They were a team, once. In the mid-1990s, the fledgling e-retailer Amazon and the major New York publishing houses—the Big Six, as they were then known—professed themselves partners in a new era of online bookselling. One senior executive recalls Amazon’s founder, Jeff Bezos, announcing his enthusiasm for their common cause. “I remember sitting at a conference table with Jeff telling a handful of us about what he wanted to do,” says the executive, who asked to remain anonymous. “We said, ‘That’s great.’” And for years the partnership was mutually beneficial. As Grove/Atlantic’s president and publisher Morgan Entrekin conceded back in July, at a forum at the New York Public Library (NYPL), Amazon provided “a smooth transition to digital” that kept publishers happy: “It was primarily that there was a reliable vendor; we didn’t have piracy problems, and we got paid decently.” Good times, those.

But that age of convivial cooperation seems to be over, replaced by accusations and acrimony. For much of 2014, Amazon and Hachette Book Group—one of the Big Five publishers, as they’ve been known since the 2013 merger of Penguin and Random House—have been locked in a hostile public dispute over e-book pricing that some view as threatening the fragile ecosystem of the book industry, which includes writers, readers, publishers, brick-and-mortar bookstores, and online book retailers. On the simplest and most immediate level, Amazon wants to be allowed to sell e-books more cheaply, which it argues will benefit readers and lead to increased sales and higher royalties paid to writers. Hachette, whose divisions include Little, Brown and Grand Central Publishing, among others, begs to differ. (Although Amazon and Hachette have refused to grant most media interviews about the details of their ongoing negotiation—both declined to comment for this article—they have issued statements summarizing their positions.)

Is the current dispute just about e-books, or does it have more fundamental, perhaps existential implications? “In the publishing business, people tend to think you’re either going gangbusters or you’re on your way to death, but in reality, people are just evolving,” says Edward Nawotka, editor in chief of the trade journal Publishing Perspectives. “It’s like marriage. Husbands and wives will blow up at times, and the smallest, most insignificant thing can start a fight that appears to be the be-all and end-all. But people are just evolving. It’s the small stuff that makes you crazy.” Others, however, tend to view the Amazon-Hachette fight as less of a lovers’ squabble and more of a prelude to a real crisis that could damage American literary culture by crippling traditional publishers’ ability to publish books with great artistic merit or scholarly value but far lower commercial prospects than more popular books. “Publishers don’t make a lot of money,” the megaselling thriller writer James Patterson said at the NYPL forum. “The great fear for me is that if [traditional publishers] get squeezed down any more than they’re getting squeezed now…they’re not going to have money to bring authors along, they’re not going to have money to buy [books like] Infinite Jest.”

In this way of thinking, the dispute is about far more than the price of e-books; it’s about the future of literature itself. Some fear, for example, that Amazon’s drive to increase its already dominant share of the e-book market could spill over into hardcovers, ultimately depriving traditional publishers of a sustainable business model and making it impossible for them to offer advances that many authors depend upon. And if Amazon continues to increase its market share by underselling its competitors (including chain and independent bookstores as well as other e-retailers), many believe that it will eventually become effectively a monopoly, concentrating unprecedented power in the hands of a single corporation—one that treats books as commodities rather than as intellectual capital whose intangible value to the culture transcends economics.

“Perhaps I’m biased, but I think that books are more than commodities like vacuum cleaners," says Amy Berkower, a leading New York literary agent and a member of the board of Poets & Writers, Inc. “I don’t know the terms of the Hachette-Amazon dispute, but I suspect Amazon is seeking more than lower e-book prices, and I fear they are asking for greater discounts that will seriously affect the already slim profit margins on which publishers operate. Unlike Amazon, publishers can’t depend on other products like vacuum cleaners to pay the bills. If their profit margins are seriously diminished, they won’t be able to afford to pay the kind of advances that finance serious works of fiction and nonfiction. I’m all for self-publishing, lower prices, and higher e-book royalties, but not at the expense of destroying a model that, however faulty it may be, provides the capital for books that require years to research and write.”

Whether such a scenario comes to pass or not, only time will tell. In the short term, Amazon argues that e-books should be cheaper because they cost less than physical books to produce. Furthermore, they say, cheaper e-books will strengthen, not harm, the culture of reading. “For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99,” the company stated in an open letter to readers. “So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. The important thing to note here is that at the lower price, total revenue increases 16 percent. This is good for all parties involved: The customer is paying 33 percent less. The author is getting a royalty check 16 percent larger and being read by an audience that’s 74 percent larger…. The total pie is bigger.”

But as book-industry observers point out, this formula is unlikely to apply to many books, such as literary novels, with great cultural importance but far lower commercial expectations than popular or genre fiction. “What Amazon says might be true for some writers, but it’s not necessarily going to be true for all writers,” says Roxana Robinson, president of the Authors Guild—the nation’s leading professional association for writers—and the author of eight books, including the novel Sparta (Sarah Crichton Books, 2013). “That means if their sales don’t increase, they’ll just get a drop in revenues. So for Amazon to say they’re doing this to benefit writers, it doesn’t ring true.” And one publishing executive at a Big Five house, who asked to remain anonymous, calls Amazon’s position on e-book pricing “disingenuous at best, not to mention a fundamental misunderstanding of the marketplace. There are costs associated with e-books. It’s true that the profit margins are better on e-books, but e-books are not published in isolation. E-books are published in tandem with physical books, which are very costly to produce.”

In August, Michael Pietsch, the former Little, Brown editor and publisher who is now Hachette’s CEO (and is also a member of the board of Poets & Writers, Inc.), responded to Amazon’s statement with his own open letter. Hachette’s e-book prices are far below those for print books, he noted, with more than 80 percent of its e-books priced at less than ten dollars, and the prices for e-books are lowered when the paperback version of the original hardcover is published. “We know by experience that there is not one appropriate price for all e-books, and that all e-books do not belong in the same $9.99 box,” he wrote. “Unlike retailers, publishers invest heavily in individual books, often for years, before we see any revenue. We invest in advances against royalties, editing, design, production, marketing, warehousing, shipping, piracy protection, and more. We recoup these costs from sales of all the versions of the book that we publish—hardcover, paperback, large print, audio, and e-book. While e-books do not have the two- to three-dollar costs of manufacturing, warehousing, and shipping that print books have, their selling price carries a share of all our investments in the book.”

The single most controversial aspect of the current dispute has been Amazon’s tactic of using sanctions against Hachette’s writers as leverage to force concessions from their publisher. For more than six months, Amazon has targeted Hachette authors by removing preorder buttons (which is more significant than it might appear, since publishers factor in preorders to determine their print runs), slowing shipping times, refusing to discount some books and directing readers to competing titles. The move has outraged many traditionally published writers, including members of Authors United, a group led by Douglas Preston that in August purchased a full-page ad in the New York Times calling on Amazon to stop putting writers in the middle of its battle with Hachette. About nine hundred writers signed the statement, including household names such as Stephen King, James Patterson, John Grisham, Scott Turow, Nora Roberts, and Suzanne Collins, along with Sherman Alexie (who went on The Colbert Report to discuss the dispute with Stephen Colbert, a Hachette author), Paul Auster, Madison Smartt Bell, Michael Chabon, Andre Dubus III, Jennifer Egan, Mary Gaitskill, Mary Gordon, Allan Gurganus, Siri Hustvedt, Maxine Hong Kingston, Dennis Lehane, Ann Patchett, Scott Spencer, and Donna Tartt. “As writers—most of us not published by Hachette—we feel strongly that no bookseller should block the sale of books or otherwise prevent or discourage customers from ordering or receiving the books they want,” the group said. “It is not right for Amazon to single out a group of authors, who are not involved in the dispute, for selective retaliation. Moreover, by inconveniencing and misleading its own customers with unfair pricing and delayed delivery, Amazon is contradicting its own written promise to be ‘Earth’s most customer-centric company.’... Without taking sides on the contractual dispute between Hachette and Amazon, we encourage Amazon in the strongest possible terms to stop harming the livelihood of the authors on whom it has built its business. None of us, neither readers nor authors, benefit when books are taken hostage.”

The Authors Guild has also officially not taken sides in the dispute, but most of its leadership—including Robinson and co–vice president Richard Russo—deplores what Robinson calls Amazon’s “punitive and intimidating” tactics. “It’s the dirtiest kind of dirty pool,” says Russo, whose novels include the Pulitzer Prize–winning Empire Falls (Knopf, 2001). “Amazon and Hachette may both be ruthlessly pursuing their own interests, but Hachette isn’t forcing Amazon to abuse authors.”

Amazon’s treatment of Hachette writers has been widely condemned by a wide swath of authors, including Louise Erdrich, author of the National Book Award–winning The Round House (Harper, 2012) and the owner of Birchbark Books & Native Arts, an independent bookstore in Minneapolis. “This a form of blacklisting,” says Erdrich, adding that she’s particularly concerned by the prospect of Amazon becoming a monopoly in all but name. “Allowing one company to get so big that it controls all of the information is dangerous,” she says. “Do we have the freedom to speak and write as we wish? Presently. But if we allow one distribution point, we have a dangerous bottleneck. Amazon is basically holding the books, the information, the writers, the editors, and all who contribute to the book world, hostage.” Entrekin, at the NYPL forum, issued a similarly dire warning. “We’re concentrating the flow of information in our society into the fewest hands ever in the history of the world,” he said. “That’s not a healthy thing, for all the obvious reasons.” 

In its open letter, Amazon responded to criticisms of its sanctions against Hachette writers by pointing the finger back in Hachette’s direction. “We recognize that writers reasonably want to be left out of a dispute between large companies,” the company’s book team said in a letter to readers. “Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles in our store. Since then Amazon has made three separate offers to Hachette to take authors out of the middle. We first suggested that we (Amazon and Hachette) jointly make author royalties whole during the term of the dispute. Then we suggested that authors receive 100 percent of all sales of their titles until this dispute is resolved. Then we suggested that we would return to normal business operations if Amazon and Hachette’s normal share of revenue went to a literacy charity. But Hachette, and parent company Lagardère, have quickly and repeatedly dismissed these offers even though e-books represent 1 percent of their revenues and they could easily agree to do so. They believe they get leverage from keeping their authors in the middle.”

And as Amazon pointed out in the letter, not all authors are united in their opposition to the retailer or its negotiating tactics. Indeed, more than eighty-five hundred people—largely self-published writers, many of whom have been rejected by the New York legacy houses but found success distributing their work on Amazon’s Kindle Direct Publishing platform—have signed an online petition calling on Hachette to “stop fighting low prices and fair wages.” Calling the Big Five a “collusive cartel”—a reference to the Department of Justice’s 2012 lawsuit alleging that the largest New York publishers conspired with Apple in a price-fixing scheme—the petitioners attacked Hachette and the other big publishers as greedy, elitist, and high handed, while praising Amazon for its consumer focus and willingness to help writers shut out by the New York establishment and give them a chance to find an audience. “Amazon provides us the freedom to express ourselves in more creative ways, adding to the diversity of literature,” the writers state in the petition. “Hachette believes you’ll read whatever Hachette tells you to, and rejects and dismisses many worthy writers.” With regard to Amazon’s negotiating tactics targeting Hachette writers, the petition was sanguine: “Unfortunately for Amazon, a company that prides itself on customer service, a breakdown in negotiations has meant making decisions that are hard on customers and authors in the short run in order to fight for the rights of those same customers and authors in the long run.”

One early signer of the petition was C. J. Lyons, a former emergency-room pediatrician who now writes best-selling medical thrillers published independently and by the New York houses, and who is a member of the Authors Guild board of directors. “I totally see why [Hachette] authors are upset,” she wrote in an e-mail. “Without these extras [such as preorder buttons] that Amazon used to provide, their publisher has to work harder to market and sell their books and, quite frankly, Hachette has not been able to do that. I’ve seen reports of sales dropping by 50 percent or more.” On the other hand, she wrote, “Is it Amazon’s fault that publishers have given it such a large market share or that publishers themselves have created a business model where they have become dependent on Amazon? Several years ago, the same could be said of Barnes & Noble—in fact, Simon & Schuster authors suffered when they were in negotiations with B&N [in 2013]. That’s business. And if you don’t like the business model your own company has created, change it.”

As for nonfiction books that take years to research and write, “Those authors are clearly passionate about their work, as are their readers (however limited),” Lyons says. “While I applaud that, it would be up to each publisher to decide whether a work and author should be subsidized with a large advance. I don’t think we can lay that onus on any one distributor. Perhaps the answer lies in crowd-sourcing, increased grants and endowments for the arts, as well as self-publishing models where the author recoups more of the profit as well as has the chance to connect with [the] audience and create multimedia income streams.”

For now, the health of the publishing business is “extremely important to the health of literary culture,” Nawotka says. “They’ve published a lot of books that advance our culture that will be difficult to fit into the self-publishing structure, which is largely relegated to genre fiction and self-help books. You’re not going to see a lot of self-published biographies of Abraham Lincoln.”

Because the details of the Amazon-Hachette negotiations are so closely held, it’s impossible to predict how much longer they will continue. One thing that does seem likely is that traditionally published authors are unlikely to back down in their adamant opposition to Amazon’s policies with regard to Hachette writers. In mid-September, Authors United took the unusual step of calling upon Amazon’s board of directors to reconsider sanctions against Hachette authors’ books, which the group says have caused some authors’ sales—including hardcover, paperback and e-books—to drop by as much as ninety percent.

“Several thousand Hachette authors have watched their readership decline, or, in the case of new authors, have seen their books sink out of sight without finding an adequate readership,” the Authors United letter stated. “These men and women are deeply concerned about what this means for their future careers…. Amazon chose to involve twenty-five hundred Hachette authors and their books. It could end these sanctions tomorrow while continuing to negotiate. Amazon is undermining the ability of authors to support their families, pay their mortgages, and provide for their kids’ college educations. We’d like to emphasize that most of us are not Hachette authors, and our concern is founded on principle, rather than self-interest. We find it hard to believe that all members of the Amazon board approve of these actions. We would like to ask you a question: Do you as an Amazon director approve of this policy of sanctioning books?”

Pressing its argument, Authors United made the case for traditional publishers as curators, guarantors of quality and champions of books ill-equipped to compete in a marketplace dominated by bestsellers. “Publishers provide venture capital for ideas,” the letter went on. “They advance money to authors, giving them the time and freedom to write their books. This system is especially important for nonfiction writers, who often must travel for research. Thousands of times every year, publishers take a chance on unknown authors and advance them money solely on the basis of an idea. By assuming the risk, publishers expect—and receive—a financial return. What will Amazon replace this process with? How, in the Amazon model, will a young author get funding to pursue a promising idea? And what about the role of editors, copy editors, designers, and other publishing staff who ensure that what ultimately ends up on the shelf is both worthy and accurate?”

Most recently, top literary agent Andrew Wylie has been successfully recruiting his stable of blue-chip clients, including Milan Kundera, V. S. Naipaul, Philip Roth, and Salman Rushdie, along with the estates of Roberto Bolaño, Joseph Brodsky, William Burroughs, John Cheever, Allen Ginsberg, Norman Mailer, and Arthur Miller, to join Authors United. That group has reportedly drafted a letter calling on the Department of Justice to begin an antitrust investigation of Amazon and its tactics.

It’s unclear whether Amazon was prepared for such vociferous opposition from traditionally published writers, a group it once counted among its most vocal supporters. “Whatever one would say of negotiating better terms from a vendor, this wasn’t the ideal way of handling it,” says Joe Regal, CEO of the start-up e-retailer and literary-curation site Zola Books, which is trying to position itself to challenge Amazon. “Everybody wants better terms—that’s the nature of business—but I don’t think Amazon was prepared for the backlash that’s happening when authors, who are innocent bystanders, are caught in the crossfire.”

Kevin Nance is a contributing editor of Poets & Writers Magazine. Follow him on Twitter, @KevinNance1.