Six months ago, I wrote about a major court decision and the negative impact it could have on many regional Adirondack businesses, especially booksellers. The next phase has arrived in a convoluted, “if-you-can’t-beat-’em, join-’em” story, challenged by one of upstate New York’s top independent bookstores. The defendants in the earlier case included several of the nation’s largest publishers―Hachette, HarperCollins, Macmillan, Penguin Group, and Simon & Schuster. Their e-book titles were being deeply discounted by Amazon, and to fight back, the group signed an exclusive agreement with Apple to sell the same e-books at artificially inflated prices.
The government called it anti-trust collusion, and when the courts approved a settlement in favor of Amazon last September, the Justice Department lauded the agreement as “in the public interest, and consumers will start to benefit from the restored competition in this important industry.”
Here we are, six months later, with order restored, right? Not hardly. If you haven’t heard the news, a lawsuit has been filed by three independent bookstores, including Book House of Stuyvesant Plaza in Albany. The suit alleges anti-trust collusion by the Big Six, and I note with the greatest of irony that the name refers to America’s six largest publishers: Hachette, HarperCollins, Macmillan, Penguin Group, Simon & Schuster, and―yes, you guessed it―Amazon!
Since the first five publishers mentioned above failed in their earlier attempt to control Amazon’s pricing of e-books, they took the obvious next step: joining with the “enemy” (Amazon) in controlling the prices of those same e-books.
And how did they do it? With two simple strategies. They made Amazon the only place where their e-books are available, and those books can only be read on a Kindle or a device with a Kindle app.
As a consumer, go ahead, choose any book published by the Big Six. Want a hard-cover or soft-cover copy? No problem. Buy or order it from just about any bookstore. Find a sale; look for a deal.
Want an e-book version of the same title? Don’t bother shopping around because you won’t find any sales, discounts, or competitive prices. In fact, you won’t find anything unless you go to Amazon. And the benefits to Amazon are evident: the sale of a book, and the need for a Kindle or Kindle app to read the book. Amazon CEO Jeff Bezos said last year, “We want to make money when people use our devices, not when they buy our devices.” Apparently Bezos has discovered that both is better.
And Amazon was certainly looking ahead. In the past three years, they have released free Kindle apps allowing customers to read Kindle e-books on Android devices, Blackberries, iPads, iPhones, Mac computers, and PCs―and the Big-Six books for all of those Kindle apps can only be purchased from Amazon. Sounds like a pretty good definition of the term monopoly.
Section III of the new lawsuit notes that the Big Six “are responsible for approximately 60% of all revenue generated from print books sold in the United States,” and moreover, that “85% of all revenue generated from the sale of New York Times Bestsellers is from books published by the Big Six.” With the Big Six exclusive agreement on e-books, those two facts drastically reduce the ability of all bookstores to attract sales since they are excluded from selling the majority of the most saleable products in the e-book world. Stores nationwide rely heavily on consumers making impulse purchases, which in this case are eliminated by the millions because shoppers can’t shop for those e-books in any store but Amazon.
The suit claims that “consumers have been injured because they have been deprived of choice, and also denied the benefits … of competition. …Competitors, actual and potential, have been, and will continue to be, restrained from vigorously competing with one another for selling e-books as a result of the contracts and combination described herein.”
In the end, the charges are stated clearly: “a. AMAZON has achieved and maintained a monopoly in the sale of e-books in the United States; b. AMAZON has restrained, suppressed, and eliminated actual and potential competition in the sale of e-books in the United States.”
While Book House is the first of three plaintiffs named in the court papers, the complaint section adds that the filing is “on behalf of themselves and all other similarly situated independent brick-and-mortar bookstores.” They’re stepping forward in defense of their brethren.
Consumers, and that means you, need to understand the importance of the many “buy local” initiatives. It’s an unhealthy trend to browse in regional stores for what you want, and then turn to Amazon or Google Shopping to find the lowest price. In the end, it works against the great variety of stores and shops that are vital to local consumers, tourists, communities, and the Adirondack region in general. In the Big Picture, they are an intrinsic part of who we are. We need them, and they need our support. They in turn support our communities by generating commerce, staging events, and participating in fundraisers.
When you shop at Amazon for a book, remember that just because they don’t have it doesn’t mean it isn’t available, and even though Amazon might list a book with the notation “out of print,” it’s only a sales tactic to dissuade you from looking elsewhere. Search that same book online by title or author and you may well find it available from among the dozens of regional authors who market and sell their own work, or from an Adirondack store that also has an online presence.
And in case you weren’t aware, Google Shopping does not offer the best merchandise or the best prices, whether the product is books or other goods. What they offer are the best merchandise and best prices available from their paid advertisers. There’s a big difference. You’re not shopping in the world of the Internet: you’re shopping in the world of companies who have paid to advertise their products on Google.
Consider giving your local community shops and vendors a look. You might be pleasantly surprised. The biggest isn’t always the best.