Why do they hate (and fear) Amazon? Count the ways

Is a way of life about to get wiped out by the coldly efficient juggernaut that Jeff Bezos has created?

Sarah Tew/CNET

Is the future of book selling going to hinge on making a choice between a big corporation and a national treasure?

Earlier today the government released hundreds of e-mails received by the Justice Department in the aftermath of announcing its price-fixing lawsuit against Apple and some of the nation's largest book publishers . The e-mails, now available on the DOJ Web site, offer a window into the angst felt by bookstore owners, literary agents, and authors who worry that the government may be paving the way for Jeff Bezos' coldly efficient juggernaut to wipe out a generations-old way of life that has been part of the American cultural fabric.

Hyperbole? Perhaps, but the outcome of the case will have ramifications for Apple, Amazon, a clutch of big publishers and, perhaps, the thousands of book retailers still in existence throughout the country.

"These brick and mortar bookstores are a vital part of the bookselling community," wrote Denise Marcil, who runs a literary agency in New York. "By being able to physically see and handle books, consumers are able to purchase titles in ways they wouldn't necessarily be able to online, and are also opened to a more diverse purchasing experience than they would be if only virtual bookselling existed."

As a former book browser who has since gone over to the dark side, I can't argue otherwise. Do we lose more than we gain? I can't quantify that, though I'm sure that we're losing something in the trade. Like the corner music retailer, booksellers are stuck with a business model that's increasingly less relevant in a business dominated by price and delivery. That doesn't make it necessarily a better world but it is the future.

The government does not get to decide platonic questions of "the good" and so if it does win its case and forces publishers to return to the previous e-book business model (which benefited Amazon.com), what happens to brick and mortar book outlets then? Marcil has no doubts it will lead to disaster:

"Physical bookstores allow consumers to browse for titles -- a vital function of the bookselling market that the virtual book vendor cannot provide," he wrote. "When consumers go into physical bookstores, they can head to a specific section if they know what they are looking for; if they don't, however, they are also able to browse until they find something that captures their interest. The proposed settlement, by making these brick and mortar bookstores the more expensive, less desirable alternative to virtual booksellers, undermines the variety of purchasing venues and experiences available to consumers."

Barry Moser, a professor of art at Smith College, as well as "an author, illustrator, and a designer of books," offered the analogy of paving over Yellowstone National Park "so more cars can be parked and commercial, corporate vendors can open shop to sell junk." In its complaint, the Justice Department accused the publishers and Apple of violating the Sherman Act by conspiring to shift the e-book business model to one where where prices are established by the publishers. The government seeks to "prohibit the collusive setting of price tiers that can de facto fix prices." It also wants to void Apple's e-book contracts with publishers that "impedes the e-book retailer's ability to set" retail prices.

For his part, Moser was not buying that argument.

As a society, as a people, we lose far more than we gain -- since what gain there might be will not be for the commonweal but for the few Big Dogs who gather the meaty bones unto themselves," he wrote. "And by dint of their formidable size and rapacious appetite, the Big Dogs deny the smaller dogs even the smallest bones--leaving them to starve to death, which is precisely what is happening to independent book stores. And Big Dog cares not a whit. My life, and countless other lives, will be seriously diminished if either national parks, or independent booksellers, or any other national treasures are bought up (or eliminated) in order to serve increased corporate assets--and control."

What follows are excerpts from their missives -- as well as a few others contained in the DOJ archive.

I would just like to register my opinion -- my passionate opinion, by the way -- as a longtime member of the Authors Guild and a nonfiction author of nearly twenty books, including a number on ethics.

Amazon.com is the party guilty of price-fixing -- and of becoming a monopoly -- and of contributing to the demise of brick and mortar stores, such as Borders, which provide readers and writers alike (and others) a place to peruse through titles, compare one book to another and even to schmooze. Such brick and mortar stores, including and especially the local neighborhood ones that are as much risk because of amazon's price fixing policies, are essential to our very culture, to our society, our freedom, and our intellectual property.
~ Susan Neiburg Terkel

I am amazed that the DOJ is going after the small guy with action that encourages the monopolist to grow more powerful. Amazon is a run-away tyrant, using its clout to squash the competition. The DOJ's action in this case is encouraging Amazon to grow even stronger. The DOJ is on the wrong side of the issue, here. A healthy, competitive book market is vital to our culture. It's not in the public interest for the government to help Amazon use e-books to target traditional brick-and-mortar bookstores.
~ Sam Rosenthal

As a historian of the United States, I find the logic of this antitrust charge against the publishers quite at variance with the anti-trust tradition of the United States, going back to the Jacksonian period of our history. The objection was always to monopolization of the market by an overlarge and powerful economic actor. Although as a government agency, this was the underlying logic of Jackson's bank veto and, in a private example, the Charles River Bridge case. (It was also the issue in the B&0 Railroad and C&O Canal decision in the Chancery Court of Maryland at the same time. The idea was that our society flourished with a maximum number of economic actors. That was also the case in more modern times with the breakup of Standard Oil and AT&T. Amazon is the equivalent of AT&T and Standard Oil. They publishers are not, even a group that may or may not have discussed a common strategy. The nearest thing to Standard Oil, not only in structure but also in ruthlessness, is Amazon. The suit is pointing toward the wrong target.
~ Thomas Bender University Professor of the Humanities and Professor of History, New York University

>

I'm a journalist, author of four books. I could literally not believe it when I first read in the NY Times (my alma mater) that DOJ was suing publishers and trying to protect Amazon's predatory pricing of e-books. You will kill off the remaining bookstores. And that will destroy writers, and our literary culture.

Is that a proper role of government?

What are you guys thinking? Or drinking? Or smoking?

Is this a case of ignoring real, destructive crimes that are committed by the powerful (financiers) and going after the weak instead? Shameful!
~ Ann Crittenden, former economics reporter for the NY Times

We believe that the proposed settlement between the Justice Department and the three major publishers in the e-book collusion suit is irreparably unsound, will stifle competitive growth, is not to the benefit of the general public and will seriously diminish the value of the intellectual property of authors in general.
~ Timothy F, Knowlton, Chief Executive Officer, Curtis Brown

I support the AAR's position not only as a literary agent who wants to protect the value of my clients' intellectual property from Amazon's unfair and predatory discounting, but also as a reader and consumer who would like to choose from various retailers and e-booksellers in a healthy marketplace. The proposed settlement would threaten the book community, harming publishers, booksellers, and our writers who depend on book sales to earn a decent living. I very much hope you will consider the book co unity plea against this settlement.
~ Miriam Altshuler, Miriam Altshuler Literary Agency

I'm one more bestselling writer who thinks striking down the agency model will help only the bad guys. Please reconsider this decision.
~ Josh Bazel

My name is William C. Dietz and I am a New York Times bestselling author. I have published more than 40 books. A healthy, competitive book market is vital to our culture. It's not in the public interest for the government to help Amazon use e-books to target traditional brick-and-mortar bookstores.
~ William C. Dietz

When I opened my store, the state expected me to collect and remit sales tax -- and I do. I think we should expect the same of any online retailer that has a physical presence in the state, via a store, office, warehouse, or online affiliates that act as sales agents. Clearly, the surest way to level the playing field for Main Street retailer like mine is to support the proposed federal legislation. These bills would leave no room for a judge or lawmaker to misinterpret sales tax law.
~ Suzanne Droppert, Liberty Bay Book
I wish I could say that I understand why the Department of Justice has seen fit to launch this lawsuit and thereby aid Amazon in its efforts to wipe out every shred of competition. Given that Amazon was forcing publishers to sell their books at a loss, I don't really see that publishers had any other choice except to protect their interests and for Amazon to institute agency pricing. If Amazon wins this suit, it will be a disaster for brick and mortar book stores, for publishing, and ultimately for the consumer. Amazon is set to become the Standard Oil of the marketplace and history tells us that monopolies do not breed healthy competition, which is essential to making the market place fair to both buyers and sellers. Please be conscious of the effects of your decision.
~ Laraine Flemming

The (Book Industry Charitable Foundation) Foundation believes that the Agency Model corrects a distortion in the market which, if uncorrected, will reduce or eliminate competition both on the publishing level and at the distribution level. By leveling the playing field, this model is pro-competition and enhances consumer choice, both leading to a stronger overall book industry.
~ Pamela French, executive director

Amazon's marketing of its proprietary-format e-book reader at prices significantly below manufacturing cost makes clear the company's strategic goal: to lock consumers in to this device and thus dominate and control the e-book market. Amazon's device is specifically designed to use a format other than theopen industry-standard EPub format. As Amazon increases its market share via Kindle, there will be less and less incentive for publishers and authors to use the Epub format, which will allow Amazon to dominate the market for e-books even further. Surely it cannot be sound public policy to encourage such a monopoly. Further, Amazon's direct entry as a publisher itself clearly gives the company all the more reason to wreak havoc on the rest of the publishing industry by exploiting the ability to promote its own books over those of competitors and independent authors.
~ Henry Hamman, plateaubooks.com

We need a healthy, competitive book market. It is vital to our culture and our country's future. It's not in the public interest for the government to help Amazon use e-books to target traditional brick-and-mortar bookstores. Nor, even more importantly is it in anyone's interest that Amazon become the sole purveyor and "producer" of knowledge in our country. Because that is precisely what will happen when Only Amazon sells and produces books.
~ Eunice Lipton, writer and reader

The terms of the proposed settlement are based on the false generalization that the introduction of the agency model of pricing resulted in the overall increase of e-book prices. This is true for only a small percentage of e-books, specifically The New York Times bestselling titles which generally increased from $9.99 to $12.99. This single price shift, though, is not representative of the changes to pricing and competition in the market after the introduction of the agency model. In fact, before the agency model many titles were sold by Amazon for prices significantly higher than $9.99...

In its attack on the agency model of price setting, the proposed settlement will allow Amazon to continue its predatory pricing tactics. The settlement will enable Amazon to continue to sell front-list titles at a loss as long as vendors don't lose money on the entire list over the course of twelve months. As a rich and well-established corporation, it is unlikely that Amazon will lose money by selling these front-list titles at a loss when it will make back that money in the market of back-list titles that it has come to dominate. Brick and mortar bookstores depend on these front-list titles to thrive; allowing Amazon to sell them at a loss will only further the company's control over the e-book and back-list physical book markets while undercutting sales in physical bookstores.
~ Denise Marcil, president, Denise Marcil Literary Agency, Inc. (NY)

I am an author, illustrator, and a designer of books (both trade and rare) who was honored in 1983 with The National Book Award. I am married to the manager (Emily Crowe) of one of New England's (and America's) venerable traditional bookstores: the Odyssey in South Hadley, Mass.

Traditional bookstores in our society have been, and I hope to God will continue to be, national treasures, not unlike our National Parks. Selling them out, undermining them in favor of monopolistic, corporate interests is not unlike paving Yellowstone Park so more cars can be parked and commercial, corporate vendors can open shop to sell junk. As a society, as a people, we loose far more than we gain--since what gain there might be will not be for the commonweal but for the few Big Dogs who gather the meaty bones unto themselves. And by dint of their formidable size and rapacious appetite, the Big Dogs deny the smaller dogs even the smallest bones--leaving them to starve to death, which is precisely what is happening to independent book stores. And Big Dog cares not a whit. My life, and countless other lives, will be seriously diminished if either national parks, or independent booksellers, or any other national treasures are bought up (or eliminated) in order to serve increased corporate assets--and control.

But, unlike the Big Dog, our government should care. Our government's obligation, it's sacred mandate, is to govern. Govern big and small equitably, with no unearned or privileged favor paid to either.
~ Barry Moser, professor of Art Smith College

 

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