Monopoly Alert: Makes The Price Too High

The trending topic at BookExpo America in New York City this week is Amazon’s abuse of its near-monopolistic hold on book publishing and how it is discouraging consumers from buying books from the Hachette Book Group, currently the lone publisher standing up for better pricing for authors (and of course better income for itself). Recently when customers have gone to the Amazon website to buy a Hachette title, Amazon has told them that it can’t be shipped for weeks. To be helpful, the company suggests that the customer buy a similar (non-Hachette) book instead. Now that Amazon’s practice has been exposed to the nation, perhaps it will yield. Or not.

Amazon is led by Jeff Bezos who also owns the Washington Post. He must feel some pressure because his company just issued a rare statement about its position. The gist is that Amazon wants to pay book sellers and authors what it wants to pay them. If vendors want a price they think is fair, they can go elsewhere. Take it or leave it. The problem is that there is very little elsewhere to go. Barnes & Noble is just holding on, and of course there are the valiant independent book sellers whose prices are deeply undercut by Amazon. Obviously, once Amazon’s struggling competitors go out of business, and Amazon has a stranglehold on book publishing and the written culture of the nation, Amazon will stand alone able to dictate sales terms.

Will U.S. book buyers will let Amazon get away with this? One of them won’t. A consumer standing up against abusive practices is so rare that David Streitfeld published a piece about her in the N.Y. Times. Ardelle Cowie, who estimates that she spends $5,000 a year buying products, including books, from Amazon, was so appalled she called the company to complain. The Connecticut woman, the daughter of a Presbyterian minister, found that Amazon had no mechanism for taking complaints about its policies and so she has switched to another bookseller.

I was on the brink of buying Amazon’s Kindle Paperwhite, which I am persuaded is the best device for reading, just as Amazon says, but now I won’t. This will certainly hurt me more than it hurts Amazon, but I will have exercised one of the dwindling ways that an American consumer can stand up for competition in the rigged marketplace.

Why rigged? Well, it’s complicated. The Justice Department has actually protected Amazon from having to face real competition. When the Authors Guild, Apple and various book publishers tried to break Amazon’s near stranglehold on the book business, the Justice Department sued that group alleging that publishers were in collusion with Apple and restricting competition. The N.Y. Times editorial board agreed with the Justice Department, but noted that the settlement did nothing to protect consumers from Amazon. Consumers need that protection again Amazon, because clearly we have a preview of Amazon’s monopolistic practices. Ida Tarbell, who wrote the classic exposé of how John D. Rockefeller used illegal tactics to build Standard Oil, said that the most appalling thing about him was that his intelligence, drive and focus would have enabled him to capture the nation’s oil business without using criminal means.

So if Amazon were not discriminating against a vendor standing up for fair prices, I could have bought that Kindle and downloaded a very worthwhile e-book. I want to believe my action is Amazon’s loss, but I don’t think the Fortune 500 company will be as inconvenienced as I am.

5 thoughts on “Monopoly Alert: Makes The Price Too High

  1. A very good piece, Kathy.  But no mention of Barnes & Noble?  Several years ago I accused them of being the Standard Oil Company of the American Publishing Industry. They wanted to control not only distribution but production as well in violation of the Anti-Trust Laws.  I had it all set up with an editor at Forbes to discuss the issue but my editor begged me not to do it.  No one wanted to come up against the Octopus of B&N.  Amazon has  since strangled them with their online tentacles.


    • Thank you so much! I mean to say earlier that I gave B&N a pass because they are in trouble. B&N power was supposed to counter the Amazon power — but it isn’t working out that way.


  2. There doesn’t seem to be a lot of uproar from the general book buying public. I like your comparison to the days of the robber barons and Ida T. Nicely done.


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