July 14, 2015
ABA, Authors Guild, Association of Authors’ Representatives, and Authors United team up to demand Amazon antitrust inquiry
by Alex Shephard
A month after the European Union announced an antitrust investigation into Amazon‘s ebook contracts, four powerful groups representing authors and bookstores are uniting to demand that the U.S. government launch a similar inquiry into the company’s role in the American book market. The American Booksellers Association, the Authors Guild, the Association of Authors’ Representatives, and Authors United each sent short letters to the Justice Department demanding an investigation. Authors United, an informal group of authors launched by Douglas Preston during Amazon’s standoff last year with Hachette, appears to have led the charge; the letters are in support of a short position paper written by Preston and Barry Lynn.
The letters and the position paper present a familiar case to readers of this blog. (The position paper—by way of full disclosure—quotes MobyLives founder, and Melville House publisher, Dennis Johnson.) Authors United, in its letter, declares Amazon a “monopoly as a seller of books and a monopsony as a buyer.” They argue that Amazon’s position in the market is unparalleled, that it squeezes out competition and sets barriers to entry for potential competitors, all of which end up hurting publishers and authors, limiting the diversity of American literature. And they argue that Amazon’s willingness to remove buy buttons and alter prices during disputes with publishers works against the “free flow of ideas,” and that the company has, during such disputes, privileged authors based on their sales record and political leanings. All of these tactics, they write, hurt American consumers. In their position paper, Preston and Lynn argue that “what is at stake is whether we allow one of the nation’s most important market places of information to be dominated by a single corporation.”
The New York Times’ David Streitfeld broke the story. In his piece, Streitfeld makes two important observations: First, he notes that the groups’ rhetoric mirrors Amazon’s: “Perhaps stealing a page from Amazon, which often promotes policies that would benefit it by talking about what customers want,” Streitfeld writes, “the groups said their concerns were more about freedom of expression and a healthy culture than about themselves.” Second, Stretifeld notes that five years ago, in a move similar to the one just made by the ABA, the AG, the AAR, and Authors United, Amazon sent its own white paper to the Department of Justice asking it to investigate Apple and five major publishers for fixing ebook prices. Seemingly intimidated, the five publishers quickly agreed to an extremely costly settlement with the D0J; Apple fought on but was found to have committed antitrust violations in 2013. An appeal was denied earlier this month.
There are plenty of references to that case, U.S. v. Apple, in the letters, but there are key differences. The Department of Justice has resisted investigating dominant corporations who lower prices for consumers, like Amazon, and has instead focused on those who raise them, like Apple and Amazon—for decades the price paid by consumers, not the diversity of the marketplace has been the standard. These letters argue that consumers are being hurt by the lack of diversity in an Amazon-led marketplace, but it’s unclear if the Justice Department will be swayed by that argument—if they did it would be an unprecedented move. Michael Carrier, an “antitrust expert” at Rutgers law school, told Streitfeld that “Antitrust for the last 30 to 40 years has focused on economics—the price that someone pays for something. It is an ill-fitting tool to address concerns about a company’s effects on culture.”
According to the Times, both the ABA and the Authors Guild have petitioned the Justice Department before. Authors United first announced its intention to demand an antitrust investigation last September. It’s unclear whether or not the 24 page paper produced by Preston and Lynn was the result of that effort, or if the group had previously contacted the DoJ.
The ABA, the Authors Guild, and the the Association of Authors’ Representatives are the most important organizations representing bookstores, authors, and agents, respectively. But one interest noticeably absent is that of the publishers themselves—the Association of American Publishers did not join in the fun. Our own publisher aside, major publishers have always been reticent about speaking publicly about controversial topics—particularly changes in the market—and have arguably become more risk-averse after their attempt to collude with Apple failed so miserably. It’s undoubtable that most of (if not all) the Big 5 support the effort in practice, but it’s highly unlikely that any will make a statement about it, let alone join in.
We’ll continue to follow this story as it develops and will have more on Preston and Lynn’s position paper later this week.
Alex Shephard is the director of digital media for Melville House, and a former bookseller.