Competition

Competition

The company has been controversial for its alleged use of patents as a competitive hindrance. The "1-Click patent"[85] is perhaps the best-known example of this. Amazon's use of the one-click patent against competitor Barnes & Noble's website led the Free Software Foundation to announce a boycott of Amazon in December 1999.[86] The boycott was discontinued in September 2002.[87] On February 22, 2000, the company was granted a patent covering an Internet-based customer referral system, or what is commonly called an "affiliate program". Reaction was swift and negative. Industry leaders Tim O'Reilly and Charlie Jackson spoke out against the patent,[88] and O'Reilly published an open letter[89] to Bezos protesting the 1-click patent and the affiliate program patent, and petitioning him to "avoid any attempts to limit the further development of Internet commerce". O'Reilly collected 10,000 signatures[90] with this petition. Bezos responded with his own open letter.[91] The protest ended with O'Reilly and Bezos visiting Washington, D.C. to lobby for patent reform. On February 25, 2003, the company was granted a patent titled "Method and system for conducting a discussion relating to an item on Internet discussion boards".[92] On May 12, 2006, the USPTO ordered a re-examination[93] of the "One-Click" patent, based on a request filed by Peter Calveley, who cited as prior art an earlier e-commerce patent and the Digicash electronic cash system.[citation needed]

Amazon has a Canadian site in both English and French, but until a ruling in March 2010, was prevented from operating any headquarters, servers, fulfillment centers or call centers in Canada by that country's legal restrictions on foreign-owned booksellers.[94] Instead, Amazon's Canadian site originates in the United States, and Amazon has an agreement with Canada Post to handle distribution within Canada and for the use of the Crown corporation's Mississauga, Ontario shipping facility.[95] The launch of Amazon.ca generated controversy in Canada. In 2002, the Canadian Booksellers Association and Indigo Books and Music sought a court ruling that Amazon's partnership with Canada Post represented an attempt to circumvent Canadian law,[96] but the litigation was dropped in 2004.[97]

In March 2008, sales representatives of Amazon's BookSurge division started contacting publishers of print on demand titles to inform them that for Amazon to continue selling their POD-produced books, they were required to sign agreements with Amazon's own BookSurge POD company. Publishers were told that eventually, the only POD titles that Amazon would be selling would be those printed by their own company, BookSurge. Some publishers felt that this ultimatum amounted to monopoly abuse, and questioned the ethics of the move and its legality under anti-trust law.[98]

In 2008, Amazon UK came under criticism for attempting to prevent publishers from direct selling at discount from their own websites. Amazon's argument was that they should be able to pay the publishers based on the lower prices offered on their websites, rather than on the full RRP.[99][100] Also in 2008, Amazon UK drew criticism in the British publishing community following their withdrawal from sale of key titles published by Hachette Livre UK. The withdrawal was possibly intended to put pressure on Hachette to provide levels of discount described by the trade as unreasonable. Curtis Brown's managing director Jonathan Lloyd opined that "publishers, authors and agents are 100% behind [Hachette]. Someone has to draw a line in the sand. Publishers have given 1% a year away to retailers, so where does it stop? Using authors as a financial football is disgraceful."[101][102]


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