Amazon Cutting Off Japanese Publishers; Possibly Burning Bridges
Summary of “Amazon’s Dispute with Japanese Publishers Intensifies”
By Alexander Martin (WSJ online) October 3, 2016 8:42 a.m. ET
Amazon has cut over 1000 titles from its all inclusive subscription service (where customers get unlimited access to as many titles as they want and the publishers collect a fee based on how much of their material s read) (Martin). The publishing company (Kodansha) is one of the largest in Japan, and believes that Amazon did not have the right to cut them off. Amazon Japan has had a history of shady dealings with publishers by allegedly trying to force them to set their prices lower on their site than that of Amazon’s rivals (Martin).
This is interesting because Amazon obviously has lots of market power both in the United States and overseas, and it may be going to their heads. If they really are in breach of contract in removing he books from their service without legal recourse, they are setting themselves up for a possible lawsuit and (at the least) damage to their reputation. Since this Japanese distributor is the largest in Japan, it can be assumed that they also have a lot of market power on the supplier end, and they could decide to do all their business elsewhere. Even if Amazon had the legal recourse to take the titles off their service, it would have been better for them to give the publisher notice so this wouldn’t be as much of a shock and possibly minimize the damage to their reputation. With a large international firm like Amazon, any dealings they have overseas will likely affect the reputation of the company in its entirety, having global ramifications. Companies should consider the long-term when making these decisions and be careful not to potentially burn bridges, regardless of their market power.