Even Amazon can't keep its EULA story straight

When Amazon "sells" you a Kindle ebook, they don't really sell it to you. If you read the fine-print, you'll see that they're waving their hands furiously and declaring that you aren't "buying" the book, but rather "taking a license to a limited set of uses" for the book. Whereas a book that you buy comes with all kinds of rights, such as the right to sell or give the book away (Jeff Bezos: "[W]hen someone buys a book, they are also buying the right to resell that book, to loan it out, or to even give it away if they want. Everyone understands this.") a book that you license from Amazon comes with a very small subset of those rights, as defined by a lengthy and difficult-to-grasp "license agreement."

Despite all the fine print, most of us know that this is a scam. Declaring a sale to be a license is ridiculous on its face (imagine this: you finish a bowl of soup at the deli and when you get to the bottom of it, you find a EULA that says, "By eating this soup, you agree not to attempt to season your own soups in a similar fashion, nor to share this soup with any other person").

It's such a silly notion that even Amazon can't keep its story straight. Take this press-release in which Amazon trumpets that its "customers purchased more Kindle books than physical books." Purchased, not "licensed."

Or consider this ad (courtesy of Elix): "Kindle publications are sold by Amazon Digital Services, Inc." Again, sold, not "licensed."

(Yes, you can purchase a license. But that's not what the copy says. It doesn't say, "Amazon customers purchased limited licenses to more Kindle books...")

It's a rip-off, pure and simple. And Amazon's digital divisions won't let copyright owners get out from under it. When I tried to negotiate the distribution of the Random House Audio edition of my novel Makers through Amazon's Audible store, they refused to allow me to add legal text to the recording telling users that they could make any use of the audiobook that was permissible under copyright, negating their EULA. In other words, Amazon isn't doing this because the publishers insist on it: even when my publisher, Random House, the largest publisher in the world, told them that they didn't want the crazy EULA, Amazon insisted.

Don't get me wrong. Amazon's "hard goods" business is the best ecommerce system in the world. I did half my Christmas shopping there. I buy everything from books to box-files from them. They are customer-focused, efficient, and smart. But I won't buy any of Amazon's digital offerings until they clean up their act and deliver the same customer rights to e-goods buyers as they do to hard-goods buyers.


  1. That’s pretty crappy, that Amazon behaves this way.
    I’ve written in before, and have tried to buy new books in electronic format, but have been thwarted by silly region issues (I’m in europe) so I’ve ended up not buying books. Both Amazon and B&N have this kind of sillyness going on.

    It’s really frustrating being a customer who WANTS to buy things legally, only to have the stores make it so twisted and difficult that torrent sites become a good option. Of course many books on those sites are scanned and OCR translated to text, so errors occur.
    Spotify (and such services) and iTunes have made it easier to buy music than to torrent it. That’s what we mostly use nowadays. We know the quality will be good, we know we can find most of what we want there and we know that people get paid for their work.

    Movies and books need to follow. Heck, books should be simple. Low bandwidth and all that. Just need a good, big library of books with a non-crazy EULA, world wide coverage and reasonable prices (less than $10 per new book). That HAS to be possible. Right?

  2. And THIS is why eBook piracy will go up. With the huge increase in eBook Reader production (and, hopefully sales) more and more people will get angrier about DRM and licensing issues with their eBooks and will turn to piracy to get them.

  3. I was just talking about this this morning. The whole digital distribution field is a total mess and completely out of touch with customers and reality.

    @ arikol You mentioned iTunes making it easier to buy music than to torrent it and I’d have to disagree, iTunes is the scam of the century, mainly because people have bought into it. Effectively you pay more (at least in he UK) for an intangible, lower quality and highly restricted music format compared to a CD which you can do whatever you want with (say put it on your iPod and leave the CD in the car, or living room stereo) and is of a far higher quality. Why on earth Apple doesn’t offer their entire music catalogue in a lossless format is baffling considering storage is practically free these days. On top of this you don’t get anything like the deals you can get in a shop such as buy 3 for £10 etc.

    I really like the idea of eBooks, the advantages are huge in terms of reduced space and less wasted resources but why would anyone pay MORE for something which costs the distributer practically nothing to sell. Then on top of that be unable to lend it to a friend or ultimately sell it on?

    These companies need to realise that we aren’t going to go backwards in terms of our rights; these new formats need to improve the standing of the customer, not try and take them for everything they can. Especially considering how easy it is to get these files at a higher quality and without restrictions through torrents.

    One last thought, I think Apple can get this right, the App store is a good example. Many of the Apps are priced so low that the cost is almost an irrelevancy, however I’m sure this results in far higher sales and so greater profit than if they priced them higher.

  4. @arikol, the region issue is due to authors’ desire for their historic ability to be able to sell English language rights twice. We are part of the problem.

  5. iTunes quality used to be lower and songs used to have DRM. These days it’s 256kbit AAC, no DRM and the vast majority of listeners can’t tell the difference from a CD. Price is a factor, but people pay for convenience, for not having to go to a store, for having it *now*. (Many people don’t even know how to rip a CD, even though it’s about as hard as inserting it.)

    Convenience wins for many people, most of the time. Even if reading a book on my iPhone isn’t as “nice” as reading a paper copy, I have it with me all the time — not the paper copy. Convenience wins.

    All that said, I’m with you on the ebook format. Not buying until it’s portable, transferable and far less restricted. I’d settle for the current iTunes app-sharing model of 5 computers/any number of synced devices so I can share it around my house, though I’m not paying the same price as a paper copy.

    Publishers still want their cake and to be able to eat it. Their major problem is that they can’t get shelf space in bookshops for anything that isn’t a hit, especially after the first year. Suddenly, they have this opportunity with ebooks to keep every book forever available, “in print” and they should be *jumping* at the chance, though they think it’s going to be a small thing. I think/hope they’re underestimating the coming digital reader storm.

    Assuming Apple gets it not too wrong (nobody else has the clout), I’d be happy to never buy a physical book ever again.

  6. The “Steam” digital distribution service for games also has this discrepancy. When you use the “Steam store”, the whole transaction is structured like a purchase, and uses terms such as “Buy” in relation to games (not licences) in all the prominent text. But only the fine print reveals it as a purchase of a licence. And the Steam service explicitly denies you your rights to re-sell, or, transfer your purchases.

    Both book publishers and game publishers hate the second-hand market far more than the pirate market (as it’s real–not just potential–cash flow they get nothing from), and that’s what these restrictions are primarily aimed at.

    Is this the way all digital distribution will trend? How can we do something about this?

    1. You and I have the power of the purse. What you can do about it is not buy what you can’t own.

      My rule of thumb is, would Ray Bradbury have spent his money on one? If not, then neither should you. I’ll be buying ink on paper for, I guess, at least another decade.

    2. Regarding purchases on Steam and other digital distribution gaming publishers, the sale of a license really isn’t all that different from buying boxed retail games. No one ever ‘owns’ software that they purchase via retail/OEM/download channels; you’re always purchasing a license to use the software that comes with an EULA. With retail software you just get physical media and the EULA printed in the manual. Used game shops are technically violating the user license by transferring the licenses through resale, although it’s not something that’s enforced, the same way that casual copying has always been overlooked.

      Tethering licenses to a user account such as a Steam account are an improvement IMHO over more annoying DRM measures such as CD-key verification and the like; in addition, I find that retaining the right to download a copy from the publisher’s servers is preferable to storing/backing-up your own discs which could be physically damaged (granted that the publisher stays in business). That’s one of the conveniences I enjoy about iTunes and the Kindle store, although each service has its drawbacks.

      The main drawback with Kindle books is that they lack the ability to transfer license, so you can’t give it away the way you would with a paper book. And like paper books, an e-book is still a ‘durable good’ (even more so) in that you can extract information and value from it indefinitely. Since you can’t limit the number of copies that are made the way you do with physical media, the easiest way seems to be with associating licenses to user accounts.

  7. Right now, eBooks are simply a rip off. Most computer eBooks are rented for the same price (or maybe 10% less) than a paper book. And you have half the product, double the DRM. It just doesn’t make any sense. It’s incredible that they’re making the same mistakes the music and recording industries already showed them. I agree with Vivan. This is why piracy will go up. And then they’ll blame the pirates for low sales, not their weird schemes.

  8. Part of the problem is the fact that Amazon does not have full control over licensing conditions (as they seem to have with their mp3 store). So different publishers can establish different restrictions on content.

    Contrast this to the situation when Apple introduced the iTunes Music Store. The iPod had already been out for a few years, and people were used to getting content (probably mostly from file-sharing). Apple was in a very good bargaining position to demand that all publishers follow a consistent set of licensing conditions (5 devices/computers, unlimited burning, etc.) Basically, the music industry was desperate to see some income from digital content, and Apple was able to provide a huge market. Even if they didn’t sign on, the iPod would not suffer in value (too much).

    The Kindle, however, is fairly worthless without the store. If all versions had native PDF support, USB ports and SD memory slots (for transferring data and extra storage), it would have value beyond a portal to the digital bookstore.

  9. Conceptualy, there’s nothing wrong with licensing some rathar than selling all of the rights to a work. But it should be CLEAR that you’re not getting first sale and fair use rights for your money. Few people who lease cars are under the misapprehension that they are purchasing the vehicle. I challendge the purveyers of digital media to be just a clear and up front. “As honest as car salesman,” is not a particularly high bar, and Amazon should be able to do that.

  10. @ funwithstuff Ok you might have a point with the iTunes thing, the quality probably is sufficient, and the convince is great. But seriously it would practically cost them nothing extra to include an apple losseslss file option along with the AAC one! So why not do it?

    On top of that. despite the convince its still too expensive compared to play.com or amazon, or even a nice old fashioned record shop (I know not many still around). This I’snt nostalgia (I’d rather buy digital), I simply want the vast savings made through a far cheaper delivery method to be passed proportionately down to the customer, surely that fair?

  11. I simply want the vast savings made through a far cheaper delivery method to be passed proportionately down to the customer, surely that fair?

    I want that too, but it isn’t necessarily any more or less fair than what is happening now. There are lots of things that have demand-driven pricing rather than supply-driven pricing. (diamonds, fashion items, etc.). If two parties chose to participate in a transaction, and there’s no deception or misunderstanding involved, the price is fair by definition.

  12. I’m not defending the practice, but why should Amazon not think it can get away with this, when software has been “sold” this way for years, and nothing has happened to challenge that fact?

    If you’re going to be consistent, boycott buying software, too. At least there you do have an alternative to breaking the law…

  13. @ shadowfirebird You’re absolutely right, its just disappointing to see these practices slowly creeping into all products. Especially when i really want to like eBooks if they would just stop hamstringing them…

  14. It’s particularly disappointing given Amazon’s positive role in killing off DRM on music. Maybe the moral is that the marketplace for e-books needs some competition. Did I hear someone say “Apple”?

  15. This whole scam began with software. It was absurd then and continues to be absurd with every subsequent application of a “license” to any type of purchased goods.

    In the good old days CONSUMERS purchased goods and services. This was reasonable because consumers use the goods they purchase the way they want, because their use is personal, or non-commercial.

    CORPORATIONS purchased licenses. This was reasonable because corporations use the licensed goods in the process of generating money. Also, as part of the cost of doing business access to legal services is generally a good idea. Corporations purchasing a license would have their lawyer to ensure terms are reasonable and possibly negotiate better for the specific use.

    Consumers can’t afford to hire a lawyer every time we purchase something. If it comes to the point that becomes necessary those of us without law degrees will undoubtedly stop purchasing the goods that require this level of absurdity.

    Since we lack lawyers, consumers click “I agree” on the EULA and then do what we want anyway.

    For myself, if I wanted a digital reader I would not want a kindle because it’s not portable. Oh sure, it’s small and it fits in your bag. So does my cel phone. The difference is when my cel phone is ripped off, it’s only a matter of a few hundred dollars.

    If my kindle is full of unback-upable material that has cost on average ten dollars a pop and I get caught in a torrential downpour (like my digital camera) or it’s lost (favorite scarf) or stolen (cel phone) the cost of the machine is the least of it. The cost of the content is enough to send my kid to university for a year. To me, that makes the kindle not portable.

    So I’ll stick to paper books, thanks. Their loss isn’t enough to bankrupt me.

  16. @shadowfirebird Exactly! That’s precisely the idea behind open source software and open e-reader formats.

    Linux plus calibre plus sites like ManyBooks.net and Gutenberg.org make a completely DRM-free ebook experience possible.

  17. @scottbirse #3
    I agree that itunes pricing is high, but the convenience is also high. It allows for impulse buying very easily. I’ve never bought a DRM’d file from them, only the higher quality, non-DRM’d files. They improved a lot when they started selling non-DRM’d files, world of difference. I see that you responded to another post stating this, but just wanted you to know that I understand what you mean. As for the apple lossless, it would be nice, but personally, I have professional quality studio gear which can output audio in WAY higher quality than most computer setups, and I can hardly hear the difference between their high quality stuff and a lossless file, at least with most commercial material.

    @churchill #2
    Yeah, figures, thanks.

    To others:
    I HAVE been talking with my wallet. I also move around a bit and REALLY don’t want tons of books again, I sold and gave away most of my books last time I moved between countries. I really want usable, non-DRM’d books, text files and such. Right now my only option for most of that stuff is on torrent sites. In a precious few cases I can buy them, but usually at illogical prices AND with DRM AND stupid EULAs, making them a bit useless.
    So torrent it is.

    Not pretending to be in the moral right, just practical issues here. And actually sometimes feel bad about not paying. Then I think about WHY I don’t pay, and usually come to the conclusion that the publishing houses should be ashamed of themselves, even more so than I.

  18. Well, from a legal perspective it kinda makes sense.
    Obviously they want to sell as many licenses (not books) as possible to increase sales and maintain some kind of power over the ebook licenses. If they DID acknowledge that the object of the sale was a book (or ebook), and not a license, they would have troubles enforcing anti-sharing policies because normally, a transfer of property on a movable (digital goods, for example) implies a transfer of the right of alienation (or abusus in civil law jurisdictions).
    That right of alienation basically means you have the right to do whatever you want with that good; give it to someone else, share it, etc.
    Now we all agree this sucks. I think there might be two reasons why they’re not “selling” books, but rather providing a license service (or whatever they call it). First, increase sales. Second, you can’t sell what you don’t own. Amazon might only have the right to sell licenses from publishers, not the right to sell books. It’s a complicated concept to imagine, because there is no concrete difference between an ebook and an ebook license, but legally, Amazon probably acts like a licensing agent for publishers, not a retailer of ebooks. That’s usually what happens with digital goods (music, films, books), because it would make no sense for Amazon to purchase an inventory of ebooks (does that even exist?) and try to resell it for a profit.
    So yeah.. it sucks but there’s a reason for everything.
    Plus, if you’re not happy about it, go to a bookstore or the public library and get a real book :)

    (oh yeah and there’s the whole issue of being able to consume intellectual property more than once simultaneously when sharing digital files. Not that it’s a problem, but it definitely has an economic value for publishers and it hasn’t been figured out across the board)

  19. “many books on those sites are scanned and OCR translated to text, so errors occur”

    Sadly, many of the 7.99 copies on Amazon are OCR too. Just purchased “In Cold Blood” and unless “blarning” is a word Amazon is using OCR too. Although I could be blarning the wrong people.

  20. Here’s a thought experiment:

    1) Everything that can be distributed digitally will be (for the majority of cases)
    2) All forms of middle-men will eventually be replaced by discovery services that run on affiliate type fees, with the majority of revenue going directly to the creator(s) of the digital work
    3) File-sharing is impossible to stop
    4) A second-hand digital file is identical to a ‘brand new one’. Obviously.
    5) DRM dies

    What does a second-hand market in digital goods look like under such assumptions?

    I contend that any remaining inconvenience of obtaining something for free ends up priced into the second-hand market.

    Thus you have the choice to buy direct from the artist, find a way to get it for free, or effectively pay somebody else a negligible amount to do so.

    Does that seem like a good situation to end up in? If not, is there any way it could be avoided?

    If we’re to navigate any kind of prudent path through the ongoing digital revolution, I think it’s more useful to think through this kind of argument than any kind of appeal to the “good old days”. The good old days are gone and will not come back. You can’t stop progress.

  21. “Don’t get me wrong. Amazon’s “hard goods” business is the best ecommerce system in the world. I did half my Christmas shopping there. I buy everything from books to box-files from them.”

    Cory, this is your problem right here. I know you are an urbanite and love local community, so how can you put local businesses out of business by doing half of your shopping with Amazon?

    This goes for books too. Amazon et al. are centralizing the publishing business, and the rise of ebooks furthers this process. When you bought from Pages not only where you contributing to your community but you were also “owning” something.

    You are not hurting for money, so what’s with giving your money to this large multinational for things like “box-files”?

  22. Hmmm. This is why I prefer traditional printed books. In general I don’t like having to read ebooks anyway, but if I have to send it to myself some where I tend to scan in my book and have a personal electronic copy whether or not it’s legal. Similarly I tend to buy old fashioned cds and make copies for myself of them to put on my mp3 player. If you think about how ridiculous these kinds of things are it’s enough for some one like me to say screw it. The convenience of downloading information over having a copy of it in a format people aren’t so novelty-challenged about is next to nil for me.

    Next step: boycotting toll roads.

  23. Is Amazon’s hard goods business the “best ecommerce system in the world?” I would argue against that.

    Amazon now relies too heavily on third party merchants of incredibly varying quality and reliability. Their shipping times are often wildly inaccurate because they leave a “gotcha” in the form of a packaging time that does not count against shipping.

    I would say that Amazon are very vulnerable. An e-retailer with enough clout who duplicated the Zappos’ model could rapidly hurt Amazon particularly in their core book business. If Borders or B&N offered free overnight shipping (even at a slightly inflated book price) they could skim off the cream of Amazon’s customers.

    1. Well then I wouldn’t boycott them there :P

      That sad truth is that I don’t boycott them here. I just think I should.

  24. Buying an actual book and buying a set of zeroes and ones is not the same thing. You can make a hundred copies of those zeroes and ones with a click of mouse, at no cost to yourself. Making a copy of an actual physical book requires larger sums of money and time.

    The paradigm is completely different, and obviously companies are having a hard time dealing with what to do about these differences. Trying to say they are the same animal and making silly comparisons between the two isn’t productive. It’s pretentious and annoying.

  25. @Vivian 2

    No, pirating will go up because people don’t want to pay for books. Just as pirating went up because people didn’t want to pay for music. There were some who were reacting to the RIAA and money not going to artists (like many BBers), but mostly people just don’t want to pay for stuff they can get free. (Music was expensive and mostly crappy in the 90s, too. What changed during the last decade? You could get it for free.)

  26. We need to start a movement to have the term “buy” legally defined. We have laws about false advertising, bait & switch, and those jerks who sell photos of iPhones on eBay – why not have some requirements about how you sell licenses? This is my only real gripe about this type of thing.

    I don’t mind them renting you books or music as long as they are clear about what’s going on. For me to participate, however, the price needs to be in line with the trade-offs you get in a closed DRM format. The have no real shipping costs (a few cents to Sprint for the bandwidth), no printing costs, the books don’t compete with new sales (resale or lending), they can stay “in print” forever without any warehousing, there’s a chance you’ll buy it again in print, etc etc etc… All these tradeoffs and you can usually buy the paperback for $1 more (it’s often cheaper than the eBook version).

  27. ‘It’s such a silly notion that even Amazon can’t keep its story straight. Take this press-release in which Amazon trumpets that its “customers purchased more Kindle books than physical books.” Purchased, not “licensed.” ‘

    Here’s my prediction (you read it here first): Amazon will redefine “Kindle book” to mean “a license to read an electronic version of a physical book” or some such, thus rendering their “purchase” statistics 100% accurate.

  28. I just want to make sure, that as someone who has purchased a lot of kindle books, that I can at least back them up and format shift them, as my gen 1 kindle is starting to show its age. I don’t quite trust that amazon will always keep copies of the books I purchased.

  29. Currently when I buy a book for my kindle, I save =~2-6 dollars from the print version. I’d find that a fair deal if the electronic version was my possession like the book was (to loan out, resell, or whatever the hell I wanted). As a *LICENSE* I find the price pretty ridiculous, considering that the manufacturing and distribution costs have been eliminated.

    The amazon kindle interface is a joy for convenience, though- and the pricepoint is in the range that torrenting doesn’t seem such an obvious tradeoff. If one found the price point acceptable, and the convenience nice- and one had no issues with violating the EULA- then one might be glad to know that the kindle drm can be easily stripped off with a couple of python scripts easily found via google.

  30. Sell us things without DRM
    Or we will just keep copying them!
    Copyright should last for just 20 years
    Or we’ll break the law peer to peer!
    Only customers are harmed by restrictions like these
    Pirates will always just do as they please!
    DRM is not the thing to do
    The greatest threat to your industry is you!


  31. @JordanF83 #27

    Interesting point. One then could think of the paper format of a book as being the DRM itself. When you buy a physical book, the DRM is in a more physical, easy to understand format. Easy to transport, copy, lend, sell, but hard to copy. The ultimate DRM.

  32. Here’s my prediction:
    Slowly but surely, Ebooks will become more popular than Hard copies. Maybe then writers will sell us their books directly rather than through publishers. Maybe some channel would be introduced which would make this possible and convenient.
    How much publishing would a publisher do if the content is made available through electronic media only?

  33. Easy to fix, buy ereaders that can read open formats. Buy ebooks from authors directly (yes some authors do sell directly)or small publishers who don’t use DRM. Cut out the middle person. Hurt them where it counts, their pocket books. They will eventually get it.

  34. If I buy a book for $20, I can read it, then lend it to 10 friends to read. Average cost per reader: $2. If I ‘buy’ an ebook for $15 (wow, what a discount!) :-) only one person can read it. Average cost per reader: $15. Using this logic you can see that the ebook business is nothing more than a huge money grab for the publishing industry.

  35. DRM-free, cheap e-books: webscription.net

    Not an employee, just a customer (I have more than 300 webscription e-books).

  36. baccilus — some authors already are! For CJ Cherryh, Jane Fancher, Lynn Abbey, see http://www.closed-circle.net/ (just opened, the shelves are still being stocked). Their policy — You buy it, it’s yours. No DRM.
    I also second the recommendation of webscription.net.

  37. Funny thing this book “ownership” – as someone who moves from place to place on a fairly regular basis I’ve become increasingly aware of the cost and effort required to move my modest library, and have had several purges to thin it down to a reasonable size. With the advent of eBooks, my prayers should have been answered: after all, there’s theoretically unlimited storage of stuff I want to read and hopefully as the technology evolves I’ll be able to read “my” books for years to come (but that’s not the issue here). And when the time comes for me for me to shuffle off this mortal coil, my survivors will not be faced with the daunting prospect of finding a new home for something resembling the Library of Alexandria.

    However, while I am in possession “my” eBooks, I want guaranteed, unequivocal access to them, and no-one in another country should have the power to remove them from my storage device just because it doesn’t fit in with the current political/idealogical view in that jurisdiction. If Amazon et al can assure me of that – in writing – then I’m really not bothered whether I own the book or subscribe to its licence!

  38. Amazon is the avowed enemy of book readers’ freedom.
    When you buy physical products, Amazon still abuses you
    by making you identify yourself.

    You don’t need to surrender to this.
    There are lots of other places to buy physical products.
    And unless you’re a slave to appetites, you can
    as a last resort do without them.

  39. The good news: the courts have ruled that it doesn’t matter if they call it a license or not. If they don’t expect it to be returned, it’s a sale.

    Vernor v Autodesk established that buyers have the right to resell software, regardless of the EULA; sellers can’t contract terms like “you can’t transfer ownership of this purchase.”

  40. There is another business model possible. Amazon and the authors can make the ebooks substantially cheaper than the hard copy books, both due to lower production costs and lower license rights. If there is a SUBSTANTIALLY price difference, we know we are getting a REDUCED VALUE and we are OK with it. Unfortunately, they are now pricing these ebooks close to the hard copy, so most of the time, I do not buy them and go for the hardcopy instead. Amazon and the authors and publishers need to really think about how to make this work for avid readers, since by the 80-20 rule, that’s a large part of their market..

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