During the third day of the U.S. Department of Justice’s antitrust suit against Apple, a high ranking Amazon executive said the agency model used by Apple and five major book publishers was meant to slow down the success of online retailer’s popular e-book reader. According to in-court reports from Reuters, Amazon’s vice president of Kindle content, Russell Grandinetti testified that his company told publishers it may have to modify business relationships as a result of adopting the agency model.
Grandinetti continued by saying that publishers came to Amazon with an “ultimatum” after reaching deals with Apple in 2010, demanding that they be allowed to set e-book prices on Amazon. Unless an agreement was made, Amazon would have been barred from selling Kindle-ready e-books on the same day that hardcover versions of the titles were released according to him. Citing a particular offer from MacMillan in 2010, Grandinetti said the publisher’s CEO, Jon Sargent, offered a choice between moving to an agency model or being forced to delay an e-book’s sale until seven months after a hardcover version had been on the market. He said the following regarding the matter:
I think I expressed how unpalatable the choice presented was.
They yelled and screamed and threatened. It was a very unpleasant meeting.
We wanted to avoid losing most or all of their titles from our store.
If you're going to do this, we have to look at the whole business.
We’ll have to wait to see how the case unfolds.
Source: CNET, Reuters