June 18, 2012

Indie booksellers echo B&N’s charges against the DOJ and Amazon


ABA head Oren Teicher

Just days after Barnes & Noble voiced its opposition to the Department of Justice’s lawsuit against Apple, Macmillan and Penguin and the harsh terms of the settlement with Hachette, Simon & Schuster, and HarperCollins (see the earlier MobyLives report), the American Booksellers Association (ABA) chimed in late last week with its own letter to the DOJ making similar complaints, voicing support of agency pricing, and saying “we believe that Amazon is a much more dangerous industry participant than the publishers or any other retailers.”

According to a brief report from Publishers Weekly, the letter, written by ABA head Oren Teicher,

… stressed the importance of the agency model in protecting bricks-and-mortar bookstores from showrooming, or “free riding.” The consent decree, he also noted, is “improper and overly broad,” because it would void agency agreements, like that of ABA’s IndieCommerce with Google eBooks and publishers, that were negotiated after April 2010, which are not part of the DoJ complaint.

But as a more in-depth report by Laura Hazard Owen for paidContent notes, Teicher really spelled out the potential negative impact of the lawsuit, and lambastes Amazon while doing it.

As Owen nicely glosses the letter:

Elimination of the agency model would “significantly discourage new entry, and will lead to the departure from the market of a sizeable number of the independent bookstores that are currently selling e-books,” Teicher writes. He says indie bookstores were only able to start selling e-books because “the market was commercially viable as a consequence of adoption” of the agency model and that 380 indie bookstores are now selling e-books through ABA’s IndieCommerce platform …

Without presenting data, Teicher says agency “has clearly lowered retail prices to indie bookstore customers…indie bookstores report that average prices to booksellers dropped $2-$5 per unit or more after Agency was introduced, while sales of e-books have significantly increased.”

“As a power buyer and power seller that regularly sells its books and e-books below cost, we believe that Amazon is a much more dangerous industry participant than the publishers or any other retailers,” Teicher writes. He cites Amazon’s fight with distributor IPG and Amazon’s fights against state sales taxes as examples of its “mercurial attitude toward its business partners with devastating results for those partners given Amazon’s market share.”

Amazon is “a classic free-rider” that “can and does free ride off the sales and promotional efforts of bricks-and-mortar stores” and “does not collect sales taxes in many locales,” Teicher says. “Showrooming” — the practice of discovering books in a bricks-and-mortar store and then buying them online — has resulted in “lost revenue to indies of as much as $260 million,” he says, citing Verso Advertising research.

In short, Teicher says agency “corrects a distortion in the market fostered primarily by Amazon.com.”

Which was the idea, of course. And now most major players in the industry have chimed in in agreement — indie and chain retailers, the Authors Guild, the Association of Authors Representatives, and of course other publishers. It is perhaps the most unified the American publishing industry has ever been on any issue.

So why am I still nervous about this? Because they’re fighting an opponent who is clearly crazy. There’s no other explanation for the DOJ’s case. And as my grandfather used to say, never get in a fight with a crazy person, because they won’t know or care when you’ve hurt them.


Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.