On March 17, 2021 the Advocacy Division of the
American Booksellers Association published a white paper entitled
American Monopoly: Amazon's Anti-Competitive Behavior is in Violation of Antitrust Laws. In this 24-age report the ABA made the case "for investigating Amazon for antitrust violations, concluding that it is best for the country’s economy and its consumers that Amazon be broken up into at least four autonomous companies: retail, e-commerce marketplace platform, web services, and logistics."
Specifically with respect to the online bookselling market the report stated on p. 3:
"The online bookselling submarket refers to a retail market for the online sale of physical books, audio books, and e-books. Amazon was initially founded in 1994 as an online bookstore, and its conduct in the online bookselling submarket is a case study as to how Amazon dominates entire categories of retail and poses a threat to the competitive process. Amazon controls 42 percent of all sales of physical books,12 and an estimated 75 percent of online sales of physical books.13 Further, Amazon controls 83 percent14 of e-book sales, more than 40 percent of new book sales, and about 85 percent of sales by self-published e-book authors.15 For comparison, Amazon’s share of the online bookselling submarket is as large as Standard Oil’s before it was dismantled into 34 companies in 1911.16
"Nowhere is Amazon’s conduct more of a threat to the competitive process than in the online bookselling submarket. Amazon has engaged exclusionary tactics, including predatory pricing, to gain market power and has leveraged its substantial market power against publishers unfairly.
"In a 2015 letter to Assistant Attorney General William J. Baer, Authors United, a coalition of authors, highlighted how Amazon’s dominance and abusive practices led to consolidation in the publishing industry. Authors United alleged that Amazon purposefully sold books at cost or at a loss in order to establish greater market share. The letter states: Amazon has sold tens or possibly hundreds of millions of physical books at or below cost. The practice became more extensive in 2007, when Amazon used its (then) 90 percent share of the e-book market to dictate to publishers when to release a particular book in electronic form (i.e. the day of publication), and to impose a one-price-fits-all $9.99 sticker on all e-books, no matter how much authors and publishers had invested in those books. For years after the introduction of the Kindle, Amazon paid publishers $12 to $14 for many new e-books it sold at a loss for $9.99. This strategy worked very well for Amazon, which sold millions of Kindle devices and added many customers to its Amazon Prime program. And on the surface, it would seem to have worked well for ‘consumers’ who paid less per book. But this strategy badly damaged the publishing industry by driving down the price customers were willing to pay for new books, hence reducing the amount of revenue available for publishers to invest in new books. This, over time, also harmed readers.17
"To compound the issue, Amazon founded Amazon Publishing in 2009. Since its inception, Amazon Publishing has become a self-proclaimed “leading publisher of commercial and literary fiction, nonfiction, and children’s books.”18 It now has 16 imprints and has expanded to nine offices around the world. Amazon’s dominance in the online bookselling submarket could force authors to publish with Amazon. In an interview with CNBC in 2014, technology attorney Bob Cohn predicted, “When [Amazon has] 90 percent of the market and you go to authors, even selfpublished ones, and say we don’t want to pay anymore, where are you going to get your book published? If Amazon has 90 percent share, there’s no place else to go.”19
"Authors United’s letter further explained how Amazon leverages its market power in order to extract “arbitrary and unexpected fees” from publishers, for example, by taking punitive actions such as slowing or stopping the sale of their books if publishers resist the unexpected fees. In a well-publicized fight over e-book terms in 2014, Amazon delayed fulfillment of customer orders for many popular books from Hachette Book Group’s (“Hatchette”) imprints in order to get the terms Amazon wanted from Hachette. While most popular books ship from Amazon within two days, shipping times for Hachette books were upwards of two to three weeks.20 A similar incident happened in 2010 with Macmillan Publishers following a dispute over e-book pricing with Amazon.21
"Amazon’s anti-competitive conduct extends to the pricing of its proprietary e-book reader and tablet, the Kindle and Fire, which are “loss leaders,” meaning products priced at or below cost to stimulate the sale of more profitable goods or services. 22 Amazon’s intent is to leave consumers with no alternative but to purchase e-books and other products from Amazon, rather than its competitors, regardless of price...."
Jeremy Norman’s
