Time for Washington to investigate the e-book business. No question mark. Scrutinize! Especially Amazon!

image I’ve got nothing against Amazon prospering—in fact, I want it to thrive since my publisher is selling my novel there.

Just the same, in the wake of Amazon’s acquisition of Stanza, a leading e-reader for the iPhone, do we really want this one company to dominate so much of the book business? I’ve already documented how difficult Amazon is making it to find the nonKindle version of my book via the company’s search engine if you omit the “the” in the title. And speaking of baffling search results, how about my frequent problems using my iTouch’s Safari browser and Amazon’s search engine to find The Solomon Scandals and other books in the format for the Kindle, an Apple competitor? Notice the “currently unavailable” for the Kindle version, in the Safari-related screen shot to the left, below? Yet, as shown by the right screenshot from my desktop machine, the novel is for sale for the Kindle. Is the Safari hassle just an accident rather than sleazy Kindle-hardware favoritism? Who knows? But as with Google, this is a great example of the dangers of entrusting so much of our online lives and our commercial dealings to just one company in a specific area—because of the size and obstinacy of the corpocracy, if nothing else. Damn it, Jeff, you are costing me sales to people using Safari to shop for my book’s Kindle version. At a more cosmic level, questions abound about Amazon’s treatment of writers and publishers. Amazon can especially be hell for nonconglomerates to deal with; try arranging for the Amazon-owned Mobipocket store not to contaminate your books with Amazon’s DRM. So often, however, small publishers are the innovators. In the end this is a content issue, not just a technological one.

Message to the feds: Investigate, please!

image imageThe Amazon-Lexcycle deal thus should send a big signal to relevant congressional committees, the FTC and, if the facts justify it, maybe even the U.S. Justice Department. And perhaps the Association of American Publishers, if it isn’t snoozing and truly cares. One S&S executive has told AP that she’s all in favor of diversity in e-book platforms. Of course. But with common standards for these platforms—ePub, in this case—the consumer will have more choice. ePub is how Stanza grew. Now we run the risk of Amazon using its acquisition to choke off ePub’s growth or at least slow down Lexcycle/Stanza’s ePub-related efforts at some point. Yes, I think it is time for someone in Washington to care. Investigations, please! Washington often bungles things, but at least we can vote the bastards out of office. No one elected Jeff Bezos to boss the book business. Significantly, Stanza includes not just e-book-reading capabilities, but also online cataloging ones, which could well be weakened eventually to thwart Jeff’s competition, regardless of any promises to the contrary that Amazon may have made to Lexcycle, Stanza’s developers. Amazon is trying to become the Comcast of the e-book business, the gateway to most everything, and books could become more TVish as a result if, wittingly or not, the company doesn’t give a fair shake to the more adventurous smallfry.

The good news is that maybe someone else besides Stanza and Adobe, etc., can leverage the ePub standard to create more competition within the standard. Perhaps in the iPhone area, BookShelf will draw more interest as an ePub platform for small commercial publishers, Feedbooks, Gutenberg and the like. But considering the fondness of many publishers  for dealing with large companies, it will be more difficult than in the past—hence, the need for federal scrutiny of the e-book industry to see how competitive it remains, given Amazon’s penchant for herding people into its formats. Remember the job it did on Adobe and Microsoft Reader—once staples within the Amazon store?

One positive: A member of the Reading 2.0 list notes that Lexycle will continue development for Google’s Android platform. Let’s see. Maybe good things will happen in the short term—I haven’t any doubt of the Lexcycle team’s sincerity in believing this; it’s the long term I worry about. We know what happened shortly after Amazon bought Mobipocket. Not much. But now? So far, Amazon refuses to do a Mobi app for the iPhone platform. It’ll be interesting to see if Amazon will let Stanza/Lexcycle read DRMed Mobi, an issue that Chris Meadows has just raised in our comments area.

8 Comments on Time for Washington to investigate the e-book business. No question mark. Scrutinize! Especially Amazon!

  1. Let’s not forget what happened to POD titles w/regard to Amazon. Either they had to go through Booksurge, or they had to supply titles to the warehouse – thus obviating the entire principle behind POD. I think you’re right – for the short term, no big deal. For the long term…? World domination.

  2. Amen, Laura. Jeff Bezos has a long-term Warren Buffett mindset, except that his focus is as much on shafting the competition as on growing his fortune. Meanwhile as a whiz in book listings, metadata, etc., what do you think of my weird experiences with Amazon’s search engine (both with the slighted paperback edition of The Solomon Scandals and with the treatment of the Safari brower on the iTouch, a Kindle competitor)? Care to retrace my steps? Amazon’s bizarre search engine isn’t an abstract issue. It’s costing me sales, and I don’t even know what might be happening under the hood, unknown to me. Maybe Amazon isn’t doing anything intentional—I can’t say. But if nothing else, this is worth looking into, just like Amazon’s treatment of gay-related books.

    Thanks,
    David

  3. David, I happen to agree that Amazon should be the subject of a an FTC investigation for uncompetitive, monopolistic practices, and I have so suggested. I suggest that you write your complaint not here but to the FTC on its complaint form, which is available at https://www.ftccomplaintassistant.gov/.

  4. The FTC won’t bother with an investigation, and that is the correct decision. Any review of whether an acquisition is anticompetitve includes an analysis of prospects for entry by new competitors. This is a young, dynamic market, and other software developers are fully capable of designing the next Stanza even if Lexcycle is owned by Amazon. Moreover, the market power that Amazon has today has been lawfully obtained. Building the best mousetrap (which the Kindle/Amazon store has been so far) is not illegal, and the purchase of Lexcycle is not unlawful leveraging of that success.

    There is no antitrust violation here. If the FTC or DOJ took a case against Amazon to court, it would lose.

  5. ving: as a legal matter I agree with you completely. There are no legal grounds for an investigation or a lawsuit at the current state of the market. As a matter of fact, this whole area is so new that I’m not even sure that you can define just what the market is yet.

  6. Ving and Paul: Thanks very much for your views, but keep in mind I’m not calling for anti-trust charges unless they’re justified—simply for careful looks at Amazon’s current practices. This could actually be to Amazon’s advantage, in knowing just how far it can go. Again, the idea isn’t to hurt Amazon but rather to keep things competitive. It just could be that things are farther along, in terms of tech lockups, than we think. Hard to say. I’d rather not see the book industry gamble. Thanks. David

  7. Best to get the facts straight. Mobipocket always required a minimum level-four encryption on submitted files; don’t blame Amazon for it.

    Nobody forced Lexcycle to sell to Amazon. According to all the reports they were doing just fine on their own. Or are you suggesting hitmen were dispatched to take their families hostage till they surrendered to the evil empire?

    How come nobody expressed more than mild concern when Barnes & Noble bought Fictionwise, which has a far larger chunk of ebook content at the moment than Kindle or Mobipocket?

    Large corporations, conspiracy theories notwithstanding, don’t always buy competitors for the purpose of burying them. Sometimes they do so because the competitor has patents and/or technology they believe will improve their own service deliver. Or because the competitor has already established a market so acquiring them saves time, effort and money.

    I don’t have an iPhone or iTouch, so only those who do can consider if the Stanza search engine works better than the Kindle one. If it does, consider that said search engine might be what Amazon was interested in, not cornering the ebook market.

    To address one of the comments, when Ingram closed their doors to wholesaling any POD not printed by their own Lightning Source, nobody said boo, even though Ingram is unquestionably the major book wholesaler in the country, if not the world. When Amazon did essentially the same thing, mainly so they could print the books in the warehouse instead of having to stock them, suddenly they were swallowing up the industry.

    Success breeds envy, and Amazon is nothing if not successful. That’s because they’re smart enough to know when it’s cheaper to pay someone else for something than it is to make it from scratch. Yes, they could pay royalties for the right to use the patent, but if you have the money to buy it outright, why would you? It’s like the real estate ads: “Why pay rent when you can own?”

  8. “I don’t have an iPhone or iTouch, so only those who do can consider if the Stanza search engine works better than the Kindle one. If it does, consider that said search engine might be what Amazon was interested in, not cornering the ebook market.”

    Hey, Elizabeth, it would be great if you used an iPhone or Touch and experienced the false “Unavailables” for yourself. They have nothing or at least very little to do directly with the specific reasons for Amazon’s Stanza purchase. Whether for innocent reasons or because Amazon wanted this, the search engine on Amazon’s server won’t show Kindle books as available to Safari users. Bizarre.

    I’d further point out that there are zillions of iPhones and Touches out there, so we’re potentially talking about a number of affected people.

    > “Large corporations, conspiracy theories notwithstanding, don’t always buy competitors for the purpose of burying them.”

    And yet Amazon has never come out with Mobi for the iPhone, and there’s even a report that Amazon stopped Mobi from deploying the app. This is why we need a Justice Department or FTC investigation, so the feds at least can go beyond the rumors and see what really happened.

    Regarding B&N’s buy of Fictionwise, Amazon left the other company with no choice but to make acquisitions like this. Like any other large company, B&N is hardly 100 percent pure. But so far, as a consumer, I seem to run into fewer gotchas than with Amazon.

    > Nobody forced Lexcycle to sell to Amazon. According to all the reports they were doing just fine on their own. Or are you suggesting hitmen were dispatched to take their families hostage till they surrendered to the evil empire?

    Um, I think that $10 or $15 million or whatever overcame the the previous concerns of people who earlier were espousing openness. I suspect that the money helped them persuade themselves that this would continue under Amazon.

    Thanks for your comments, Elizabeth, even if we disagree here.

    David

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