Target: Amazon CEO Jeff Bezos
Goal: Let Amazon know that its war against publishers is poor corporate citizenship
Online retail giant Amazon.com sells a market-dominating 65 percent of all books sold online, whether in print or digital form. More importantly, Amazon buys about 90 percent of all e-books sold in the U.S., giving it unquestionable monopsony power over the e-book market in this country. Monopsony is “when a buyer of goods has the power to unlawfully lower the prices of what it buys,” what Supreme Court justice Sonia Sotomayor calls the “mirror image” of monopoly. Both monopsony and monopoly “result in a misallocation of resources that harms consumers and distorts markets,” and both are technically illegal.
This hasn’t stopped Amazon from using its power to coerce book publishers large and small into going along with their price-gouging schemes. Amazon sells e-books at below cost, which has already driven all competing e-book devices almost completely out of the market. Now that the company has already achieved market domination, it could raise the e-book prices and begin selling them at full cost. Instead, Amazon has chosen to continue the discounting scheme and pass the loss onto the publishers, who have already had their margins squeezed by the massive industry upheaval concomitant to e-book technology. Needless to say, some publishers have a problem with this plan and have decided to fight back against Amazon’s corporate bullying.
Hachette is one of the largest publishing houses in the U.S. As retribution for the company’s refusal to go along with Amazon’s price-setting strategy, Amazon is punishing Hachette by understocking Hachette titles on its website and by refusing to allow customers to pre-order Hachette books. This has slowed delivery of Hachette books sold on Amazon’s site from days to weeks, and has put Hachette’s entire business in jeopardy.
This isn’t the first time that Amazon.com has used this strategy. In 2010, Amazon had a similar spat with Macmillan, the fifth-largest book publisher in the U.S. Macmillan had proposed a change in business terms, to which Amazon responded by executing what it terms the “nuclear option”—the retailer simply removed the “buy” button from all Macmillan books in its entire online store. Within a few days Macmillan acquiesced, and Amazon’s punishing terms went unchallenged until now.
So far, Amazon has refrained from using the “nuclear option” on Hachette, but the company has no reason to back down unless the government intervenes or public pressure becomes high enough to put them in line. Sign this petition to let Amazon know that you will not stand for its corporate bullying.
Dear Mr. Bezos,
Amazon’s current dispute with Hachette is inconvenient to customers, dangerous for book publishing companies, and unfair to all of the hard-working authors whose livelihoods you are threatening in an attempt to illegally control the e-book market.
Driving independent publishers to ruin and squeezing already tight margins out of authors is both economically unsustainable and morally corrupt. Your corporate bullying and coercive tactics are unacceptable in a free-market environment, and I will no longer support your business as long as you continue using extortion as a business strategy.
[Your Name Here]
Photo credit: Joe Ross via Flickr