October 13, 2014
Authors seek antitrust investigation on Amazon
In the latest fallout from the ongoing publishing dispute between Hachette Book Group and Amazon, a group of authors has urged the U.S. Department of Justice to launch an antitrust inquiry into Amazon.
According to a report in the Financial Times, Authors United, led by writer Douglas Preston, is asking authors to sign a letter to William J Baer, assistant U.S. attorney-general for antitrust, to "examine Amazon’s business practices." The group is supported by major Hachette writers like Stephen King, Malcolm Gladwell and John Grisham as well as non-Hachette authors Philip Roth and Salman Rushdie.
As part of the spat over e-book pricing that began in May, Amazon has delayed shipment and prevented pre-orders of some books published by Hachette.
After taking out a full-page ad in The New York Times in August, Authors United on Sept. 19 sent a letter to Amazon’s board asserting the company was "sanctioning" Hachette authors, driving down sales for many by at least 50 percent to up to 90 percent. The letter said, "Efforts to impede or block the sale of books have a long and ugly history. Would you, personally, want to be associated with this?"
The group claims not to be taking Hachette’s side in the dispute but is concerned about Amazon’s strong-arm tactics that are affecting authors’ livelihoods during the negotiations. But soliciting the U.S. Department of Justice moves discussions around the dispute into whether Amazon is abusing its market power.
"Their actions to manipulate behavior [by Hachette] are exactly the reason these laws were created," Barry Lynn, a senior fellow at the New American Foundation, who is advising Authors United on the letter, told The Wall Street Journal.
The Authors Guild, representing 9,000 authors and working closely with Authors United, also confirmed last week that it hosted a meeting on August 1 between a group of authors and the Department of Justice in an effort to draw antitrust scrutiny of Amazon’s practices. Authors in the UK and Germany have also lodged complaints with authorities.
Amazon, which hasn’t responded to the antitrust discussion, wants to sell most e-books at $9.99, a price it says will drive the most sales and best support authors, publishers, consumers and Amazon. Hachette doesn’t want uniform pricing.
In the last big antitrust case in the book industry, the justice department and U.S. courts in 2013 found Apple liable for colluding with five publishers to illegally increase e-book prices, impeding e-book competitors such as Amazon.
- Letter to Amazon.com, Inc. board of directors – Authors United
- Authors to call for Amazon Inquiry – Financial Times (tiered sub.)
- Authors Group Will Ask Justice Department to Probe Amazon – The Wall Street Journal (sub. required)
- Literary Lions Unite in Protest Over Amazon’s E-Book Tactics – The New York Times (tiered sub.)
- Authors Guild Met With DoJ to Seek Investigation Into Amazon’s Practices – The Wall Street Journal (sub. required)
- Apple settles e-book antitrust case with U.S. states, others – Reuters
- Amazon explains digital pricing elasticity – RetailWire
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Recent Discussions
Discussion Questions
How should Amazon respond to calls by authors for antitrust investigations? Does Amazon risk a public backlash in its escalating dispute with Hachette?
Poll
Amazon should back off and look at a change in policy. This is going to cost them some money and generate some bad press.
Until Amazon receives a notice from the Department of Justice they should ignore this issue. Apple and Amazon created the e-book product, which has resulted in lower delivery cost to consumers. The industry transformation has been rapid. This transformation has significantly reduced author and publishers sales options. Amazon is flexing its buying power by demanding lower prices. The recording industry has seeing the rise of artist marketing directly to their fans, thereby eliminating Apple and Amazon from the process. No reason the publishers couldn’t market directly to consumers. The backlash could come from publishers and authors.
Perhaps I missed it but have seen little-to-no favorable press about Amazon’s position. Should the Department of Justice get involved it will get far worse. I would recommend that Amazon try to find a way to avoid that at all costs.
I’m not responsive to Amazon throwing its weight around, and I think the authors make an impressive argument to which I’m willing to listen and sympathize. But wait a minute: We just released a product in our intelligence arsenal called “Predictive Pricer.” This uses science (algorithms, past history, predictive analytics) to help the retailer know how to charge the right price on any given day to sell the most product for the greatest profit. Note the paragraph in the article above: “Amazon, which hasn’t responded to the antitrust discussion… wants to sell most e-books at $9.99, a price it says will drive the most sales and best support authors, publishers, consumers and Amazon.”
Keep in mind that Amazon is a very, very smart organization; It’s possible that they know something about predictive pricing, and really could drive the most sales and best support authors, publishers, consumers and Amazon by using this fixed rate. Think about it.
The music industry has been upended by digital commerce and now it is the publishing industry’s turn. As a writer myself, I hope that we can find some way to keep writing a real profession. The payment for intellectual goods is an ongoing challenge in the new economy.
Smart for the authors to call that out as there’s a ground swell about that same issue now. Check out this piece from New Republic. Once the media gets on that bandwagon, especially the way the Amazon execs are acting (as well as what they’re saying), could be a long PR slide for the long-loved digital retailer.
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Amazon should back off and look at a change in policy. This is going to cost them some money and generate some bad press.
Until Amazon receives a notice from the Department of Justice they should ignore this issue. Apple and Amazon created the e-book product, which has resulted in lower delivery cost to consumers. The industry transformation has been rapid. This transformation has significantly reduced author and publishers sales options. Amazon is flexing its buying power by demanding lower prices. The recording industry has seeing the rise of artist marketing directly to their fans, thereby eliminating Apple and Amazon from the process. No reason the publishers couldn’t market directly to consumers. The backlash could come from publishers and authors.
Perhaps I missed it but have seen little-to-no favorable press about Amazon’s position. Should the Department of Justice get involved it will get far worse. I would recommend that Amazon try to find a way to avoid that at all costs.
I’m not responsive to Amazon throwing its weight around, and I think the authors make an impressive argument to which I’m willing to listen and sympathize. But wait a minute: We just released a product in our intelligence arsenal called “Predictive Pricer.” This uses science (algorithms, past history, predictive analytics) to help the retailer know how to charge the right price on any given day to sell the most product for the greatest profit. Note the paragraph in the article above: “Amazon, which hasn’t responded to the antitrust discussion… wants to sell most e-books at $9.99, a price it says will drive the most sales and best support authors, publishers, consumers and Amazon.”
Keep in mind that Amazon is a very, very smart organization; It’s possible that they know something about predictive pricing, and really could drive the most sales and best support authors, publishers, consumers and Amazon by using this fixed rate. Think about it.
The music industry has been upended by digital commerce and now it is the publishing industry’s turn. As a writer myself, I hope that we can find some way to keep writing a real profession. The payment for intellectual goods is an ongoing challenge in the new economy.
Smart for the authors to call that out as there’s a ground swell about that same issue now. Check out this piece from New Republic. Once the media gets on that bandwagon, especially the way the Amazon execs are acting (as well as what they’re saying), could be a long PR slide for the long-loved digital retailer.