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Market power utilized by Amazon in contract disputes

When it comes to internet product sales, Amazon is a name that is certainly familiar to many New Yorkers. The name isn’t just well known from the consumer side of things, businesses that utilize the market power of the online sales distributor to boost their own profits know that a relationship with Amazon can be beneficial.

A contract dispute is currently the basis of bottom line concerns for both the publisher Hachette and film provider Warner Home Video. At the center of both of these disputes isn’t a breach of contract, but instead negotiations over contract terms.

Where Hachette is concerned, Amazon released a statement about the current suspension of the practice of preordering the publisher’s titles. The statement related the fact that the relationship with suppliers does impact the consumers. “Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers in the medium and long term,” the company noted in the statement.

An official statement concerning the Warner dispute had not been released by Amazon at the time of the WIRED report. However, the website TheDigitalBits speculated about the preorder sales of hard-copy films that had also been suspended in this case due to negotiations.

There’s no doubt that relationships are important for businesses, and the terms that the parties negotiate together are very carefully chosen for very specific reasons. When one party fails to keep their end of the bargain, it does impact the other party.

As important as it is to have a business law attorney on your side during negotiations, it is just as, if not more important, to ensure that your attorney is well-versed in New York law when a dispute over that contract arises.

Source: ars technica, “Amazon flexes its muscles again in new contract dispute with Warner Bros.,” Casey Johnston, June 11, 2014

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