Legal web site: "Please stop calling Amazon a monopoly"

[fjtorres]

From the litigation and trial web site, fallouf from the laughable piece in THE NATION:

http://www.litigationandtrial.com/20...azon-monopoly/

"Please stop calling Amazon a monopoly":

A “monopoly” is when one supplier of a particular product or service is able to control the market. That does not remotely describe Amazon: the vast majority of books sold by Amazon are supplied by someone else, i.e., the publisher, and those same books are available elsewhere. As Hachette’s own statement on the Amazon dispute says:

HBG’s titles are widely and immediately available on barnesandnoble.com, powells.com, booksamillion.com, walmart.com, target.com, overstock.com, and in thousands of great chain and independent bookstores across the country.

It is rather hard to have a “monopoly” over sales of something when the exactly same product is also sold online, through the largest retailers in the country, and through “thousands” of independent stores.

Along the way, he similarly tackles the other m-word getting misused:

A “monopsony” is when one buyer of a particular productive or service is able to control the market. (Consider, for example, if there were several commercial airplane manufacturers, but only one commercial airline.) “Monopsony” is potentially a better fit for Amazon than “monopoly,” because Amazon’s real pricing power is that it can push a hard bargain with publishers when it buys the ebooks, whereas with consumers Amazon sells the books at or below the prevailing market prices. And, indeed, publishers feel obligated to deal with Amazon given its position as the largest retailer of ebooks.

But the claim just doesn’t hold up. In a monopsony, the monopsonist refrains from buying to force the suppliers to start discounting against one another (because there are no other buyers), until they are no longer making a profit. That simply isn’t the case here. First, the publishers have total control over where they sell their ebooks, and they exercise that power: the “Big Five” chose to not participate in Amazon Unlimited. Second, the ebooks are available all over the place, like Walmart and Target. Apple, for example, has used the feud as an opportunity to discount Hachette’s books. There’s nothing wrong with Apple doing that: this is competitive capitalism working for the benefit of consumers, as it should.

He also takes up the already disproven claims of predatory pricing in detail, at the source.
Good clear writing from a lawyer.

And concludes:

If you don’t like how Amazon deals with ebook publishers, then stop buying ebooks from them!

A boycott is exactly the right idea — vote with your wallets!

Amazon is not Bell Telephone. Amazon is not Standard Oil. Amazon is not the Hollywood studio system.**

If you don’t want to deal with them, you don’t have to; the fact that everyone, from publishers to consumers, continues to want to deal with Amazon is proof enough that they’re not abusing a monopoly position, they’re just doing a better job.

Go ahead.
Listen to James Patterson:
http://the-digital-reader.com/2014/1...oycott-amazon/

Let's see how far that gets him.

[jgaiser]

Poor Patterson. He keeps whining and *still* nobody listens to him.

[fjtorres]

Originally Posted by jgaiser

Poor Patterson. He keeps whining and *still* nobody listens to him.

I'm sure his bookmill co-writers listen to him.

[Apache]

I have never found Patterson's books interesting enough to want to buy or read them.
Apache

[fjtorres]

Originally Posted by Apache

I have never found Patterson's books interesting enough to want to buy or read them.
Apache

Me neither.
But $200M in the bank says somebody likes his brand of "culture".

[crich70]

Ah but Amazon doesn't just sell ebooks. It sells a lot of other things as well. Are we to believe that none of the thousands of things sold are being sold at non competitive prices? I wonder if even Jeff Bezos knows the actual price on every product sold via Amazon.

[fjtorres]

Originally Posted by crich70

Ah but Amazon doesn't just sell ebooks. It sells a lot of other things as well. Are we to believe that none of the thousands of things sold are being sold at non competitive prices? I wonder if even Jeff Bezos knows the actual price on every product sold via Amazon.

Non competitive prices?
Not for long.
Remember, Amazon is all about data mining and maximizing the utilization of their infrastructure.

If a product's price means it's not pulling its weight they haggle a better price or drop it. (And they do drop products from their catalog regularly.) One way they do it is by letting one of their affiliated vendors get the sale.

They can always drop the price and take a loss just to get it out of the system.

[pwalker8]

Originally Posted by fjtorres

From the litigation and trial web site, fallouf from the laughable piece in THE NATION:

http://www.litigationandtrial.com/20...azon-monopoly/

"Please stop calling Amazon a monopoly":



Along the way, he similarly tackles the other m-word getting misused:



He also takes up the already disproven claims of predatory pricing in detail, at the source.
Good clear writing from a lawyer.

And concludes:



Go ahead.
Listen to James Patterson:
http://the-digital-reader.com/2014/1...oycott-amazon/

Let's see how far that gets him.

Ok, how about dominant market position if he finds the word monopoly offensive? Legally it amounts to the same thing and is a pretty good description of Amazon's ebook position over the past several years (ranging from 60% to 90% of the market).

Of course, the idea that it can't be a monopoly if a company is selling something that is supplied by someone else is rather odd. Some of the most famous monopolies have been trading companies that sold something supplied by someone else (starting with Tea and going through the meat packing and slaughter house cases).

[jgaiser]

Never Mind... Wrong post

[cromag]

Hey! I worked for the Bell System!

[Fbone]

The information from the court case is over 2 years old now. The ebook world is in a totally different place now.

No objector to the proposed Final Judgment has supplied evidence that, in the dynamic and evolving e-book industry, Amazon threatens to drive out competition and obtain the monopoly pricing power which is the ultimate concern of predatory pricing law. The presence and continued investment by technology giants, multinational book publishers, and national retailers in e-books businesses renders such a prospect highly speculative.

A number of retailers have closed. Multinational book publishers merging. Investment in e-book business declining. Amazon's increase in market share.

This doesn't necessarily mean Amazon is a monopoly, monopsony or predator but, on the other hand, Amazon may want to avoid any new DOJ scrutiny.

[pwalker8]

On a simular note, there was a pretty interesting opinion piece in todays Wall Street Journal -
Three Cheers for ‘Creative Monopolies’ by Crovitz

http://online.wsj.com/articles/gordo...&mg=reno64-wsj

The crux of the article is discussion of Peter Thiel and his idea that innovators create a temporary monopoly by moving into a space where no one else is.

Here is an interesting quote -
"He warns against creating products that can be commoditized. “All happy companies are different: Each one earns a monopoly by solving a unique problem,” he writes. “All failed companies are the same: they failed to escape competition.” Example: Google , with its unique search advertising, is worth three times as much as all U.S. airlines combined."

He quotes a Scalia written majority opinion -
“The mere possession of monopoly power, and the concomitant charging of monopoly prices, is not only not unlawful, it is an important element of the free-market system. The opportunity to charge monopoly prices—at least for a short period—is what attracts ‘business acumen’ in the first place; it induces risk taking that produces innovation and economic growth.”

So, innovative companies, such as Amazon, Google, Paypal and Apple, are monopolies. However, this is neither illegal nor bad.

The article is based on Thiel's new book “Zero to One: Notes on Startups, or How to Build the Future”

Sounds interesting.

As a side note, I would point out that the US practice of granting a patent for just about anything and everything, tends to help innovative companies hold so call creative monopolies for longer than normal. When one can patent the idea of an online shopping cart, that tends to cut back on competition. I suspect that patents are the biggest barrier to entry in many tech markets.

[SteveEisenberg]

Originally Posted by fjtorres

Amazon's US market share, in eBooks, is roughly the same as that of Standard Oil, in refined oil, when it was broken up for being an illegal monopoly.

Sources:

http://en.wikipedia.org/wiki/Standard_Oil

http://www.forbes.com/sites/jeffberc...y-the-numbers/

I'm not saying Amazon should be broken up. I am saying that 2/3 market share is enough for the word monopoly to be commonly applied.

Thinking that I now I should read Ida Tarbell's History of Standard Oil (1904) to see if there are other similarities, I just checked Amazon.com and found they wanted $5.99 to Whispernet this public domain title to my Kindle. So I got it from Open Library:

https://openlibrary.org/books/OL7057...rd_Oil_Company

I wonder if Standard Oil ever had a Gazelle Project:

http://www.businessinsider.com/sadis...azelle-2013-10

[shalym]

Originally Posted by SteveEisenberg

Amazon's US market share in eBooks is roughly that same as that of Standard Oil when it broken up for being an illegal monopoly.

Sources:

http://en.wikipedia.org/wiki/Standard_Oil

http://www.forbes.com/sites/jeffberc...y-the-numbers/

I'm not saying Amazon should be broken up. I am saying that 2/3 market share is enough for the word monopoly to be commonly applied.

Thinking that I now I should read Ida Tarbell's History of Standard Oil (1904) to see if there are other similarities, I just checked Amazon.com and found they wanted $5.99 to Whispernet this public domain title to my Kindle. So I got it from Open Library:

https://openlibrary.org/books/OL7057...rd_Oil_Company

I wonder if Standard Oil ever had a Gazelle Project:

http://www.businessinsider.com/sadis...azelle-2013-10

For $0.99 you can get a much better version from Amazon...of course, if you are ok with reading a badly OCR'd copy to save less than a dollar, that's your choice. I'd rather pay for a copy that's easier to read...especially when it costs less than a bottle of water. http://smile.amazon.com/History-Stan...Oil+%281904%29

Shari

[patrickt]

The government is a monopoly and all other monopolies are approved by the accomplice in monopoly, the government.