Justice Department asked to investigate Amazon’s "monopolization" of book market

This posting was written by Jeffrey May, J.D.

A group of authors, and the American Booksellers Association—a trade association representing independently-owned bookstores—are asking the Department of Justice to scrutinize the business practices of online retailer Amazon. They are calling on the Department of Justice Antitrust Division to investigate Amazon’s “power over the book market, and the ways in which the company exercises its power.”

In separate letters sent July 13 to William J. Baer, Assistant Attorney General in charge of the Antitrust Division, the groups made their case against Amazon. Among other things, they contended that the online retailer abuses its monopsony power over large and small publishers and harms competing book sellers though predatory, below-cost sales.

The author group, which calls itself Authors United, cites published figures in an effort to demonstrate Amazon's monopoly power. According to the authors, Amazon controls more than 75 percent of online sales of physical books; more than 65 percent of e-book sales; and more than 40 percent of sales of new books.

Also noted by the authors were Amazon's hard-ball business tactics with publisher Hachette Book Group during a long-running contract dispute in 2014 and the retailer’s purported efforts aimed at “content control.” Last year, Authors United sent a letter tothe directors of Amazon, accusing the company of “sanctioning Hachette authors’ books” in order to “enhance its bargaining position” with the publisher. In that letter, the self-identified “literary novelists, Pulitzer Prize-winning journalists, and poets; thriller writers and debut and midlist authors” explained that “[n]o group of authors as diverse or prominent as this has ever come together before in support of a single cause.” During the contract dispute, Amazon allegedly “engaged in content control, selling some books but not others based on the author’s prominence or the book’s political leanings.”

This latest call for a Justice Department investigation comes one month after the European Commission (EC) announced that it had opened a formal antitrust investigation into Amazon's e-book distribution contracts with publishers. The EC is looking into whether Amazon, the largest distributor of e-books in Europe, violated antitrust laws by requiring publishers to give Amazon the right to be informed of more favorable or alternative terms offered to its competitors and/or the right to terms and conditions at least as good as those offered to its competitors.