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Amazon’s tactics over online pricing could backfire

Amazon (AMZN) is wading into another online battle. This time it’s taking on a bigger media player, Walt Disney (DIS). 

Home Media magazine reported that the e-commerce giant put a stop to pre-orders of some popular Disney movies, including "Captain America: Winter Soldier," "Maleficent,” “Muppets Most Wanted,” and “Guardians of the Galaxy.” However, it is not clear whether the dispute between Amazon and Disney is about online pricing.  

This is not the first time Amazon has been in a public dispute with one of its vendors. Amazon used a similar tactic against Time Warner’s (TWX) Warner Bros. in June, when the two companies were in negotiations, but eventually they were able to work out a new distribution deal. However, the online retailer’s four-month battle with book publisher Hachette over what it could charge for e-books is far from over.

Yahoo Finance Editor-in-Chief Aaron Task said that it's not coincidence that Amazon is trying to use its leverage to gain control over pricing at a time when it’s under pressure to boost its bottom line. Task said Amazon’s tactics could potentially backfire if they alienate shoppers. He also thinks other retailers could take advantage of the tensions between Amazon and its partners, and start offering products that are no longer available on Amazon.

 

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