Annie Lowrey: Amazon Is Not a Monopoly: “Franklin Foer… arguing that Amazon is a monopoly….

…There’s just one problem…. Amazon is not a monopoly…. Foer waives this competitive pressure away…. Businesses compete. Very often the bigger one wins. Foer argues, however, that Amazon’s ‘big-footing necessitates a government response,’ without really explaining why…. He describes us all as complicit in… something. I’m not sure what: ‘We’ve all been seduced by the deep discounts, the monthly automatic diaper delivery, the free Prime movies, the gift wrapping, the free two-day shipping, the ability to buy shoes or books or pinto beans or a toilet all from the same place,’ he writes. ‘But it has gone beyond seduction, really. We expect these kinds of conveniences now, as if they were birthrights.’ Is that really such a bad thing? Amazon relentlessly drives down prices for goods and services and delivers them fast and cheap…. None of this is to say that Amazon should not face new regulations to force it to treat its workers better…. None of this is to say that its harassment of Hachette is right or should be legal or should not face some serious pushback…. But Amazon being a shitty, vicious competitor and Amazon being a monopoly are hardly the same thing.

Annie is, of course, correct. My view:

  1. to protect their hardcover markets by reducing the utility of ebooks by imposing onerous DRM on them;
  2. thinking that even though this then handed a near-monopoly over ebooks to kindle because of first-mover and lock-in effects;
  3. Amazon would then share its monopoly ebook profits with them;
  4. and when the big publishers found out this was not true, they persuaded Apple to help them organize a cartel to try to force Amazon to share some of the ebook monopoly profits;
  5. at which point the Justice Department slapped them down.

If the big publishers wanted to break Amazon’s ebook monopoly tomorrow they could by simply issuing DRM-free ebooks to anyone who had a kindle file. But they really, really do not want to do this. If Hachette does not like the way that Amazon is negotiating with it about the terms under which it can get its books on Kindles, Hachette can solve this problem tomorrow by selling kindle ebooks to kindle owners directly and so bypass Amazon.

The big publishers are a technologically-regressive cartel that collectively have a near-monopoly of print books; Amazon is a technologically-progressive monopoly wannabe of ebooks. Amazon’s wannabe monopoly status was created by and is dependent on the unwillingness of the big publishers to do anything that might accelerate the decline of their hardcover market. That does not seem to me to create on obvious case for the government to put its thumb on the scales on the publishers’ side.