Amazon Stops Processing Payments For Crowdfunding Platform For Creative Commons Books

from the weird dept

So this is a bit strange. Unglue.it is a cool crowdfunding platform that focuses on raising money for authors/rightsholders so that they’ll release an edition of their books under a Creative Commons license. We’ve seen a few similar offerings, but Unglue.it seemed really interesting (and to be getting some attention/traction). Basically, they would work with rightsholders, to find out at what price they’d be willing to put their works out under a Creative Commons license, and then try to crowdfund that amount. Neat idea. However, as Jack Allnutt alerts us, despite having already been processing payments for Unglue.it, Amazon has cut the service off, with a bizarre claim about how they don’t want to work with any new crowdfunding platforms:

Amazon Payments has informed us that they will no longer process pledge payments for Unglue.it, forcing us to suspend all active ungluing campaigns. According to a Senior Account Manager at Amazon, Amazon has decided against “boarding fresh crowdfunding accounts at this time”. Amazon has been providing payment services for Unglue.it, as it does for the popular crowdfunding site Kickstarter.

Of course, that statement doesn’t make much sense, given that it was already processing payments for Unglue.it. In fact, part of this news was that Amazon is requiring Unglue.it to void all payments for existing campaigns (i.e., those not yet funded). So the idea that this is about not “boarding fresh crowdfunding accounts” doesn’t make much sense. Amazon has been the only choice for payments on Kickstarter since the beginning, and that seems to have gone well, so it’s odd that they’re now cutting off others (and, of course, opens up Amazon to wild conspiracy theories). I contacted Amazon to get their side of the story, and they provided the following comment:

We support a wide variety of businesses, but we have regulatory obligations as a licensed money services business for how we operate. Unfortunately, Unglue.it’s model is not the same as some other crowdfunding services and at this time does not allow us to meet those obligations.

That statement makes this all the more… confusing. They’re clearly implying that there are regulatory issues preventing them from supporting Unglue.it, though I’m not sure I can think of what the concern here might be. There have been some regulatory issues around equity funding via crowdfunding, but that doesn’t seem to be an issue here. If they’re just working out deals for licensing books… I’m at a complete loss.

Filed Under: ,
Companies: amazon, kickstarter, unglue.it

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Comments on “Amazon Stops Processing Payments For Crowdfunding Platform For Creative Commons Books”

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34 Comments
The Mighty Buzzard (profile) says:

Re: Re: Amazon takes the gold in asshattery

Also, if that’s the real reason they don’t want to do it it shows that they’re afraid that this has a real future.

Yeah, media companies have quite the history of going batshit over things that aren’t real threats. Witness the histrionics over piracy when the real problem there is their UI sucks harder than that of most pirate sites.

PaulT (profile) says:

Re: Re:

CC doesn’t prevent the author from charging for the book if they wish (and giving Amazon a chunk of it for using their platform), so it wouldn’t necessarily cause them any more problems than the multitude of public domain titles they already carry. It’s tempting to think this is just Amazon trying to protect its book business directly, but I’m not sure that’s the case.

Machin Shin (profile) says:

Re: copyright violation

So you really able to handle all the red tape and paperwork involved in filing a complaint like that and you can’t find a better way to contact him than posting in the comments section here?

Thank you for demonstrating once again how wonderfully technologically incompetent you people are. You have given a fine example of why we need to update our legal system. Too many technophobes in the system who can’t even find the “contact us” section of a web page.

Donnicton says:

Re: Re: copyright violation

He thinks the RICO act invalidates fair use, how competent could he be?

Assuming this isn’t just some really poorly done troll, what’s funny is that this person is posting under the name H.P. Albarelli Jr., who, according to Albarelli’s bio resides in Florida, but is filing allllll the way in Californa. Wonder what the angle is with that one…

Anonymous Coward says:

Mike, this is one of those cases where you show that you really aren’t involved in business on the internet in any meaningful way. Otherwise, you would know what is going on.

There are various laws in the US to try to stop things like money laundering and such. As a result, there is the “know your customer” rules regarding payment processors. They need to know who they are actually paying money to (and for that matter, who they are collecting money from). That has all sorts of implications, including requiring W8 or W9 forms regarding payouts to individuals, groups, or companies that might benefit from the payouts.

If the site isn’t very strict about it’s payouts (ie, it’s unable to provide the processors with end payout users, example), then the processors may not want to deal with them.

It’s not about the product – it’s about the methods.

Anonymous Coward says:

Re: Re: Re:

Drew, the regulations regarding payments online have tightened many times over the years. There has also been some expansion of those rules in regards to companies that collect monies for others. With a situation like this where the company is only a conduit for cash, I am surprised that they even got processing to start with. It’s a pretty difficult business model to maintain right now.

The concerns regarding money laundering and other fiscal avoidance techniques is strong now. They can no longer just hand money to anyone and say “I didn’t know what they were doing.”

I suspect that it’s almost entirely a compliance issue in this area.

drew (profile) says:

Re: Re: Re: Re:

Good shout, things have tightened up a lot in the UK (well, the laws have tightened up, the practices less so) but it’s been very focussed on companies that actually take deposits rather than companies that facilitate payments.
I wonder how much money-laundering this prevents vs how many start-ups / innovators find themselves unable to realise their idea.

MarkSG (profile) says:

Incompetence, not malice

I suspect cock-up rather than conspiracy. I have to deal with Amazon’s payment system in my day job and, frankly, it’s a humongous pile of cack. Their procedures are inflexible, seemingly arbitrary and prone to behaving in unexpected ways. Account managers, while pleasant enough, are completely incapable of working round their system’s limitations.

I can well imagine that they’d cut off an account like Unglue.it just because “computer says no” and then scrabble around trying to justify it rather than fixing the problem which led to the account being flagged in the first place.

zoe (profile) says:

what constitutes a monopoly?

At this point if Amazon is only in with Kickstarter does this make it a monopoly situation? I’m not sure why they should chose one over the other except this is dealing with literature and it might cut into Amazon’s business. They are sticklers for not letting self published authors put their books out there unless they have copies and approve it, etc. But they painfully continue to bombard you with Createspace material to get you to sign up. I’m disappointed in Amazon!

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