Authors United Calls for Antitrust Inquiry into Amazon

If you haven't had your daily dose of craziness today then you might want to pay attention to what Authors United is doing.

The Financial Times reports that AU is now working on a letter to the DOJ, asking that Amazon be investigated for antitrust violations. From behind the paywall (just the good bits):

Authors United, which counts bestselling writers including Malcolm Gladwell, Donna Tartt and Stephen King among its supporters, is soliciting signatures for a letter to William J. Baer, assistant US attorney-general for antitrust, according to Douglas Preston, the Hachette writer who started the group.

 The letter will ask the justice department’s antitrust division to “examine Amazon’s business practices”, Mr Preston wrote in an appeal to authors seen by the Financial Times. The appeal was circulated by the literary agent Andrew Wylie, who has criticised the retailer.

 

So after not taking sides in taking out a $104,000 advert in the NYTimes, and after not taking sides in sending a letter to Amazon's board of directors (and then revising it so it was even more insulting), Authors United is now going to not take sides by calling for Amazon to be investigated for antitrust violations.

According to Doug Preston, it's strictly going to be a legal request. "It’s not an emotional or a populist appeal, it’s simply citing points of law," Mr Preston said, adding that he had been in touch with the Justice Dept. "They are expecting this letter and they have told me that they welcome any information we can provide."

I for one am looking forward to that letter; if Authors United's grasp of antitrust law matches their grasp of marketing/propaganda then the letter will prove to be deeply entertaining. Oh, there won't be any valid legal arguments, but that is going to be what makes it so much fun to read.

I plan to file a FOIA request for this letter, but I doubt that will be necessary. We will probably be able to read it on the Authors United website.

***

Tell me, does anyone else think it's time to simply come out and call AU for what it is, a publishing industry astroturfing group?

They're clearly taking a side, and they are arguing a position which authors have at best a remote interest in.

If anything, an author advocacy group should be pointing at how Amazon deals directly with authors and critiquing it, a topic which AU has ignored. I would also suggest that an author advocacy group should be complaining about how publishers treat authors.

By remaining silent on these topics while interjecting in the affairs of Amazon and publishers, Authors United (or The Authors Guild, for that matter) confirms just which masters they are actually serving.

image  by Gabriel 'Briel' Rocha

Nate Hoffelder

View posts by Nate Hoffelder
Nate Hoffelder is the founder and editor of The Digital Reader: He's here to chew bubble gum and fix broken websites, and he is all out of bubble gum. He has been blogging about indie authors since 2010 while learning new tech skills at the drop of a hat. He fixes author sites, and shares what he learns on The Digital Reader's blog. In his spare time, he fosters dogs for A Forever Home, a local rescue group.

40 Comments

  1. Juli Monroe24 September, 2014

    You know, I once submitted a manuscript to the Wiley agency. So glad they declined to take it.

    Reply
    1. Richard Herley25 September, 2014

      Wylie is nicknamed “The Jackal” 🙂

      Reply
  2. SethDove24 September, 2014

    The term astroturf group usually refers to organizations that pretend to be grassroots but aren’t. I don’t see how AU has ever been anything but clear what it is. I think Amazon’s behavior has been terrible in this ordeal. Trying to dictate and strong arm book pricing is just wrong. I want cheaper books too, but a publisher should be able to destermine its price. If Amazon doesn’t want to sell it that’s fine too. But they don’t get to decide for everyone what’s what. That’s just a bully. That’s what Walmart does with its suppliers, and I don’t like it either. I really don’t understand why you defend Amazon.

    Reply
    1. Nate Hoffelder24 September, 2014

      ” a publisher should be able to determine its price”

      That is complete and utter nonsense. It hasn’t been true in decades, and it is not at all relevant to the current dispute.

      “I really don’t understand why you defend Amazon.”

      Because the arguments made by Amazon’s detractors like Authors United are so stupid that they piss me off.

      If someone would offer a good argument I would change my mind. As you may or may not have read, I did float a suggestion a few months back that indie authors should side with Hachette. That was quickly shot down but it wasn’t just a straw man post; I thought it was a good idea at the time.

      Reply
      1. J.A. Konrath24 September, 2014

        Nate, you owe me a keyboard, because I just sprayed beer out of my nose.

        You also owe me a beer. 🙂

        Reply
        1. Ruth Barringham24 September, 2014

          J. A. That is so hilarious that I nearly sprayed coffee out of my nose too. I love this post and the comments. Yours had me in stitches. I enjoy a good laugh in the morning. Hope you get your new keyboard (and your beer). HaHaHa!

          Reply
        2. Nate Hoffelder25 September, 2014

          Thanks, Joe!

          Reply
    2. J. R. Tomlin24 September, 2014

      Amazon is a profit making retail corporation. The idea that they aren’t supposed to ‘dictate’ prices is absurd. They do not dictate prices in B&M stores and they have no right to in Amazon.

      Reply
      1. Paul24 September, 2014

        Except its strategy isn’t to make money but to bankrupt all its competitors thanks to its crazy shareholders.

        Reply
        1. fjtorres24 September, 2014

          Those crazy shareholders are making tons of money as the stock appreciates and they sell off chunks.

          Reply
        2. Matthew24 September, 2014

          No, their strategy *is* to make money. Research has shown that more books are sold, with higher gross *and* net sales, at Amazon’s preferred $9.99 price point, than at either the $12.99 or $14.99 that Hatchette is fighting for. Hatchette, at this point, is nothing more than a modern-day version of Orwell’s sheep bleating, “Pricier books good! Cheaper books bad!”

          If it weren’t for the writers being caught in the middle, this would all be quite comical.

          Reply
    3. Anne24 September, 2014

      It appears that you’re ok with the publisher (wholesaler) determining retail pricing. That’s not ok with me. Neither would a retailer determining wholesale pricing be ok. They both have their parts to play in a capitalist economy where competition matters.

      Please let me know if I’m misunderstanding what you’re saying or if you have an argument as to why fixed pricing on a non essential item is a good thing for consumers.

      Also, I don’t think someone dissing the AU necessarily means they’re defending Amazon. The missteps by the AU have been laughable all the way down to the typo in their letter to Amazon board members. All the more so because these people are supposed to be brilliant and responsible for bringing culture to our lives. Their disconnect is unbelievable to me.

      Please note that Amazon has already been investigated by the DOJ once during the pricing fixing and was cleared at that time. They were also cleared in the diapers.com investigation. I’m not saying Amazon is blameless or has never messed up but so far they are clear in these particular matters with US law.

      And wasn’t Wiley the one who signed an exclusive contract with Amazon for a digital backlist when it was questionable as to whether or not he had the rights to do so? He had to back off when publishers refused to do business with his agency? How times have changed or maybe not.

      Reply
    4. puzzled24 September, 2014

      They are claiming to be a grass-roots organisation, they are just so bad at it that it’s clear they are an astroturf group.

      Reply
  3. Paul24 September, 2014

    Considering how much secrecy is behind Amazon’s numbers (can you tell me how many Fire phones they sold?), and that it is influencing vast sectors of the retail landscape, an investigation is probably long over due. Some of their tactics would be considered predatory by most definitions of the term (see diapers.com for example).

    Reply
    1. Nate Hoffelder24 September, 2014

      Diapers.com was investigated; it passed.

      Edit: Also, Amazon was investigated at the same time that the DOJ investigated the publishers and Apple for conspiring. This has actually been documented.

      Reply
      1. Paul24 September, 2014

        Thanks! Tried to look it up but got overwhelmed by all the apple DOJ links.

        I would point out that compared to 30-40 years ago, you really have to screw up to get prosecuted, and sometimes not even then (how many bankers were jailed for mortgage fraud again?)

        Reply
      2. Peter24 September, 2014

        Now, now, no need to bring facts into the discussion. You’ll never get a 7-figure advance for your next ghost-written novel that you outsourced to a starving writer in a garret in Shenzhen if you keep that up.

        Reply
  4. Juli Monroe24 September, 2014

    You can be completely opposed to everything Authors United is doing and not be “defending Amazon.”

    I don’t agree with everything Amazon is doing. I’m completely opposed to the exclusivity requirement for Kindle Unlimited/KOLL, and I’m pissed that my sales have dropped off to virtually nothing since KU’s inception. (Okay, I can’t prove cause and effect, but it’s strongly suggestive.)

    However, every time someone from Author’s United opens his or her mouth, it’s painfully obvious that they are on an entirely different plane of existence than an author like me. They don’t speak for me or my issues. Plus their arguments are just silly. So much for “United.”

    Yes, I’m unhappy about my current sales, but I’m not calling for an investigation of Amazon. Instead, I’m looking at my sales strategy and figuring out what I can do to live and thrive with the current environment. When things change, and they will, I’ll re-evaluate my situation and flex again. The government doesn’t owe me anything as an author. I’m the only one responsible for my success (or lack thereof).

    Reply
    1. Nate Hoffelder24 September, 2014

      And it’s not just that they don’t understand the viewpoint of many authors; so many of Amazon’s detractors in the book industry also don’t understand the interest and priorities of readers. It’s shocking, I know, but that’s the truth.

      Reply
      1. Thomas26 September, 2014

        It’s not surprising at all that the publishers don’t understand what their readers want. They’ve spent decades trying to put as much distance between them and the customer as possible. They even use imprint names to disguise who is publishing the book in the first place. None of the big publishers were quick to catch on to using the internet to connect with customers the way Baen and some other small outfits did.

        Until recently, there were never public disputes between publishers and retailers to begin with, because distributors were in the middle. No one cares when two companies they never heard of are negotiating. People know who Amazon is and what they do. Hachette is a name most of the public had never heard of a year ago.

        Reply
  5. J. R. Tomlin24 September, 2014

    So much for that ‘we aren’t taking sides’ stuff from AU.

    Reply
    1. fjtorres24 September, 2014

      Hey, they also say they are important.

      Reply
  6. puzzled24 September, 2014

    I wonder if AU could be considered an illegal collusion of a group of businesses, attempting to negatively affect another business.

    After all, each of the authors has contracts with publishers, which makes them businesses. I’m sure they are all deducting authoring expenses from their taxes.

    They are colluding to negatively impact Amazon, a company that their contract partners are having a prolonged contract dispute with, and due to the nature of the positions in the dispute, they are colluding to keep prices high.

    Reply
    1. Nate Hoffelder24 September, 2014

      Considering that the biggest names earn a million dollars or more each year, and most have organized themselves as companies for business and tax purposes, yes.

      We actually have an unknown number of companies colluding to pressure Amazon. Good catch!

      Reply
  7. SpringfieldMH24 September, 2014

    Perhaps Preston can name even one thing that Amazon could pursue in negotiations that wouldn’t affect authors…

    Frankly, why isn’t Preston instead contacting the DOJ about Hachette’s exploitation of authors?

    Reply
    1. fjtorres24 September, 2014

      Bookholm syndrome.
      (Google it. Great read.)

      Reply
  8. Mike25 September, 2014

    Amazon has everything to fear especially as it has no fear itself.
    YTD stock down 17.7% and yet still P/E 862.

    Double Double price in trouble
    Amazon burns, and stock burst its bubble.

    Reply
    1. Hayden25 September, 2014

      Mike, You may be right about Amazon’s share price and value. However, this has nothing to do with the thread and it does not change the fact that the guys at Authors United are clueless.

      Argue something relevant next time and start your own blog where people can write any unrelated matters they feel like.

      Reply
  9. Mike25 September, 2014

    Purposeful assaults on Amazon will eventually kill the stock price and affect its operations and even its solvency.

    Reply
    1. Dan Meadows25 September, 2014

      I think the stock price issue has more to do with Amazon behaving like a business should, reinvesting in future growth rather than Wall Street’s preferred method of maximizing short term shareholder value without regard to the long view or even the company’s eventual survival. I tend to think Amazon should be commended for behaving this way and Wall Street badly needs to be reformed to disincentivize the get rich quick stock valuation nonsense. If more companies behaved like Amazon and reinvested in growth rather than hoarding cash, our economy would be in much better shape and the predatory exploitation of the financial sector put in check.

      Reply
      1. Paul25 September, 2014

        I would agree with you if Wall St treated everyone the same way, but with the insane P/E ration Amazon is on, and the general belief that shareholders will collect after Amazon has annihilated all other retailers, it seems a bit disingenuous.

        Reply
        1. Dan Meadows25 September, 2014

          Amazon is not the one pushing those beliefs though. The shareholders may be assuming it’s the case but Amazon has never said their goal was to destroy all competition. There may well be a shareholder reckoning down the line but that’ll only happen if Amazon doesn’t do what so many seem to be assuming they’re going to. I used to be virulently anti Walmart for the same reasons; they were going to wipe out all competition and jack up prices, so I thought, but that has never materialized. They’re tough on suppliers, certainly, but they are extraordinarily profitable on thin margins with low prices.

          Reply
          1. Nate Hoffelder25 September, 2014

            Also, no one who really understands retail thinks Amazon is going to kill all their competitors. Amaozn will never kill Walmart, which is 6 or 7 times the size.

            Reply
  10. Mike25 September, 2014

    Like I said here several times already, investments don’t create losses as they are depreciated not expensed.

    IMO we could look at this as a pyramid scheme which takes time to unravel but when it does tears all around.

    Attacking the business model like in an antitrust inquiry, is one way of contributing to the unravelling.

    Reply
  11. Nirmala25 September, 2014

    I found this article which suggests that Amazon does not have much to worry about:
    http://www.ft.com/intl/cms/s/0/ab87b634-e5ad-11e3-aeef-00144feabdc0.html#axzz3EHBwjBfK

    From the above link:
    “There lies Amazon’s advantage – it need not form a cartel to squeeze its suppliers because it is already large. With a 30 per cent share of the physical book market in the US and more than 60 per cent of ebooks, it clearly has market power in the antitrust sense. But there has never been a case in US competition law of a single company being declared an illegal monopsonist.

    “In the US, the simple use by one company of monopsony power to extract lower prices from suppliers is not illegal. There is general intuition that buyer power means lower prices and lower prices are good,” says Jonathan Jacobson, an antitrust lawyer at Wilson, Sonsini, Goodrich & Rosati in New York.”

    Reply
    1. Nate Hoffelder25 September, 2014

      Interesting read, but I don’t think growing bigger is going to help. Amazon will still be more ruthless, and that is where I think publishers need to focus.

      Reply
  12. […] I deleted my link to the press release, so when Authors United announced a similar effort here in the US (and made the UK story newsworthy) I was forced to go find the story posted by the Financial […]

    Reply
  13. Jen Rasmussen28 September, 2014

    If it’s “It’s not an emotional or a populist appeal” I’m curious as to why we’re all reading about it. Presuming all or most of us do not actually work for the DoJ. Going public to talk about the letters you intend to send rather than just quietly sending them to the people you’re pretending they’re intended for is kind of the definition of emotional and populist appeal?

    Reply
  14. […] is also the head of Authors United, which as you might recall recently announced that it was going to be sending a letter to the DOJ, asking that Amazon be investigated for antitrust […]

    Reply
  15. […] group Authors United has made an official request with the Department of Justice, in the works for some time, asking for an investigation of Amazon for what the group says is a monopoly. You can read the full […]

    Reply

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