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I think the key there is "public" battles. Amazon isn't use to having to justify their actions in public and didn't enjoy having the light shined on their negotiating tactics. I'm thinking that they haven't learned the lesson that what they say publicly can have a negative long term effect. A more savy exec would have said something like "we understand their concerns and will continue to work with them in that regard, but we think this will be a long term win for authors. It's only been in effect for six months". Having your concerns dismissed with a wave of the hand never sits well with people.
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