to get it.

The authors get angry

This was where the dispute became much bigger than Amazon and Hachette. Authors began realizing that they were being used as leverage in a fight they had not started.

Nearly 400 writers, including Stephen King, Robert A. Caro and James Patterson, signed a letter criticizing Amazon's tactics. They objected to delayed deliveries, the inability to preorder books and the way Hachette authors were being treated on the site.

That created an uncomfortable situation. An author could spend three years writing a book. The publisher could edit it, design it, print it, publicize it, and send it into the marketplace. And then the world's largest online bookseller could effectively put its thumb on the scale, while the author had almost no say in the matter. As one author put it at the time, writers were caught in the crossfire.

That was not simply a rhetorical complaint. A book that does not sell can affect an author's next contract. Poor sales can make a publisher less willing to invest in the next book. A delayed launch can damage the momentum that a new release depends upon, and publishing is unusually dependent on momentum. A book has a publication date. Reviews arrive around that date. Interviews happen. Publicity happens. Books appear in stores. Readers talk about them. Then the attention moves somewhere else. If your retailer makes your book harder to buy during that window, you cannot simply get the time back six months later.

In July, Amazon made an extraordinary proposal. It offered to give Hachette authors 100 percent of the revenue from the sale of their ebooks while the dispute continued, provided Hachette agreed to forgo its own share as well. In other words, Amazon suggested cutting the publisher out of the digital transaction and giving the money to the writers. It was clever, and it was also deeply controversial.

Amazon presented the proposal as a way of taking authors out of the fight. Hachette and many authors saw something else: an attempt to drive a wedge between publishers and the people who wrote their books. Douglas Preston, one of the authors leading the opposition to Amazon, described it as asking authors to load Amazon's guns for it.

The argument exposed something that had been hiding underneath the entire dispute. Who actually owns the relationship with the reader? The publisher? The author? The bookstore? Or the company controlling the website where the transaction takes place?

A fight over price, and control

By July, Amazon became more explicit about what it wanted. It argued that most ebooks should cost $9.99 rather than the $14.99 or $19.99 prices publishers were often charging. Amazon also proposed a 70/30 split of ebook revenue, with 70 percent going to Hachette and 30 percent to Amazon, while arguing that Hachette should split its portion evenly with authors.

On the surface, this sounded like a fight over pricing. Underneath, it was a fight over control. Who decides what a book should cost? The publisher, which had invested in acquiring, editing, producing, and marketing it? The author, whose work created the product? Or the retailer, which had the customer relationship and enormous control over what readers saw? The answer mattered because whoever controlled the price had enormous influence over the economics of the entire industry.

Amazon was not entirely wrong to raise the question. Publishers had their own history of trying to control ebook prices. In 2012, the Justice Department sued Apple and five major publishers over allegations that they had conspired to raise ebook prices. Hachette was among the publishers that settled the case without admitting wrongdoing. So Amazon could credibly say that it was fighting against a publishing industry that had tried to prevent retailers from competing on price.

But there was a catch. Amazon's enormous market power meant that its preferred solution could become just as consequential as the system it was fighting. The question was no longer simply whether ebooks should be cheaper. It was whether one company should have enough influence over the book market to determine the answer.

Nobody really won, and everyone learned something

After months of increasingly public warfare, Amazon and Hachette finally reached an agreement in November 2014. The terms were not fully disclosed, but Hachette retained the ability to set ebook prices, while the agreement gave Amazon financial incentives tied to lower prices. Amazon resumed normal sales of Hachette books. Both sides claimed victory, which is usually how these things end.

But the publishing industry had learned something more important than who won the negotiation. Amazon had demonstrated that it did not need to ban a book to make life difficult for a publisher. It did not need to remove a title or announce a boycott. It could simply change the shopping experience: a longer delivery time here, a missing preorder button there, a discount that disappeared, a recommendation for another book instead. A customer who decides, after seeing "usually ships in 3 to 5 weeks," that perhaps another book will do.

None of those actions looks dramatic by itself. Together, they can change the economics of publishing.

The Amazon-Hachette fight was a warning about what happens when a retailer becomes too important to ignore. Publishers had spent decades worrying about bookstores. Now they had to worry about platforms, and that distinction matters. A bookstore sells books. A platform controls the environment in which books are discovered, compared, priced, reviewed, recommended, and purchased. Amazon was becoming all of those things at once.

For authors, the lesson was even simpler: your publisher may publish your book, but that does not necessarily mean your publisher controls your access to readers. For readers, the fight offered a glimpse behind the curtain, since the apparently simple act of clicking "Buy" was connected to a complicated chain of contracts, discounts, royalties, distribution agreements and corporate negotiations.

And for publishers, there was a much harder lesson. If one retailer becomes indispensable, eventually the negotiation stops being between equals. In 2014, Amazon showed the publishing industry what that looked like. It did not have to stop selling books. It only had to make some books a little harder to buy.

That was enough.