Amazon has opened up hundreds and hundreds of specialty books
outlets that standard publisher refused to publish thinking these specialty
books won’t sell. But they do sell, millions of them.
Called “American Monopoly: Amazon’s Anti-Competitive Behavior Is
in Violation of Antitrust Laws,” the white paper was written by the ABA’s
advocacy team and follows the release last October of the Congressional report
on Big Tech and antitrust by the House Justice antitrust subcommittee, chaired
by Rep. David Cicilline (D.-R.I.), and the introduction last week of related
legislation by Senator Amy Klobuchar (D.-Minn.), chair of the Senate Justice
antitrust subcommittee.
“Piles of Amazon boxes sitting on porches and in lobbies is
becoming the norm, but there are costs and consequences to our communities,”
ABA CEO Allison Hill commented. “Amazon’s overreaching dominance over multiple
markets has squelched competition and new businesses. If Amazon were broken up
today, we firmly believe the many markets in which they dominate would quickly diversify
and grow and our communities would be the beneficiaries.”
In the 21-page white paper, the ABA called the company’s
bookselling record “a case study as to how Amazon dominates entire categories
of retail and poses a threat to the competitive process. Amazon controls 42% of
all sales of physical books, and an estimated 75% of online sales of physical
books. Further, Amazon controls 83% of e-book sales, more than 40% of new book
sales, and about 85% of sales by self-published e-book authors. For comparison,
Amazon’s share of the online bookselling submarket is as large as Standard
Oil’s market share before it was dismantled into 34 companies in 1911.
"Nowhere is Amazon’s conduct more of a threat to the
competitive process than in the online bookselling submarket. Amazon has
engaged exclusionary tactics, including predatory pricing, to gain market power
and has leveraged its substantial market power against publishers unfairly.”
The paper continues, “Amazon’s anti-competitive conduct extends
to the pricing of its proprietary e-book reader and tablet, the Kindle and
Fire, which are ‘loss leaders,’ meaning products priced at or below cost to
stimulate the sale of more profitable goods or services. Amazon’s intent is to
leave consumers with no alternative but to purchase e-books and other products
from Amazon, rather than its competitors, regardless of price.”
The paper goes into detail, too, about Amazon’s practices in
other markets and in other ways. The paper concludes that “when Amazon’s
behavior is taken as a whole, it is clear that Amazon is unlawfully restraining
trade, is engaging in exclusionary, anti-competitive pricing schemes, and is
using both its horizontal and vertical integration to create barriers to entry,
increase Amazon’s market power, and unfairly manipulate marketplaces. Amazon
has used exclusionary, anti-competitive pricing schemes to gain market power
and illegally monopolize the e-commerce retail market, specifically, the
first-party online retail market, the third-party e-commerce marketplace
market, the web services market, and the third-party logistics services
market.”
It also notes the company’s “power to assert dominance over
creators, workers, and local communities,” which includes poor working
conditions for warehouse employees and brutal effects on bricks-and-mortar
retailers around the country.
The ABA recommends that Amazon “be broken up into at least four
autonomous companies: retail, e-commerce marketplace platform, web services,
and logistics. Additionally, given how Amazon uses systemic below-cost pricing
on books in particular, we urge consideration that Amazon’s retail operations
be divided into book retail and other retail.”