Amazon — The 1st Illegal Monopsony?

It’s been nearly four months since the New York Times first published reports of deteriorating contract negotiations between Amazon.com Inc. and Hachette Book Group. [1] While some details have begun to trickle in from the online retailer and book publisher, not much has been divulged with respect to the exact nature of the dispute. The general consensus is that Hachette prefers to return to an agency pricing model, which allows publishers to set the prices of their own books. Amazon is adamantly opposed to this switch because the agency model prevents the kind of drastic discounting that Amazon is known for. All of this has ignited commentary among authors, publishers and observers alike. It’s no secret that publishers deem Amazon’s discounting practices and bullying tactics a violation of antitrust laws. Recent debate, however, has focused on whether U.S. regulators tend to agree.

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