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Some Say Amazon Bully Tactics Against Publishers May Violate Anti-Trust

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MAIN NEWS HEADLINES
April 3 – April 10, 2008 Edition

Some Say Amazon’s Bully

Tactics Against Publishers

May Violate Anti-Trust

NEW YORK, NY/4/3/08–BookSurge, the print-on-demand subsidiary of Amazon.com, has caused controversy among a number of publishers after the company’s strong-arm tactics were publicized by the Wall Street Journal, O’Reilly Tools for Change program chair Andrew Savikas, and others.

Apparently, BookSurge has told publishers, both large and small, that only print-on-demand books printed by BookSurge will feature the “buy” button on Amazon pages. Thus, books printed by arch rival LignthingSource, the POD arm of Ingram Industries or other competitors, would be excluded for sale on Amazon.com. An Amazon spokesman has told the media that the new policy will allow it to match books with other products for sale on the site. Third party vendors can, however, still sell their books through Amazon’s Advantage Program, which is a costly option for many.

Some publishers are saying Amazon leaves them no choice but to use BookSurge services because their authors expect to see the “buy” button on their titles.

On his blog this week, O’Reilly TOC’s Andrew Savikas said: “We often hold up Amazon as an example of one of the original Web 2.0 companies. Their survival amid the tech meltdown was driven largely by the value of the data they’d acquired through thousands of reader reviews, recommendations, and “people who bought this bought that” collaborative filtering. Amazon was a system that grew more valuable with more users: a network-effect-driven data lock-in. . .

“But today’s news from Amazon about Print-on-Demand is the latest move from Amazon revealing a trend toward much more aggressive explicit lock-in attempts. (Not that it’s an entirely new strategy from the folks that brought you the “one-click” patent). Amazon has effectively told publishers that if they wish to sell POD books on Amazon, they must use Amazon as the POD printer. Small/self publishers are unsurprisingly feeling bullied. . .

“Lock-in per se is almost always good for businesses, at least initially, and that’s certainly the case here. But rather than building or improving a system that’s built to implicitly add another brick into the barriers of entry every time someone uses it, Amazon is taking the shortcut of using market dominance to dictate favorable terms. Of course, Amazon is not a charity, and if Jeff & Co. believe this is the best way to create a sustainable competitive advantage, that’s their choice — but publishers will defensively respond to this by treating Amazon more like an adversary than a partner ( eBay has some experience on that front), which in the long run isn’t good for anybody.

One bogger commented that a good case can be made that what Amazon is attempting to do violates anti-trust laws. Waiting for federal antitrust action would take many years–years to get the Justice Department to act, years of trials, years of fussing over what the court decision means. . . Action at the state level, however, could move much faster, particularly if it involves off-the-record contact and a somber warning from those who can make trouble for Amazon. The blogger urged people to contact the Office of the Attorney General, Antitrust Division in Seattle, which is about a ten minute drive from Amazon headquarters. He have this website and phone number for the Antitrust office: http://www.atg.wa.gov/Antitrust/default.aspx. Telephone: 206-587-5510

Read the full original post on the O’Reilly Tools of Change for Publishing blog. Also see: http://radar.oreilly.com/andrew/