On July 13, in an unprecedented joint action, U.S. booksellers, authors, and literary agents called on the U.S. Department of Justice (DOJ) to investigate the business practices of Amazon.com. The action comes as similar efforts are underway in the European Union.
In a letter delivered to the Department of Justice, the group Authors United called for an investigation of Amazon’s “abuse of its dominance in the world of books.” The letter stresses that Amazon’s monopolization of the book industry has had a negative impact on free expression and the health of America’s book industry.
On the same day, the American Booksellers Association also wrote to the Department of Justice, urging the department to give “careful consideration” to the letter sent by Authors United. (To read both letters in full, click here.) The Authors Guild and the Association of Authors’ Representatives have expressed their support of the action, and the Authors Guild is also sending a letter to the DOJ.
Over the past year, many of Amazon’s business tactics have called into question the power the online retailer wields over the book industry – and whether it constitutes a monopoly that demands government action.
In 2014, a dispute over e-book terms between Amazon and Hachette Book Group became public when Amazon appeared to delay shipping of popular Hachette titles and removed the preorder button for upcoming books in an effort to pressure the publisher into giving the retailer the terms it wanted.
Amazon is also well-known for selling books as loss leaders (below cost) in an effort to sell other, more high-priced items and to increase its market share in the book industry.
In the midst of Amazon’s publisher disputes, Franklin Foer, then the editor of the New Republic, wrote an article in which he argued that Amazon’s monopolistic actions needed to be addressed by a robust regulatory state.
Soon after, economist Paul Krugman noted in his New York Times column that the online retailing giant is not so much a monopolist, but a “monopsonist, a dominant buyer with the power to push prices down.”
The Authors United letter notes: “Today a single company, Amazon, has gained unprecedented power over America’s market for books. We are not experts in antitrust law…. but we are authors with a deep, collective experience in this field, and we agree with the authorities in economics and law who have asserted that Amazon’s dominant position makes it a monopoly as a seller of books and a monopsony as a buyer of books.” The authors point out that Amazon now controls the sale of more than 75 percent of online sales of physical books; more than 65 percent of e-book sales; more than 40 percent of sales of new books; and about 85 percent of e-book sales of self-published titles.
In ABA’s letter, CEO Oren Teicher and ABA President Betsy Burton write: “A central tenet of ABA’s mission is to ensure that a broad array of books is as widely available to American consumers as possible. The greater the number of books, the greater the number of voices and ideas; the greater the number of voices and ideas, the richer are the lives of our citizens and the stronger our society.”
Amazon’s business tactics, the ABA letter continues, threaten publishers’ ability to support new and lesser-known authors and publications, thereby hindering the diversity of speech. “We have already seen fewer titles published by the major publishing houses each year,” it notes. “And while it might be tempting to chalk this up to a changing economy, the truth is that these changes have been manipulated by one retailer, which uses scorched-earth tactics to extract concessions and kickbacks from publishers in exchange for offering their books for sale.”
Authors United and ABA both conclude their letters by calling for action from the DOJ. “We respectfully request that the Antitrust Division investigate Amazon’s power over the book market,” Authors United writes, “and the ways in which that corporation exercises its power, bearing in mind the very special constitutional sensitivities that have historically been applied to any business that has established effective control of a medium of communication.”
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