Is Amazon's Kindle Lending Library a breach of contract?
Amazon released its Kindle Lending Library earlier this month to great fanfare. Amazon Prime members can borrow e-books from among more than 5,000 titles, including “Water for Elephants,” “Moneyball,” and “A Reliable Wife.” Not a bad deal if you’re a Prime member.
The problem? Many of the authors of the books included in the lending library – like “A Reliable Wife’s” Robert Goolrick – found out at the same time that users did that Amazon was offering their books for free. Amazon says it is entitled, under contracts it entered into with select publishing houses, to include titles in the Lending Library. Authors are angry that Amazon included titles without telling them, but because the online books behemoth sells so many books for publishers, it’s a delicate situation.
So begins a contentious contract battle between authors, publishers, and Amazon that’s causing quite a stir in the books trade.
“Amazon ... appears to be boldly breaching its contracts with these publishers,” said the Authors Guild, which represents writers, in a statement on its website. “This is an exercise of brute economic power.”
The “Big Six,” or six largest US book publishers – Random House, Simon & Schuster, Penguin, HarperCollins, Hachette, and Macmillan – refused to participate in Amazon’s Lending Library, as we pointed out in an earlier blog. The next tier of publishers, according to the Authors Guild, also refused.
"No matter,” writes the Guild. “Amazon simply disregarded these publishers' wishes, and enrolled many of their titles in the program anyway. Some of these publishers learned of Amazon's unilateral decision as the first news stories about the program appeared.”
According to the Guild, Amazon believed it didn’t need permission to include these books, that it is simply required to pay publishers the wholesale price of titles that are downloaded.
“From our understanding of Amazon’s standard contractual terms,” writes the Guild, “this is nonsense – publishers did not surrender this level of control to the retailer.”
What’s more, the Guild says, even publishers that did sign on to include their books in the Lending Library are in breach of contract because they don’t have the right to offer their books without seeking prior approval of the books’ authors.
Though it’s defending its decision to include titles in the Lending Library as per its contracts with individual publishing houses, Amazon has yet to respond at length to these accusations.
As the Guardian pointed out, in its announcement about the Lending Library, Amazon did say that the titles are from a range of publishers under a "variety" of terms. “The "vast majority" are there following an agreement with the publishers to include the books for a fixed fee, the Guardian quotes Amazon as saying, “while "in some cases", Amazon said it was purchasing the title under standard wholesale terms each time it is borrowed, "as a no-risk trial to demonstrate to publishers the incremental growth and revenue opportunity that this new service presents.”
From our perspective, it’s a difficult situation any way you cut it: Either authors and publishers relinquish more control to Amazon or they go after the largest online books retailer to whom they probably owe many of their sales. This may be the beginning of a long legal fight.
Husna Haq is a Monitor correspondent.
