Welcome to The Corner. In this issue, we discuss how Amazon is attempting to replace public libraries by refusing to sell them its eBooks and the nomination of Lina Khan to the Federal Trade Commission.

To read previous editions of The Corner, click here.

Amazon withholds its eBooks to undermine libraries. Librarians, advocacy groups and states won’t let it.

In 2018, Forbes contributor Panos Mourdoukoutas, chair of the economics department at LIU Post, penned an op-ed advocating for Amazon to replace local libraries in order to save taxpayers’ money while “[providing] something better than a local library.” Mourdoukoutas’ proposal received such immediate backlash from library workers and supporters that Forbes took the story down an hour after it was published.

Three years later, Amazon appears to be doing just what Mourdoukoutas proposed.

As reported by The Washington Post on March 10, Amazon Publishing won’t sell its eBooks to public libraries. When a library patron visits their Libby app by OverDrive, a distributor of digital content from local libraries, they won’t see any digital content published by Amazon.

This is the corporation’s latest tactic in Amazon’s overarching plan to undermine public libraries and to turn library users into paying customers, library supporters say. Amazon already gathers a great variety of data on most of the people who borrow e-books at public libraries — either through its Kindle readers or through the Kindle apps loaded on Apple and Android devices. And the corporation is largely free to use this information both to lure these readers into buying more books and other products from Amazon, and to decide what e-book authors to publish directly.

Amazon’s move comes at a time when e-book borrowing from libraries is rising fast. According to data from OverDrive, e-book borrowing increased by more than 40 percent in 2020 as library patrons relied more on digital collections during the pandemic. Experts estimate that Amazon Publishing touts more than 6 million eBooks, including titles that are self-published on the platform, while the tech titan’s share of the U.S. e-book market sits at about 83 percent.

Librarians are voicing their disappointment, pointing out how Amazon’s restricted access to its collection of digital titles disrupts what libraries can provide to their communities. Library patrons aren’t only missing out on unique self-published titles from niche authors, but are also barred from more well-known books like Mindy Kaling’s “Nothing Like I Imagined” and Trevor Noah’s “Born a Crime.”

Kathy Lo, a librarian in Southern California, told Open Markets, “The reality is all public libraries would love to get as many titles as possible available on their e-media platforms… The fact that Amazon does not generally sell their [digital]products to public libraries is not something we want to see.”

Without access to such digital content, Amazon shepherds library users to rent or buy the eBooks instead. In 2018, nearly 90 percent of eBooks were sold through the platform.

While steering customers away from free libraries, Amazon also appears to be increasing the prices it charges for its eBooks. On Jan. 14, the law firm Hagens Berman filed a class-action lawsuit in a New York federal district court against Amazon. The suit accuses the tech company of eBook price fixing through its dealings with the Big Five — Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster — which the plaintiffs say increased the retail prices of eBooks on Amazon.

The lawsuit resembles a 2012 case in which the Department of Justice filed an antitrust complaint against Apple and a number of publishers, including HarperCollins and Simon & Schuster. The complaint alleged that Apple and the publishers colluded to raise the prices of digital books and undermine Amazon’s dominance.

There is a growing effort to protect public libraries — and readers — from Amazon’s power. States including New York, Maryland and Rhode Island have introduced bills requiring publishers to offer libraries licenses for digital titles under“reasonable terms.”

Advocacy groups, such as Fight for the Future, also are condemning the company’s eBook business tactics, calling them violations of antitrust law.

In a statement to Open Markets, FFF’s campaigns and communications director Lia Holland said, “By creating exclusive silos like Audible and Kindle to direct readers into digital ecosystems, [Amazon] is gaining valuable and exclusive insight into the publishing industry that it can use to further cement its monopoly.” 

Open Markets Applauds President Biden’s Choice to Nominate Lina Khan for Commissioner of the Federal Trade Commission​

This week President Joe Biden nominated our former colleague, a close ally, and dear friend Lina Khan to a seat on the Federal Trade Commission (FTC). The move was widely read as signaling a tougher stand by the Biden administration on antitrust enforcement against Big Tech. Khan first joined Open Markets in the summer of 2011 and worked with us as a reporter and researcher for three years. Khan then spent three years as a senior fellow with Open Markets, before returning as our first legal director from 2017 to 2018. Khan has also worked as the counsel on the House antitrust subcommittee, where she led the investigation of competition in digital markets and played a key role in the report filed in October of last year. Khan has also served as a legal advisor to former FTC commissioner Rohit Chopra. (NPR)

In a statement about Khan’s nomination, Open Markets Executive Director Barry Lynn said: “All of us at Open Markets are extremely proud of Lina’s work and her dedication to the well-being of all the American people. President Biden has made many excellent decisions in staffing his new administration. His choice of Lina Khan to serve on the FTC is one of his very best.”

🔊 ANTI-MONOPOLY RISING:

• This week India’s antitrust watchdog, Competition Commission of India, announced an investigation into WhatsApp’s privacy practices. The CCI is investigating WhatsApp’s “take-it-or-leave-it” stance, which would ban users from being able to receive or send messages on the app if they don’t comply with its terms of service and privacy policy. The CCI notes WhatsApp has a dominant market position in India, which makes its use of the policy even more powerful. India’s director general is also investigating its updated 2021 privacy policy that gives third parties, like Facebook, access to user data. (Yahoo Finance)
  

• The U.S. Supreme Court this week turned down an appeal by Facebook over a $15 billion lawsuit filed by four individuals accusing the company of nonconsensual tracking between April 2010 and September 2011, violating the Wiretap Act. Facebook during that period tracked the visits of users to websites integrated with Facebook features. The case was dismissed in 2017 but revived by the 9th U.S. Circuit Court of Appeals in San Francisco. (NBC News)
   

• FTC Acting Chairwoman Rebecca Kelly Slaughter, in her testimony before the House antitrust subcommittee last week, signaled a tougher approach to anticompetitive actions by calling for clear bright-line rules in antitrust enforcement. Slaughter also argued for the need to shift the burden of proof to merging companies and right-sizing the standard of proof, which would clarify what the competition agencies need to show to prove mergers are unlawful and protect markets. (FTC)

• The Department of Justice (DOJ) is investigating Google’s upcoming plan to block cookies on its chrome web browser for privacy protection purposes. The DOJ is concerned that Google’s plan to block the web tracking tool would allow it to further cement its dominance over ad rivals while also allowing it to utilize cookies through loopholes for its own purposes. (Reuters)

📝 WHAT WE'VE BEEN UP TO:

• Lina Khan, former Open Markets legal director and employee of seven years, was nominated by President Biden to be a commissioner at the FTC. Open Markets was mentioned in NPR, Politico, Bloomberg, Wired, Barron’s, CNET, MSN, MediaPost, Yahoo! Finance, Vice, Law360, Broadband Breakfast, Protocol, Deadline, Apple Insider, Competition Policy International, PYMNTS.com, and Hindustan Times in stories about the announcement about Khan. “She has previously worked as an aide to FTC Commissioner Rohit Chopra and at the left-leaning New America Foundation and its anti-monopoly spinoff, the Open Markets Institute.”
  

• Open Markets was mentioned in The Guardian for the letter we sent along with Authors Guild, the National Writers Union and other writers’ groups urging the Justice Department to block Bertelsmann’s takeover of Simon & Schuster. “Bertelsmann’s plan to take control of Simon & Schuster poses multiple dangers to American democracy and to the interests of America’s authors and readers. By bringing three of the big six publishers under one roof, the deal will concentrate vastly too much power over the U.S. book market in the hands of a single, foreign-owned corporation.” Eminetra, News Chant mentioned Open Markets’ as well.
  

• Barry Lynn was mentioned in an announcement from The Tax Justice Network about a new newsletter, The Counterbalance. “We first came together in late 2020 when Barry Lynn [a leading light of the new US antitrust movement] sent Michelle [Meagher, a competition lawyer} an article by Nick [Shaxson of TJN,] entitled “If tax havens scare you, monopolies should too. And vice versa,” calling for a new antimonopoly movement outside the United States. We recognised our shared interests, and began working together almost immediately.”
  

• Claire Kelloway was mentioned in The American Conservative for her reporting on monopoly prices for fertilizers and pesticides. “But this lack of agribusiness diversity also hurts farmers: as Kelloway and others at the Open Markets Institute have demonstrated, consolidation of agribusiness often hampers the ability of farmers to make a fair profit.”
  

• Open Markets’ report on Addressing Monopolization in America’s Food System, was cited in an op-ed written by Gracy Olmstead in The New York Times about how to fix our food systems. “We must challenge agribusiness monopolies and acknowledge the harm unchecked consolidation has had on our food system. We should aspire, when and where we can, to restore the sort of healthy local food sources and interconnectedness that my Grandpa Dad knew and that once undergirded rural communities.”
  

• Barry Lynn was mentioned in The Washington Monthly in a piece about what Biden can do to stop monopolies. “At the top of the list, Barry Lynn argues, are a suite of anti-monopoly statutes already on the books that Biden can deploy to reshape the American economy. These laws have gone largely unused by every president since Ronald Reagan, with disastrous results.”
  

• Sandeep Vaheesan gave a presentation at the LPE Project conference on Moral Economy After Consumer Sovereignty. “Congress should pursue a comprehensive legislative solution to contracts of dispossession. First, it should enact a comprehensive law banning these contracts of dispossession.” He also presented at a Stanford Cyber Policy Centerevent on Antitrust and Tech Platforms.
  

• Open Markets joined a coalition of more than three dozen national and international nonprofit organizations to launch a campaign to ban surveillance advertising. “There is no silver bullet to remedy this crisis—and the members of this coalition will continue to pursue a range of different policy approaches, from comprehensive privacy legislation to reforming our antitrust laws and liability standards. But here’s one thing we all agree on: It’s time to ban surveillance advertising.”
  

• Sally Hubbard was interviewed by #TechReg on what antitrust is and why it matters. “Tech platforms are finally being held accountable for illegal practices they’ve been engaging in for years that violate antitrust laws meant to protect open and competitive markets.”DONATE

📈 VITAL STAT: 15%

The commission Amazon imposes on third-party sellers. 

📚 WHAT WE'RE READING:

• “Puppet Entrepreneurship: Technology and Control in Franchised Industries”(Data & Society, Brian Callaci): Callaci explains the corporate construction of franchises and how they allow the franchisor to exercise control over franchisees and workers. The author examines various franchise agreements and details some of the digital surveillance tools franchisors use to rob franchisees of their ability to make independent decisions.

Barry Lynn’s New Book:

Liberty From All Masters

The New American Autocracy vs. The Will of the People

St. Martins Press will publish Open Markets Executive Director Barry Lynn’s new book, Liberty From All Masters, on September 29. The book is Barry’s first since Cornered, in 2010. In it, he details how Google, Amazon, and Facebook developed the ability to manipulate the flow of news, information, and business in America, and are transforming this power into autocratic systems of control. Barry then details how Americans over the course of two centuries built a “System of Liberty,” and shows how we Americans can put this system to work again today. Purchase your copy here. 

Open Markets Employment Opportunities

You can find the full job listings here. 

🔎 TIPS? COMMENTS? SUGGESTIONS?

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