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Why Authors United’s Antitrust Letter Against Amazon is Doomed

11513503393_9dabbda7cd_kIt’s been two days since Authors United The Authors Guild formally sent its letter to the DoJ, asking for an antitrust investigation, and the pundits are starting to weigh in.

Mathew Ingram has a new post up over at Fortune this morning. As you may recall from his time at GigaOm, Ingram is no friend of Amazon, and he doesn’t think this complaint has a chance in hell.

After neatly sidestepping the question of whether Amazon was a monopoly (it’s not) or even had market power (it doesn’t), Ingram points out that:

But the more important point is that simply having a monopoly (in the sense of having a dominant share of a discrete market) isn’t a breach of U.S. antitrust law, although most people seem to believe that it is—or that it should be. What’s illegal is using that monopoly to stifle competition. And not just to stifle competition, but to do so in a way that makes things worse for consumers.

This is where the Guild’s argument falls apart, and it’s the reason why the group is trying to distract the Justice Department by talking about the impact Amazon has had on free expression, etc. Whether the Guild likes it or not, one of the main benchmarks for whether an antitrust offense has taken place is whether consumers have been harmed—and all the available evidence shows that Amazon’s behavior in the e-book market in particular has helped consumers by keeping prices low.

Ingram then goes on to miss the obvious flaw in Authors United’s The Authors Guild’s arguments about Amazon’s impact on free expression, which is that in the age of the internet, it is simply not possible for one retailer to gain such a dominance of the multitude of channels of free expressions now available (I’d be more worried about Mozilla or Google, and the control they have through their web browsers).

Instead he points out that "the evidence is overwhelming that with the Kindle platform, Amazon has done far more for the free flow of information and expression than the Guild or the Big Five publishers have".

Thus is true.

image by wwarby

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fjtorres August 22, 2015 um 3:31 pm

There is also the "detail" that the matter has already been litigated and dismissed relatively recently as pointed out here:

Two points the gold-plated gang neglects is that Amazon can’t stop anybody from selling ebooks nor do they control ebook prices because: Agency!

(And Indies set their own prices; all Amazon is set their distribution fee accordingly.)

Nate Hoffelder August 22, 2015 um 4:02 pm

That’s what I was thinking of when I said Amazon wasn’t a monopoly, yes. But it’s also worth noting that the DoJ could decide that the Stuyvesant ruling is wrong.

Bridget McKenna August 22, 2015 um 3:35 pm

Nate, whoever is pushing your ads has positioned one for Dorrance Publishing, a vanity press, at the top of this article. Thought you’d like to know so you can choose to put them in your No column.

As Lee Child said over at Konrath’s place, the AU letter is only meant to increase the negative publicity around Amazon. Between that and the Streitfeld/Kantor article, there’s a whole lotta smearin' goin' on.

Nate Hoffelder August 22, 2015 um 3:41 pm

Thanks. I would like to block it, yes.

Where does that advert lead, do you know? (It would help if I had the exact URL.)

Chris Meadows August 22, 2015 um 4:27 pm

Is it Authors United or the Authors Guild that sent the letter? I thought it was the former, and that the Authors Guild linked approvingly to the AU letter but it was definitely AU who sent it.

Nate Hoffelder August 22, 2015 um 4:30 pm

Damn it, you’re right. It’s AU, not TAG.

Anne August 22, 2015 um 4:49 pm

Thanks for changing that as I found myself confused reading through this. It seems that Matthew made the same error though. His first sentence reference TAG but he links to WSJ article about AU and then he says stuff like Apple was forced to pay a penalty, which as far I know hasn’t happened yet.

Nate Hoffelder August 22, 2015 um 5:03 pm

It’s an understandable mistake. Thecnically the two groups have different leaders and are independent, but they speak with the same voice and have similar names so it is easy to get them mixed up.

Syn August 22, 2015 um 6:08 pm

Can’t Au get in trouble for a smear campaign and trying to hurt Amazon’s business? If they are hoping to turn consumers against them.. I think Amazon screwing up and ticking off its customers is the only thing that can do that. All this does, is makes me buy nothing from anyone on Au lists. A bunch of hypocrites since they all sell on Amazon and probably most of their income comes from there.

Nate Hoffelder August 22, 2015 um 6:23 pm

Get in trouble how?

fjtorres August 22, 2015 um 10:00 pm

In other countries there are laws against product and/or brand libel.
The US has no specific laws against smearing companies. So calling them into court to make them personally liable isn’t terribly likely.

fjtorres August 22, 2015 um 10:04 pm

The DOJ could also get marching orders under a new administration to go get Amazon, the way Reno told them to get Microsoft.
With Amazon they could try to define the relevant market the eink reader market or even the Kindle owner market and declare them a monopoly that way.
Worse injustices have been perpetrated when the right campaign fundraisers call in their IOUs.

Nate Hoffelder August 22, 2015 um 10:37 pm

That would require someone to have deeper pockets than Amazon, and a willingness to spend the money. I don’t think very many publishers fall in both groups.

William D. O’Neil August 23, 2015 um 12:38 am

Well, it will provide a nice stimulus for the market for lawyers, especially lawy-drudges (aka associates) to dig out all the supporting info. Pity the poor DOJ people who have to wade through it, but at least it’s a job.

fjtorres August 23, 2015 um 8:17 am

It doesn’t take deep pockets to buy congressmen; the going rate is $30K each.

As for publishers' willingness to spend, well, S&S dropped, what was it $14M on Hillary? You can easily buy half of Congress for that amount. Or a DOJ investigation.

Nate Hoffelder August 23, 2015 um 8:41 am

Good point.

Tim Wilhoit August 25, 2015 um 9:28 am

PG’s story about the letter with a link to Randall Morris' story. Randall looks at the letter from the standpoint of an antitrust lawyer and thoroughly eviscerates it. It gets a little bogged down in legal arcana but it’s fascinating nonetheless.

Nate Hoffelder August 25, 2015 um 9:40 am

Thanks for the link.

But he’s not a lawyer, as he made clear in his post.

Tim Wilhoit August 25, 2015 um 10:04 am

Perhaps I should have should have phrased it "from an antitrust law perspective" as PG did. I didn’t mean to insinuate Morris is an antitrust lawyer.

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