What’s Troubling About Amazon?

Amazon Apple DOJIn Cheap Words, an interesting article in The New Yorker this week, George Packer claims that Amazon is “good for customers,” but wonders whether the online leviathan is “good for books.”

It’s hard to tease out the salient points of Packer’s voluminous essay, but he seems to believe that Amazon’s corporate culture and impact on the publishing industry have not been “good for books,” not that he clearly defines what, in his opinion, is good for books or what would be definitively bad for books. His evidence that Amazon has “no real interest in books” is anecdotal (that a former Amazon employee recalls never hearing his/her colleagues say, ‘Hey, what are you reading?”), based on stereotypes about engineering-oriented folks (as though people like that don’t read), and based on sources in the publishing industry who have the most to lose from Amazon’s continued success.

He portrays Amazon as a greed machine without bestowing equivalent contempt on the largest traditional publishers, who, along with Apple, are no saints. For example, Packer is critical of the antitrust claim brought by the Department of Justice against Apple and five large publishers because they conspired (there really isn’t any other word for it) to switch to a different pricing system overnight for the purpose of forcing Amazon to charge more than $9.99 for e-books.

Packer claims that, as of early 2010 (when the conspiracy to introduce the different pricing system to e-book pricing occurred), “Amazon effectively had a monopoly in digital books and was selling them so cheaply that it resembled predatory pricing—a barrier to entry for potential competitors.” But there’s a much more obvious explanation than “predatory pricing” for why Amazon controlled 90% of the e-book market in early 2010: the Kindle was introduced in late 2007 (and was in its third version by 2010), while Barnes & Noble didn’t introduce the Nook until late 2009 and Apple didn’t release the iPad until April 2010.

That timeline also puts into perspective Packer’s claim that the subsequent decline in Amazon’s power in the e-book market from then onward shows that, “before the feds stepped in, the agency model introduced competition to the market.” That’s just plain wrong: as of early 2010, the Nook had just come on the market and the iPad was about to be introduced regardless of whether the new pricing system was used. If the publishers hadn’t switched to the new pricing system, the iPad would have had the iBooks on it just the same, only it would have been forced to compete with Amazon’s low prices. The new pricing system did nothing to help competition, it was just a scheme to raise prices for ebooks from the big publishers because the publishers thought that Amazon was selling their books too cheaply. That’s not something worthy of praise — it’s an antitrust violation, just as U.S. District Judge Cote decided it was. I hope the Second Circuit affirms the verdict against Apple on appeal (all the publishers already settled the claims).*

None of this is to say that Amazon is without fault. Rather, whatever its faults (which certainly include its ardent opposition to unionization), Amazon is really no worse than its competitors, like Apple or the big publishers. They are all on a hegemonic quest to dominate the market, except that, while the big publishers and Apple colluded to raise prices to the detriment of consumers, Amazon has been expanding consumers’ access to books by introducing new products for readers (like the various Kindles), having an open market for virtually any writer, and pushing publishers to reduce prices.

Packer claims that Amazon’s pro-consumer tactics have resulted in “unparalleled selection, price and convenience,” a combination that is so good that “even [Amazon’s] bitterest critics reluctantly admit to using [it].” At the same time, though, Packer questions the desirability of Amazon’s continued success if it results in the disappearance of the traditional publishing industry (the “gatekeepers”). He ends his essay by asking, “When the last gatekeeper but one is gone, will Amazon care whether a book is any good?”

There are at least two big problems with this question.

First, it’s based on the faulty premise that the traditional “gatekeepers” are actually worth keeping. What is “good” literature or nonfiction is largely a matter of taste, and quite frankly, much of what the major publishers force into the market rarely interests me. Why should I care if “Racist Penguin House” or “Simon, Schuster, & Shame” disappear? Anyone who claims that these goliaths are choosing the best of what authors are writing is fooling himself, and towards the end of the article Packer struggles unsuccessfully to make the case for why these middlemen should exist at all.

Second, the question is also based on the faulty premise that Amazon’s foray into publishing inherently lowers the quality of books and somehow precludes the publication of good books. Let’s not forget that grammatical errors and “cheating on the plot” aren’t limited to self-published books. I purchase both self-published and traditionally published books, and most of the time I cannot discern a difference between the two (so much for the gatekeepers!). I read reviews from bloggers I trust, and I always skim the sample, and I thus end up with a far better selection than if I blindly believed that a particular publishing house would only release books that are worth my time. Plus, when it comes to self-published books, if a book happens to be far worse than it appeared, at least I’ve only wasted $2.99 or $4.99 and not $12.99, $17.99, or more.

A “gatekeeper” to the world of books is a problem, whether it’s Amazon or anyone else, which is why we have antitrust laws in the first place. At some point, even a purportedly pro-consumer company like Amazon could turn on customers who have nowhere else to go for books. However, the means of limiting Amazon’s domination of the market isn’t to permit the big publishers and Apple to fix prices through collusion (as Packer implies). Rather, it’s to make sure we have the tools to deal with Amazon — or any other monopoly or trust — if they use their power to harm the market and exploit the consumer. If, for example, the Supreme Court had a majority of pro-consumer Justices who believed in vigorous antitrust laws, we would have little to worry about.

*For more background on the issues in the DOJ lawsuit, see In Defense of the DOJ’s Antitrust Lawsuit Against Apple and the E-Book Publishers (which was written when the DOJ filed the complaint).

31 thoughts on “What’s Troubling About Amazon?

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  7. I just got back from a writing conference, and there was so much talk about traditional publishing versus self publishing, including whether or not we should have the “gatekeepers,” and the future of books without them, so it was interesting to read this post right after that.

    I have mixed opinions, but like you I read traditionally and self published books, and have seen good and bad in both. My worry with Amazon is if they do corner the market on e-books, the current high rate of royalties that indie authors enjoy now (I believe it’s 60-70%?) might vanish as there will be no incentive for Amazon to keep it that high. I guess time will tell…now is certainly an interesting time to be a writer! 😉

    1. That must have been a very interesting discussion at the writing conference! If Amazon loses its pro-consumer, pro-author position, then hopefully other companies will meet these demands. Amazon shouldn’t be the only option for readers or writers.

  8. Star

    The Packer piece didn’t keep my attention, but thanks for summarizing and responding to it. I have a tendency to think Amazon is the “bees knees,” but I need to give its “hegemonic quest” for world domination more thought.

    1. It’s a long and rambling piece, but I thought it was interesting. I certainly wouldn’t want Amazon to take over completely, but collusion between the publishers and Apple isn’t any better.

  9. When Borders went out of business, our city lost our only book store. We had no Mom and Pop stores to begin with and we still don’t. The only place to buy books within our city limits is Target and Walmart. And what kind of selection do they have? The only option we have for buying books is online or driving 30 minutes. I don’t have time to drive half an hour to browse for books. I have been buying books from Amazon for awhile and will continue to do so. 🙂

    1. We don’t really have any indie bookstores either (at least not very close to me). Our local Borders is gone, but we still have a Barnes and Noble, which only stocks what publishers want to force down our throats and not what I particularly would want to read. So, like you, I prefer Amazon. Thanks for stopping by!

  10. This is definitely not a storm waiting to happen. It is a storm we are all actively in right now! Excellent post. If I was Word press- I would fressly press this one!!! I am all about good reading and I will pay the cheaper price if I can find what I want, but I do not shy away from paying a little more especially for the mom and pop book stores that are still out there. Call me old fashion, but I love a good book from the local book store! And if it helps to keep them in business. Why not!

    1. Thanks, Alesia! That’s very nice of you to say. Amazon is such an interesting topic. I also like to support indie bookstores, not that there are many in my area. We only have large chains, which usually stock a limited selection of what the publishers want to force down our throats (and not what I would prefer to read).

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  12. I think it would be interesting to hear more from authors about what they think of Amazon. As a reader, I’m sorry but their prices cannot be beat. I’ve bought and read more books since owning a kindle than at any other time in my life. I don’t want to save money on the backs of the authors, but if their cut is comparable to one of the big publishing houses, then who is really hurting here? Big publishing? Excuse me if I’m less than sympathetic. They only focus on the “big” names, anyway, and leave most middle market authors to do their own marketing.

    1. Hi Beth! I would love to hear from from authors about their views on Amazon, too. Theo Fenraven (in the comments) added his perspective as both a self-published and traditionally published author. It sounds like Amazon is a mixed bag, but has opened up doors to a wider range of authors who never would’ve had a chance before. As a consumer, I really do wonder about whether it’s worth it to pay the higher price when it just goes to the publishing house. These days, they don’t seem to add much value once you know how to choose the right self-published books.

  13. I read the Packer piece over the weekend, and my reaction was mostly like yours: I was a little unclear on what Packer would recommend to replace Amazon, or whether the previous publisher-driven system was really good for books. While I found some of Amazon’s treatment of publishers to be unfair and coercive (especially in the issue of the fees Amazon charges publishers, which fees are even higher percentages for smaller publishers), I’m not sure that Amazon is the problem at the heart of the issue of so-called “good” books.

    1. Packer’s piece was all over the place. Amazon certainly deserves a lot of criticism, but no more so than the big five publishers and Apple. I wonder if Packer felt he couldn’t criticize the publishers because he’s a traditionally published author. Thanks for the comment and thanks for the link!

  14. I have a different perspective, being a trad- and self-published author. Amazon is where most writers make the bulk of their money. It’s certainly where I get mine. No other venue (Kobo, B&N, iTunes, etc) gives me as much. In countries that allow it, we make 70% royalties on our titles (otherwise, it’s 35%, which is about the same publishers currently offer). The mind-boggling number of self-published books that are horrible is a fact, and that makes it hard to find the well-written, professionally prepared books, but that we can self-pub at all still amazes me. I wouldn’t have dreamed of doing this ten years ago.

    1. Thanks for adding your perspective! I agree that there are tons of horrible self-published books out there, but I actually think it’s pretty easy to avoid them. Often, the self-published books I buy are written by bloggers I follow (like you!). Other times, I know the book isn’t crap because I saw a review from a blogger I trust (as opposed to an Amazon review that could just be the author’s brother) and because I read the sample. Following these methods, most of the self-published books I’ve read are at least as good as the middle-of-the-road traditionally published books and sometimes as good as the very best publishing houses have to offer.

  15. Like everything, it is all about greed and money. Cheap works for the consumer, but not the shareholders. I think this encourages authors to become self published, only problem being people will still choose on price I think. Many good books at bargain pricing. But self-publishing would mean less cost in producing the book but more initial outlay for the author, no? It seems the same thing that happened to music too.

  16. I agree with the courts that Apple and the publishers colluded. In my opinion though, Amazon has too much of grip on the eBook industry. My pipe dream is for everyone to agree on a universal ebook standard (much like DVDs or Blu Rays) and you could buy ebooks from any store for any device. Instead Amazon just dominates and there are several things you can’t find anywhere else but Amazon and can only use on an Amazon device. I think that is wrong.

    1. gerkinkerfluffle

      There are some rare instances in which a book is only available on the Kindle (some potential blockbusters were released initially that way, and there’s the “KDP Select” program that self-published authors can join), but, by and large, Amazon doesn’t force publishers or authors to release their book only in Kindle format in order to make their book available on Amazon. Usually, if you can’t find a book elsewhere, it’s because the author either hasn’t released it elsewhere or because the author chose the exclusive agreement with Amazon.

    2. Interesting idea. I’m not a fan of a single company dominating the e-book market, but Amazon’s control has decreased in recent years. Thanks for stopping by!

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