The Nameless Horror

KDP: licensed to ill

While we’re talking Amazon, and while Apple and publishers are locked in somewhat ludicrous court battle over agency pricing and collusion (as if they needed to collude to agree that Apple’s long-standing standard practice was more attractive than Amazon’s shit-on-a-stick; that’s another argument for another day), let’s get legal for a moment.

This isn’t going to turn into an Apple vs. Amazon post - really - but I need to mention this for context. A while ago, when iBooks Author was released, half the internet briefly took up arms against perceived wrongs in the iBooks licensing agreement, believing, wrongly, that it enforced a single-point-of-sale rule on books listed through iBooks. Apple quickly amended the license to emphasise that the restriction applied only to .ibooks files created with iBA, and the controversy died.

But what of Amazon’s license agreement for Kindle Direct Publishing? There certainly hasn’t been the same level of uproar over it - indeed, most KDP authors seem happy with their terms. Odd, this, because it’s a very strange beast.

Most of us know about the “Matching Competitor Prices” rule in the KDP pricing terms. The rule has changed somewhat over the past year; it used to be a rule in the license itself that you guaranteed not to list something for sale cheaper anywhere else, and if Amazon found you had they could drop the price to beat it.

(As per this similar dissection of the agreement, the old version of Section 4 was:

You must set your Digital Book’s List Price (and change it from time-to-time if necessary) so that it is no higher than the list price in any sales channel for any digital or physical edition of the Digital Book.

But if you choose the 70% Royalty Option, you must further set and adjust your List Price so that it is at least 20% below the list price in any sales channel for any physical edition of the Digital Book.

That clause has since been dropped.)

It all happens now in the new section 5.3.2:

To the extent permissible under applicable local laws, we have sole and complete discretion to set the retail price at which your Digital Books are sold through the Program.

You provide a list price, but if Amazon need to sell cheaper “to match a third party’s sales price for any digital or physical edition of the Digital Book” they can do so. (Whether or not this affects your royalties depends on whether it was a 35% (it doesn’t) or 70% (it does) royalty book.)

So what exactly is a “Digital Book” as defined by this license? Apple very neatly confined their more draconian requirements to the .ibooks file created by their software. Is this something similar? (If you’ve never used KDP, you upload a .mobi or .epub file.) What’s Amazon’s take on this?

Badly defined.

This Agreement is a binding agreement … with respect to your participation in the Program and your distribution of digital content through the Program (all such content, “Digital Books”).

Content. But what, exactly, is the content by which a book is defined? If you sell a short story through Amazon for $0.99 (or for free via Amazon Select), and then include that same story in a collection at a higher price, does this give them leave to match the collection to the lower price? (Not that they need your permission, as the agreement makes clear, but they pay lip service to justifying such decisions in terms of competition with either other parties or other national versions of Amazon.)

(While we’re at it on content, let’s not get into the business of their actual content guidelines, which make the recent Smashwords erotica kerfuffle look tame. (And again I’d point you to the third part of the ePublish a Book article for why it’s especially bad.)

To use an analogy, if you sold a regular, a Blu-Ray, and a collector’s super-special director’s cut special edition of a movie under the same terms, is the content the same? The latter two certainly share elements of the same content, but the Blu-Ray “contains” massively more data (which, if a film is a series of images means a lot more “movie”) and the special edition has all sorts of extra material. In both cases the content of what’s on the disc is very different. Each, one might say, should be a different Digital Book under the license terms. What constitutes an “edition” of content isn’t defined.

(They might argue that both were different editions of the same thing, and with at least some justification - but my point is that the definitions they use are missing or totally inadequate. And open to abuse by Amazon, while if they monkey with your pricing it’s your earnings that take the hit.)

So far, so economics, and maybe I’m making too much of it. It’s not the weirdest part of the agreement, though. That’s this:

7 Confidentiality. You will not, without our express, prior written permission: (a) issue any press release or make any other public disclosures regarding this Agreement or its terms; … [a lot of stuff about Amazon Confidential Information which means, apart from anything else, anyone discussing their sales figures without prior written consent from Amazon is technically in breach of contract] … Without limiting the survivability of any other provision of this Agreement, this Section 7 will survive three (3) years following the termination of this Agreement.

This agreement, as previous linked, is a publicly available document. A publicly available document that its signatories are forbidden from discussing under what is effectively a lengthy NDA or face termination of their account (or, in theory if the expense was justified, legal action) if Amazon object at all because they’re breaching their contract.


I’ve never had anything like that in a contract I’ve signed with a publisher. There’s no such clause in the contentious iBooks Author license. Quite why it’s in here in the form it is… well, I’m baffled. I’m also completely unable to think of any happy, cuddly reason to have it there in any form at all.

(Bear in mind that this is an agreement which - in theory at least (I doubt it’d survive a court challenge) - can be changed for anything other than rights & royalties at any time, effective immediately, without Amazon needing to notify you directly; the onus is on the user to check the terms haven’t changed, and continual use of the program signifies acceptance of all changes whether you’ve noticed them or not.)

This is the glorious author-friendly, reader-friendly, digital future. Hooray.