updated 06:10 pm EDT, Mon April 30, 2012
Bissinger hurt by Apple, Amazon no-lower-price war
The insistence on having no lower prices at e-book stores has had a conspicuous if brief casualty, according to an account. Friday Night Lights author Buzz Bissinger shared with the New York Times that he had had his sequel book, After Friday Night Lights, pulled by Amazon after it was chosen by Starbucks as a Pick of the Week and given away through Apple's iBookstore for free through redemption codes. Amazon's automatic price check forced the Kindle price to zero, leaving online publisher Byliner.com no choice but to pull the book if it didn't want Bissinger to lose money and jeopardize the Starbucks deal.
The book should be back on May 1, once the Starbucks promo ends. While Byliner had been concerned the price drop might happen, it hadn't counted on a redemption code-based transaction setting off an automatic price cut.
Bissinger's experience underscored the consequences of a "most favored nation" clause in effect at not just Amazon but Apple as well. By each requiring that their own stores get the best possible price, it creates difficulties for any company that tries to offer a sale, even if through codes that don't affect all users or the regular price. Amazon's lack of similar promos technically prevents the reverse from being common, but Apple would likely require discounting the price if a publisher tried a similar deal for Kindle users.
The US Department of Justice is currently suing Apple with the hope of ending these terms on the iBookstore. Amazon isn't facing a reciprocal deal and could create problems if it can set prices freely while Apple is prevented from doing the same.
Apple is accused in the lawsuit of artificially raising prices in collusion with publishers. Amazon has itself been criticized for price dumping, or charging at or below cost, to build market share in a way that sets unrealistic expectations for prices.