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Old 04-14-2008, 06:03 PM   #1
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Is Amazon monopolistic

I read in the thread about the Astak device that Amazon will only license the ability to read DRM'ed Mobipocket books if that is the only DRM'ed format that the device supports. They want it to be exclusive.

I'm sorry, isn't this what MS got fined for doing? Telling Dell and other PC makers that they would only sell them OEM versions of Windows if they didn't put any other browsers, music players, etc. on the PC?

Antitrust law is supposed to protect the consumer, not the competitors. And, while I don't see what MS did as hurting the customer, I could still download Real Player and Netscape and install them... I think what Amazon/Mobipocket is trying to do will hurt the customer.

Most book readers are embedded devices and the end user can not just install another book reader software on it. So, by Amazon forcing Astak to only support Mobi DRM (ie can't support anything else such as eReader, LIT, BBeB DRM formats) this is hurting the customer. I do not have the ability to choose my bookstore and format. This stifles competition to Amazon's benefit hence an abuse of their monopoly as the owner of MobiPocket.

I think this needs to be challenged, if not in court in the court of public opinion. Anyone have a well read blog or something on the topic of book readers or tech in general?

BOb

Last edited by pilotbob; 04-14-2008 at 06:07 PM.
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Old 04-14-2008, 06:27 PM   #2
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I stumbled across http://www.teleread.org/blog/ ...It seems to be well written.

I think you're correct regarding Amazon. But I bet the same thing applies to other vendors too. Bottom line, DRM is evil. I won't purchase drm-encumbered books unless I know that I can easily crack it.
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Old 04-14-2008, 06:30 PM   #3
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Bottom line, DRM is evil. I won't purchase drm-encumbered books unless I know that I can easily crack it.
I'm with you there. But the "average" iTunes buying public doesn't feel so strongly and the ebook market will be much better if no matter what device I have I can buy/use any eBook out there no matter what format.

(But, I didn't mean for this topic to be about DRM, but about having readers that support multiple formats, DRM'ed or not.)

BOb
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Old 04-14-2008, 06:38 PM   #4
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I stumbled across http://www.teleread.org/blog/ ...It seems to be well written.
Looks good... Subscribed. Now, maybe he will pick this topic up and get it to the masses.

BOb
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Old 04-14-2008, 06:39 PM   #5
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Amazon is capitalistic, which is, inherently, somewhat monopolistic. Are they playing serious hardball? It sure seems that way, but while that's kinda obnoxious, it's not illegal. And there maybe someone living in a mountain cave somewhere that doesn't already know that Amazon is obnoxious, but there can't be too many there.
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Old 04-14-2008, 06:45 PM   #6
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..but while that's kinda obnoxious, it's not illegal.
Maybe, but I'm not quite sure. I never thought that MS having PC makers to ship their OS unencumbered with other junk was illegal either. Amazon is limiting the ability for me to buy a device that supports more formats than theirs, and they benefit from all the eBook sales. Granted, I could but another device so it "may not" be illegal.

If Astek can what they should do is try to perhaps allow the end user to install other format readers which means they aren't shipping compenting format support.

Actually I prefer the days where my new Dell didn't come loaded with 10GB of spyware, shareware, trialware and other crap that I have to spend hours removing.

BOb
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Old 04-14-2008, 06:57 PM   #7
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I meant that trying to eliminate the competition isn't illegal, it's only succeeding that runs afoul of anti-trust.

No one is obligated by law to make any particular product with any particular features. There are products that have legally mandated features, but no one is forced to make them, and they're the exception rather than the rule. Basically, as long as a product/feature isn't downright hazardous, you can make it or not at your discretion.
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Old 04-14-2008, 07:01 PM   #8
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they might not have crossed over into illegality yet, but they're definitely well into megalomania, and i don't much like the direction they're taking. the mobipocket / astak thing is a good example of why i have stopped buying from them.
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Old 04-14-2008, 07:02 PM   #9
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Quote:
Originally Posted by NatCh View Post
There are products that have legally mandated features, but no one is forced to make them...
Granted no one "forced" Dell to start making PC's. But, seeing that they required an OS to use and MS basically had the only one available at the time the used that situation to "force" Dell to not install apps that compete with the MS versions. (Which I never understood because MS didn't sell IE or Media player, but I digress).

So, your right, no one is forcing Astak to make a book reader. But, they want to support multiple formats including Mobi and Mobi is the ONLY place you can get Mobi support Amazon is kind of "forcing" Astak to not install competing format's readers. Seem very much the same to me... I'm not sure why you see it differently.

BOb
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Old 04-14-2008, 07:13 PM   #10
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Quote:
Originally Posted by pilotbob View Post
Granted no one "forced" Dell to start making PC's. But, seeing that they required an OS to use and MS basically had the only one available at the time the used that situation to "force" Dell to not install apps that compete with the MS versions. (Which I never understood because MS didn't sell IE or Media player, but I digress).

So, your right, no one is forcing Astak to make a book reader. But, they want to support multiple formats including Mobi and Mobi is the ONLY place you can get Mobi support Amazon is kind of "forcing" Astak to not install competing format's readers. Seem very much the same to me... I'm not sure why you see it differently.

BOb
yes i think i rather agree with pilotbob here. but then i tend to think that monolithic corporations are the devil anyway.
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Old 04-14-2008, 07:16 PM   #11
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Quote:
Originally Posted by pilotbob View Post
So, your right, no one is forcing Astak to make a book reader. But, they want to support multiple formats including Mobi and Mobi is the ONLY place you can get Mobi support Amazon is kind of "forcing" Astak to not install competing format's readers. Seem very much the same to me... I'm not sure why you see it differently.
Well, Amazon is certainly trying to get Astak not to support other formats, on that we agree.

I think I don't so much see it differently as I was looking at it from a different perspective: I was looking at it from a legal perspective, rather than a business perspective. Naturally that would lead me to different conclusions -- apples and oranges, you know.

That being said, I do see a difference between "having no other available/practical option" and "being coerced into choosing a particular option by some outside agency," but it's an abstract difference. If there's just no other option (such as Dell going with Windows because there wasn't really another viable OS) then there's no forcing involved, only a very limited set of choices, simply not doing whatever it is being one of them.

In the case of MicroSoft making their sale of the OS to Dell conditional on what else Dell puts on the machine, yeah, that was, at minimum MicroSoft using its position to control (force) Dell to behave in a particular way.

That definitely falls under my definition of obnoxious, possibly unethical, depending on the details (i.e. was it a "we won't sell to you unless ...." or was it a "we'll give you a discount if ...."), but I don't really see that it is or should be illegal. Dell could tell them to go sit and spin and sell their PCs without an OS at all, but that would have hurt their sales. Obviously it was a very unattractive choice, but it was still a choice.

Further, I totally agree that MicroSoft was being extraordinarily bone-headed about the not loading apps that compete with stuff they didn't sell in the first place. New depths of bone-headedness, that.
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Old 04-14-2008, 07:46 PM   #12
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Quote:
Originally Posted by pilotbob View Post
Granted no one "forced" Dell to start making PC's. But, seeing that they required an OS to use and MS basically had the only one available at the time the used that situation to "force" Dell to not install apps that compete with the MS versions. (Which I never understood because MS didn't sell IE or Media player, but I digress).
This is the key issue. The reason that MS was found to be in violation is that they were, essentially, the only game in town. Not the only source of Windows, but the only source of a mass-market OS.

That is not the case with Amazon. They are the only source for Mobi, but Mobi is not the only protected ebook format, as eReader (Fictionwise), Sony and Adobe would happily point out. Just because Company X wants to make a reader, and wants to license my software for use on that reader, does not in any way compel me to grant such a license. I am free to negotiate most any terms I like, including the possibility of an exclusivity agreement. You still have consumer choice in terms of comparable competing products (the aforementioned products by Adobe and others).

Similar idea is the sale of cell phones -- the popular ones are often sold exclusively through only one carrier. So if you want the latest LG Whatever, you have to go through a specific carrier to get/use it, but since there are lots of competing phones to choose from, this is not a monopoly.

Back to the issue at hand, an economist would call this imperfect competition (barriers to entry, non-homogeneous products, etc.). You might make an argument for an oligopoly as there are relatively few companies competing, but since the various companies are not cooperating to set prices, limit features, etc., it would be a tough argument to make. OPEC is an example of an oligopoly.

Next week on EconToGo, we will discuss the difference between a monopoly and a monopsony.

Jack

Last edited by Jack B Nimble; 04-14-2008 at 08:06 PM.
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Old 04-14-2008, 07:59 PM   #13
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Looking over the thread, I just realized something funny (well, the other two econ majors out there should laugh). The answer to your basic question " Is Amazon monopolistic?" is yes in econ terms, but a monopolistic market is not the same as a monopoly. A monopolist market, by (economic) definition, has many sellers, not just one (counter-intuitive, I know), and perceived product differences. That pretty well describes this sitch.

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Old 04-14-2008, 11:24 PM   #14
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Next week on EconToGo, we will discuss the difference between a monopoly and a monopsony.

Jack
You make good points. But, when Google argues to the FTC that MS merging with Google would be "bad" for consumers what they really means is it would be bad for Google since MS and Yahoo combined would be better able to compete with Google.

Anyway... I guess Astak's best recourse here is to say to Amazon... we are producing a reader, we are including eReader, ePub and MS LIT support on it. We would like to include Mobi support also, however, if you are not interested we will be happy to ship it without that support which would reduce the number of devices that could use a MobiPocket format. Which means less MobiPocket format sales, our customers will choose LIT or eReader or ePub. Call us if you cange your mind.

BOb
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Old 04-14-2008, 11:37 PM   #15
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Since many publishers still seem to be locked into the DRM business model for selling ebooks, Astak simply wants to allow buyers of their device the right to purchase these books. As noted before they have many choices on which format or formats they choose to include. Amazon simply wants to maximize future revenue by ensuring that all book purchases are in mobi format.

The Gen3 shipped with only mobi as a protected format and no one raised an eyebrow. It is also the only protected format available on the iLiad as I remember. I cannot think of one dedicated reader that has more than one protected format. (Yes, some cell phones/PDAs have more than one.)
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