It’s hard to beleive that it’s been, what, 5 years since we last played this game, but the US book publishing industry is back to its favorite pastime: complaining about how the biggest book retailer is violating antitrust law.
Twenty years ago their target was Barnes & Noble, but for the past decade the honor has gone to Amazon. Every few years the usual industry players come out with a screed about how this or that activity of Amazon was a violation of antitrust law.
This time around the ABA, AAP, and The Authors Guild sent a letter (PDF) to US Rep. David Cicilline of Rhode Island, chair of the House Antitrust subcommittee, accusing Amazon of the usual malfeasance.
Together, our organizations—the Association of American Publishers, the Authors Guild, and the American Booksellers Association—represent thousands of authors, publishers, and booksellers in the United States who serve the democratic exchange of ideas by creating, publishing, and selling books. Our members rely upon a level playing field in the marketplace of ideas to reach, inform, and transact with customers for the delivery of books, whether in physical or digital form. Regrettably, as the Subcommittee’s hearings have laid bare, the competitive framework of the publishing industry has been fundamentally altered in recent years—and remains at serious risk of further diminishment—because of the concentrated power and influence of one company in particular: Amazon.
Amazon’s scale of operation and share of the market for book distribution has reached the point that no publisher can afford to be absent from its online store. A year ago, the New York Times reported that Amazon controlled 50% of all book distribution, but for some industry suppliers, the actual figure may be much higher, with Amazon accounting for more than 70 or 80 percent of sales. Whether it is the negative impact on booksellers of Amazon forcing publishers to predominantly use its platform, the hostile environment for booksellers on Amazon who see no choice but to sell there, or Amazon’s predatory pricing, the point is that Amazon’s concomitant market dominance allows it to engage in systematic below-cost pricing of books to squash competition in the book selling industry as a whole. Remarkably, what this means is that even booksellers that avoid selling on Amazon cannot avoid suffering the consequences of Amazon’s market dominance. The ongoing COVID-19 crisis is exacerbating the problem: it continues to threaten the financial well-being of authors, publishers, and booksellers, some of whom will not survive the year. Amazon, by contrast, with its ever-extensive operation and data network, has grown only more dominant, enjoying its largest-ever quarterly profits during April, May and June.
The hell of it is, they’re right. While it would be easy to simply dismiss this as the usual crying wolf, for once there is an actual wolf. Amazon really does control most of the book market in the US, and I might dislike two of the groups mentioned above (and the third – the AAP – hates my guts) but even I can see that concentrating so much economic power into one company is bad for the public.
Antitrust law originally came about for the express purpose of breaking up large companies such as Amazon because the concentration of wealth and power is harmful to the public. And while the latest thinking is that monopolies are okay so long as consumers aren’t harmed, that is really just one of those Reaganomics myths that were invented to justify gathering more wealth and power into fewer hands.
It’s about time we discarded that myth, and started busting up trusts again.
Alas, I don’t think that will occur.