Internet retailing giant Amazon.com came under fire Monday after disclosing that publishers are paying up to US$10,000 to have their books featured on some of the most coveted real estate on the Internet.
The Seattle-based company defended its actions, saying it employs a staff of editors who make decisions "completely independent" of any so-called cooperative advertising payments made by publishers.
"Our basic practice is to recommend only those books we feel are worthy of it," Amazon.com spokesman Bill Curry said. "Our editors are free to reject books that are proposed for co-op -- and do it every day."
But revelations that the company is receiving payments from publishers for featured treatment of certain books drew sharp criticism from rivals, consumer advocates, and independent booksellers.
"I'm disturbed by it," said Richard Howorth, owner of Square Books in Oxford, Mississippi, and president of the American Booksellers Association. "Ethically, it's a pretty shady way to sell books, in my view."
The issue of cooperative payments, which are commonplace throughout the retail industry, is a particularly touchy one for publishers because of concerns about the increasing concentration of power in a small number of publishers and retailers.
"What we're really tremendously afraid of is that a reading society and democracy is jeopardized by narrowing of the distribution of ideas," Howorth said.
On the sales side, a trend that began in the early 1990s with the rise of "big box" bookstores is accelerating now with the emergence of online booksellers like Amazon.com, which likely will sell more than $1 billion worth of books this year in a flat US market.
Industry analysts said that while some bookstores accept payments to feature books in their windows or other high-visibility locations, online retailers are different in part because they have created an appearance of editorial independence.
"Particularly Amazon, with the editorial voice they've developed and the relationship with their customers they've developed, should be diligent not to blur the line between editorial voice and shelf-space purchases," said Ken Cassar, an analyst with Jupiter Communications. "There needs to be a Chinese wall between the editorial voice and marketing."
