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Arguing that Amazon’s Behavior Justifies Agency Model Price Fixing is Idiotic

Since the rise of the Agency Model that Apple made possible for publishers in a partnership surrounding the release of the iBooks application and store for the original iPad (a partnership now awaiting trial in an anti-trust case), there has been serious talk about how Amazon has set out on a crusade to utterly destroy traditional publishing with the Kindle.  This isn’t news, exactly, but it has become an important and popular topic after the recent contract dispute that the company had with the Independent Publishers Group that has resulted in the ongoing absence of IPG titles from the Kindle Store.

There can be no question that Amazon is acting like a bully in this dispute.  They want a lot and are in a position to demand rather than ask or negotiate.  What has risen up in response to this anti-Amazon sentiment has been shocking to say the least, however.  Scattered around popular blogs, we can now see any number of authors and publishers coming out against Amazon and claiming that publishers were somehow right to have engaged in price fixing and that even if it was technically illegal they should be allowed a pass because otherwise Amazon will win.

On the one hand, it is understandable sentiment.  Thanks to the Kindle, Amazon controls around 75% of the eBook market already.  Without their platform, the rise of eReading as we now know it would slow to a crawl.  Nobody else has the resources, or seemingly the interest in customer satisfaction, that Amazon is willing to put into keeping such a platform going.

On the other hand, this is insane.  Publishers were unhappy with how poorly the old business model applies to new media and so their potentially illegal activities should be excused.  It makes no sense to me, somehow.

This is made to seem like it is a one-sided arrangement.  I believe that to be a mischaracterization.  If publishers lacked power, they could not have compelled the adoption of the Agency Model in the first place.  They were just too concerned at the time with short term profits to be willing to take a stand and risk losing Amazon as a storefront.  It was a move that only made sense for every individual company if they knew that none of the competition would be capitalizing on their threatened withdrawal.

Amazon’s acting like a bully aside (because in the matter of the Agency Model and its potential legal implications that that does not apply) they have built the simplest and most usable way for readers everywhere to access eBooks.  Nobody else has come close, despite competing efforts from Barnes & Noble’s Nook line, the Kobo, and more.  This does not mean that anybody has been compelled to use it.

There would be no case against them if the Big 6 Publishers had come out with their own Kindle competitor and started offering all of their titles through it.  The Kindle would still be there attracting self publishers and generally making itself useful in various ways, but it wouldn’t have the content to be so important.

These publishers don’t want to have to deal with building new distribution channels, though.  They also don’t want to have to adapt when other people build them.  The fact that there is a power disparity is undeniable, but that doesn’t mean that these publishers were ever powerless.  Nobody compels them to use the Kindle platform.  To say that they should be able to get away with their own anti-competitive and manipulative actions because otherwise the Kindle line will make people start seeing books as more affordable and ruin their profits is just ridiculous.

1 comment to Arguing that Amazon’s Behavior Justifies Agency Model Price Fixing is Idiotic

  • Mike

    Couldn’t agree more. I have so little sympathy for the approach the book publishers have taken. My reading has nearly tripled since picking up a Kindle, in books and enjoyment. If Amazon is going to be a bully at least they’re a bully on my side, afaic. I really hope that other companies can continue to provide competition to Amazon to keep the innovation and improved experience coming, but the price fixing (and horrid e-book editing from the publishers) has been a particular irritation.

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