Authors, Booksellers Call For Investigation Into Amazon’s Alleged Anti-Competitive Business Practices

Last year, Amazon and book publisher Hachette engaged in a contentious feud that at times saw the online retailer use its considerable clout to make it difficult for consumers to purchase books by Hachette-published authors. Now, eight months after the two companies came to an undisclosed agreement, groups representing thousands of authors and booksellers are pointing to the online book retailer’s actions as reason for the Department of Justice to open an antitrust investigation into Amazon.

The Authors Guild [PDF], the American Booksellers Association [PDF], and Authors United [PDF] sent letters to the Dept. of Justice on Tuesday urging the agency to look into how alleged anti-competitive business practices have allowed Amazon to become the largest seller of books in the U.S., the New York Times reports.

The groups – led by Douglas Preston, a Hachette writer who founded Authors United amid Amazon’s dispute with the publisher – claim Amazon engaged in a plethora of hurtful practices, including predatory selling by offering book titles at what appears to be below-cost, strong-arm tactics against publishers, dictating the pricing of self-published authors and steering customers to its own published books rather than those offered through other publishers.

“In recent years, Amazon has used its dominance in ways that we believe harm the interests of America’s readers, impoverish the book industry as a whole, damage the careers of (and generate fear among) many authors, and impede the free flow of ideas in our society,” Authors United tells the DOJ.

The groups tell the Dept. of Justice they fear that Amazon’s sheer market power constitutes a monopoly as a seller of books and as a buyer of books.

“As with our author colleagues, we are concerned that the mega-book-retailer Amazon.com has achieved such considerable market power with such questionable business tactics that it is undermining the ecosystem of the entire book industry in a way that will be detrimental, especially to mid-list authors, new authors, and minority voices,” the American Booksellers Association wrote in its letter to the DOJ.

Such was the case last year, the groups claim, between Hachette and Amazon. When the two parties couldn’t reach an amicable agreement on contracts for ebooks, Amazon “engaged in various punitive tactics” such as delisting books, delaying delivery, and removing books from pre-order.

The groups point to an industry research study to show just how powerful Amazon has become in the literary world. According to the groups, Codex Group found in May 2014 that the retailer accounts for a 64% market share of ebook sales and a 41% market share of all new book sales.

“Given Amazon’s dominant market share, no publisher — regardless the size — can afford to not do business with them, whatever the cost,” American Booksellers Association writes in its letter. “And no one knows this better than Amazon, which has ruthlessly cut off the sales of publishers large and small when they have not yielded to Amazon’s strong-arm negotiating demands.”

As a result, the groups say they have already seen fewer titles published by major publishing houses each year.

While the groups contend that Amazon’s business practices hurt the industry as a whole, they say the supposed anti-competitive behavior harms American readers more than anything.

Authors United asserts in its letter that Amazon’s practice of routinely selling books below cost in order to bring in business for its other businesses has driven retailers out of business. In turn, this has caused “deflation across the industry and reduced the amount of revenue available for publishers to invest in new books, thus depriving readers of wider choice.”

“Over the years, Amazon has benefitted readers and authors in many ways,” the letter continues. “But no temporary price cut can compensate for the costs to free expression and the health of America’s book industry that have resulted from Amazon’s abuse of its dominance in the world of books.”

According to the NYT, the American Booksellers Association and the Authors Guild – which collectively represent more than 2,200 stores and 9,000 authors – have separately urged the Dept. of Justice to investigate Amazon, but have never done so on a joint scale.

“Our point of view seemed to have been ignored,” Oren Teicher, chief executive of the booksellers association, tells the NYT. “But the climate has changed. There are efforts in the European Union — in Germany and a few other countries — to take a closer look at Amazon’s practices. That has ramifications on what happens here.”

The European Union announced last month that it would formally open an antitrust case into whether Amazon stifled competition in ebooks through the use of restrictive contracts.

Amazon and the Department of Justice did not return the NYT’s request for comment regarding the letters.

Accusing Amazon of Antitrust Violations, Authors and Booksellers Demand Inquiry [The New York Times]