The American Booksellers Association (ABA) today released a white paper detailing the scale and scope of Amazon’s anti-competitive behavior: American Monopoly: Amazon’s Anti-Competitive Behavior Is in Violation of Antitrust Laws. The white paper was sent to the attorneys general in all 50 states and D.C., as well as the National Association of Attorneys General.
The release of the white paper follows the congressional report on Big Tech and monopolization released by the U.S. House Antitrust Subcommittee, chaired by Rep. David Cicilline of Rhode Island, and the introduction last week of legislation by U.S. Senator Amy Klobuchar of Minnesota to reinvigorate America’s antitrust laws and restore competition to American markets.
“Piles of Amazon boxes sitting on porches and in lobbies is becoming the norm, but there are costs and consequences to our communities,” said Allison Hill, ABA CEO. “Amazon’s overreaching dominance over multiple markets has squelched competition and new businesses. If Amazon were broken up today, we firmly believe the many markets in which they dominate would quickly diversify and grow and our communities would be the beneficiaries.”
ABA’s white paper, written by ABA’s Advocacy team, provides a legally grounded argument as to why Amazon is a monopoly. Examining Amazon’s online retail store, Amazon Web Services (AWS), and its third-party marketplace, among other company operations, the white paper outlines how Amazon is unlawfully restraining trade, engaging in exclusionary, anti-competitive pricing schemes, and is using both its horizontal and vertical integration to create barriers to entry, increase Amazon’s market power, and unfairly manipulate marketplaces.
ABA’s announcement of the white paper comes just months after its #BoxedOut campaign drew national attention to the high stakes indie bookstores face in the age of the pandemic and the cost and consequences of consumer choices. The campaign, designed by DCX Growth Accelerator, featured brown box installations at bookstores in New York City, Los Angeles, and Washington, D.C., as well as a social media campaign. The installations’ cardboard coverings were adorned with sayings like “Books curated by real people not a creepy algorithm” and “If you want Amazon to be the world’s only retailer, keep shopping there.”
In the 21-page white paper, the authors note: “Amazon has used exclusionary, anti-competitive pricing schemes to gain market power and illegally monopolize the e-commerce retail market, specifically, the first-party online retail market, the third-party e-commerce marketplace market, the web services market, and the third-party logistics services market.”
Nowhere is Amazon’s conduct more of a threat to the competitive process than in the online bookselling market. “Amazon has engaged exclusionary tactics, including predatory pricing, to gain market power and has leveraged its substantial market power against publishers unfairly,” the authors point out. They continue: “Amazon’s anti-competitive conduct extends to the pricing of its proprietary e-book reader and tablet, the Kindle and Fire, which are ‘loss leaders,’ meaning products priced at or below cost to stimulate the sale of more profitable goods or services. Amazon’s intent is to leave consumers with no alternative but to purchase e-books and other products from Amazon, rather than its competitors, regardless of price.”
ABA makes the case for investigating Amazon for antitrust violations, concluding that it is best for the country’s economy and its consumers that Amazon be broken up into at least four autonomous companies: retail, e-commerce marketplace platform, web services, and logistics.