PUBLISHED NOVEMBER/DECEMBER 2021
by Dr. Kurt Brackob, Editorial Director, Histria Books —
Dr. Kurt Brackob
These bills are of special importance to independent publishers and booksellers, who should contact their congresspersons and senators in support of each.
For more than two decades, independent publishers and booksellers have been under attack as a result of consolidation in the publishing industry and retail sectors.
While new technologies, like print-on-demand, have greatly expanded the reach of small businesses, these technological advances are a double-edged sword. They have also led to consolidation both in the world of publishing and bookselling. The availability of fewer and fewer outlets to publish and sell books negatively impacts innovation and creativity. Apart from that, a small number of digital platforms now act as gatekeepers for a large part of the online marketplace. Businesses and consumers no longer have meaningful alternatives online.
To address this situation, the US House Judiciary Committee gave preliminary approval this summer to two important pieces of legislation that have a direct impact on small businesses. These bills are of special importance to independent publishers and booksellers, who should contact their congresspersons and senators in support of each.
American Choice and Innovation Online Act
The first is HR 3816, called the American Choice and Innovation Online Act. The purpose of this legislation is to make it unlawful for online platforms, such as Amazon—which currently accounts for nearly half of book sales in the United States and is projected by 2025 to control 80% of the book market—to engage in discriminatory practices that hurt other businesses.
On June 24, 2021, HR 3816 received preliminary approval in committee with bipartisan support. According to Judiciary Committee Chairman Jerrold Nadler, the bill “restores competition online and ensures that digital markets are fair and open. It does so by preventing dominant online platforms from using their market power to pick winners and losers, favor their own products, or otherwise distort the marketplace through abusive conduct online ….”
The motive for this legislation is that the dominant platforms are able to use their power to pick winners and losers among those using their platforms to reach consumers. In addition, they often compete directly with the same businesses that rely on their platforms. This leads to manipulative practices to favor their own products and to otherwise disadvantage rivals. This undermines competition, stifles innovation, and deprives consumers of meaningful choice. Among the things that HR 3816 addresses:
“It shall be unlawful for a person operating a covered platform, in or affecting commerce, to engage in any conduct in connection with the operation of the covered platform that — (1) advantages the covered platform operator’s own products, services, or lines of business over those of another business user; (2) excludes or disadvantages the products, services, or lines of business of another business user relative to the covered platform operator’s own products, services, or lines of business ….” It also prevents online platforms from interfering with or restricting a business user’s ability to price its own goods or services.
Ending Platform Monopolies Act
To supplement the intentions expressed in HR 3816, on June 24, 2021, the House Judiciary Committee also gave preliminary approval along bipartisan lines to HR 3825, known as the Ending Platform Monopolies Act. Its purpose is to prevent dominant online platforms from leveraging their monopoly power to distort or destroy competition in markets that rely on that platform.
Committee Chairman Nadler stated that, “By operating as both the platform and as a competitor on the platform, these firms often possess an irreconcilable conflict of interest, enabling them to harm competition by preferencing their own products and harming rivals. Inevitably, these conflicts of interest, and the anticompetitive conduct they incentivize and enable, distort and destroy competition. They reduce incentives for small businesses and entrepreneurs to take risks and they rob consumers of choices.”
This legislation would make it unlawful for a dominant online platform—such as Google, Apple, Amazon, and Facebook—to simultaneously own another line of business when that dual ownership creates a conflict of interest. Companies in violation of the law would have to divest lines of business where their gatekeeper power permits them to favor their own services or disadvantage rivals. Amazon, for example, has been using data from its own independent sellers—small businesses across America—to launch competing products.
The legislation states that its purpose is “To promote competition and economic opportunity in digital markets by eliminating the conflicts of interest that arise from dominant online platforms’ concurrent ownership or control of an online platform and certain other businesses.”
These two pieces of legislation should be of great interest to independent publishers and booksellers. Books are an essential social good. As Andy Hunter of Bookshop.org points out, “What they give us is too precious to trust to a single entity for whom they are ultimately just a product, and whose algorithms value them only by the revenue and customers they bring in…. Amazon is algorithm driven; the books promoted by Amazon are the ones that are already selling well. That makes it very difficult for new authors to build audiences. It keeps lesser known, unconventional books from reaching the readers who would appreciate them. It narrows our national conversation down to a very fine point, and sands the edges off of human ideas and creativity. It excludes marginalized voices.”
A competitive book industry is essential to preserving both intellectual life and democracy. These bills are both important steps to restore a healthy, competitive environment necessary for independent publishers and booksellers to thrive.
Another area of concern to independent publishing should be the proposed merger of Penguin Random House and Simon & Schuster. Consolidation within the publishing industry has gone on for decades and has reached alarming proportions that threaten the survival of independent publishing. The merger of the two publishing giants will create a mega-publisher that controls nearly a third of the market. It would leave the Big Five, which would become the Big Four if the merger is approved, with an 80% market share. Despite assurances from Penguin Random House CEO Markus Dohle that PRH and Simon & Schuster can continue to bid competitively for books after the merger, such claims cannot be taken seriously. While it may be good PR for Dohle to make such promises, history has proven time and again that monopolies cannot be trusted to police themselves against anti-competitive practices.
In his article in The New Republic, “Pretty Soon There’ll Just Be One Big Publisher Left,” Alex Shephard writes that if the PRH-Simon & Schuster “deal does go through, which seems likely, it could very well be a disaster. The publishing industry’s emphasis on blockbusters will only grow. The number of publishing jobs, already scant, will shrink. The decline of publishing’s middle class will continue. Amazon’s hold on the industry will remain and, more likely than not, grow. And industry-wide concentration will continue to balloon, exacerbating every negative trend we’ve seen over the last few years.”
What Can Be Done?
Independent publishers and bookstore owners should reach out to their congresspersons and senators to tell them to support HR 3816 and HR 3825. They should also encourage them to lobby the Justice Department to block the merger of PRH and Simon & Schuster on antitrust grounds. The Independent Book Publishers Association, through its Advocacy Committee and its Board of Director, expresses its support of this or other similar legislation and also calls on the Justice Department to take a stand against the anti-competitive merger of PRH and Simon & Schuster. As Benjamin Franklin once said, “Whoever would overthrow the liberty of a nation must begin by subduing the freeness of speech.” If these trends continue and people do not take a stance against monopolistic practices, both in book distribution and in book publishing, that freedom will be lost, and the damage to our culture will become irreparable.
As consolidation in the industry continues, it is useful to remind publishers of the need to diversify their online sales channels to protect their businesses from possible disruptions. This recent article from the IBPA Advocacy Committee is a great resource.
About the IBPA Advocacy Committee
The IBPA Advocacy Committee is a standing committee of the Independent Book Publishers Association (IBPA) tasked with identifying, prioritizing, and developing strategies to address issues of concern to independent publishers. The committee’s objectives are to 1) identify and prioritize issues of concern to independent publishers, 2) establish campaigns and take actions to address these concerns, and 3) ensure that IBPA members are informed of these concerns, and the steps taken to address them. For more information, visit ibpa-online.org/advocacycommittee.
Kurt Brackob is editorial director for Histria Books, based in Las Vegas, Nevada. Brackob has worked for over 20 years in the publishing industry. He is a historian and author of several books.