Anger, Antitrust, and Amazon
鈥淎mazon is the Darth Vader of the literary world.鈥
鈥淎mazon is a monopoly in absolutely every sense of the word.鈥
鈥淲e face the prospect of a nuclear winter in book publishing.鈥
These were just a few of the statements made at an event hosted at 国产视频 titled, 鈥Amazon鈥檚 Book Monopoly: A Threat to Freedom of Expression?鈥 The answer to that titular question was a resounding 鈥淵es,鈥 an answer given by a dozen featured speakers: Scott Turow, former president of the Authors Guild; Douglas Preston, President of Authors United; Susan Cheever, author; Mark Coker, self-published author; Franklin Foer, former editor of The New Republic; Jonathan Kanter, antitrust partner at Cadwalader; Eric Simonoff, literary agent at William Morris Endeavor; Maurice Stucke, professor of antitrust law at the University of Tennessee; John R. MacArthur, President of Harper鈥檚 Magazine; Jeffrey Rosen, legal academic and expert on Justice Brandeis; and Lina Khan and Barry C. Lynn, both with 国产视频鈥檚 Open Markets Program.
The answer was also full of anger, expressed both by those who spoke and on behalf of those who felt they could not. Eric Simonoff noted that the publishing industries鈥 relation to Amazon is 鈥渕arked by fear.鈥 Barry Lynn mentioned in his opening remarks, 鈥淢any of the people we asked to stand with us today chose not to do so…they were afraid to speak in public about their experiences with Amazon.鈥
The arguments presented at the event centered around two points: whether Amazon has or will constrain literary content, and whether Amazon has or will conduct price discrimination. For readers, the benefits of Amazon鈥檚 sale of books have been numerous: lower costs, always-available stock, fast shipping, and ebooks. There have been downsides, too鈥攖he collapse of independent brick-and-mortar bookstores, the shuttering of many literary and editorial publishing outlets, and a more risk-averse environment for publishers and authors.
Some of these downsides might be seen as evidence of changing times, but many of those angry with Amazon are so because, as speakers at the event noted, it appears Amazon increasingly 鈥渃ontrols the marketplace of ideas.鈥, the argument is that 鈥淎mazon has used its market power both to influence which books get attention (by featuring them more prominently on its Web site)…These practices, the authors argue, squeeze publishers, which makes them more risk-averse in deciding which books to publish….And this is bad not only for the non-famous writers who go unpublished, but for their would-be readers, who are denied the ability to hear those voices.鈥 Foer extended this argument by discussing how Amazon鈥檚 book ratings have created 鈥渁n ethos of quantification鈥 in book publishing, a paradigm shift away from literary content to books purchased, positive ratings received, and pages read. 鈥淭he economics of book making,鈥 Foer continued, 鈥渟hape the actual books themselves.鈥 Cheever mentioned that midlist authors specifically have suffered and 鈥渉ave decided to write less鈥 because 鈥渁dvances are lower鈥 and they can鈥檛 financially justify publication at Amazon鈥檚 low prices. Coker noted that Amazon has created a 鈥渃aste system鈥 in ebooks between authors who have agreed to sell their books only on Amazon and those who want to sell with all retailers. In effect, Coker said, this system functions likes 鈥渁 gun to the heads of authors鈥 to force them to deal exclusively with Amazon.
One could, of course, raise the point that some of these arguments sound more about a change in middle-men than in negative impacts on readers鈥攊t might be one business has simply replaced another business. The cultural monopoly argument demonstrates an impact on readers, but the data on that diminished supply of ideas is anecdotal from authors and publishers.
Indeed, publishing houses have always reserved the right to say no to a manuscript, and when it was around, Borders got to decide which books were featured in the window display. The difference here, however, is that the authors believe Amazon has inordinate influence over publishing鈥攈ence its actions can make or break a book, an author, or a publisher. The infamous example is Amazon鈥檚 tangle in 2014 with the publisher Hachette. The publisher objected both to the way Amazon priced its books and to the prices Amazon charged for use of its services. Amazon reportedly responded by
Perhaps the most powerful argument raised concerned price discrimination. Khan explained that giant firms like Amazon are able to collect data on customer preferences and patterns, and could use that information to determine the highest price each customer is willing to pay. As a result, buyers who shop online are increasingly losing a sense of what constitutes a 鈥渇air鈥 price. While there, it鈥檚 obviously bad PR. Stucke continued by arguing that there are antitrust implications when a company amasses a lot of data, from raised entry barriers, insurmountable network effects, and privacy and quality costs to buyers.
Up to now, Amazon has avoided antitrust cases centered on these arguments, Kanter argued, partly because antitrust law focuses on measurable effects on buyers, like price, and not hard-to-measure effects, like quality. Kanter also blamed a 鈥渓ack of political will鈥 among regulators and politicians for taking on Amazon. To be clear: The legal system remains of two minds whether such forms of price discrimination are anticompetitive or just smart business.聽But it is worth noting that Amazon has faced accusations聽of what looks a lot like price discrimination聽before: .聽Other online companies聽have聽been accused of conducting price discrimination through using customer data, most notably and, the latter of which steered customers using Macs to more expensive hotels. So while individual anecdotes can raise false red flags, they can also point to manipulations of price.
While all the speakers were critical of Amazon, they did not come to consensus around solutions. Some asked for government litigation while others felt antitrust law as it stands is too weak. An audience member asked, 鈥淲hy can鈥檛 we boycott?鈥 to which the panelists demurred, saying, 鈥淎mazon is too powerful鈥 and 鈥淲e wouldn鈥檛 be able to organize the publishers together.鈥 Some suggested legislation that would ban companies that are foremost platforms for sales from competing with sellers who use their site. But how far would laws like this go? There are many arenas for this kind of platform-seller relationship (online and brick-and-mortar) and many variables for such transactions (store-brand items, for example), so case law could be a deep thicket.
We don鈥檛 know, then, what the solutions would be, or what form they might take, or how far they might go, or if they鈥檙e even needed. And, to quote Khan, 鈥淚n not all of these instances do we know for sure if Amazon is doing [price discrimination] …what we do know,鈥 she continued, 鈥淚s Amazon has the capability to do these things.鈥 We do know that fear of Amazon鈥檚 abilities has stoked much anger towards Amazon in the American book community. If a DOJ probe is initiated,, the public will be eager to see what those pricing algorithms suggest.