Tuesday, February 19, 2013

Just Call It The Bureau of Anti-Competition

The U.S. Department of Justice has just approved the merger of Penguin and Random House. The Canadian Competition Bureau will probably follow suit this spring. How can this be possible--unless they rename themselves the Bureaus of Anti-Competition? By even conservative accounts this will mean that the Random Penguin or Penguin House will control about 40% of the market. 

This American decision is the latest in their vendetta to actually crush competition in the guise of consumer protection. One of their latest decisions has been to charge five of the major publishers (Penguin is one of them) and Apple with ebook price fixing...or colluding to control the market. Some of the CEOs of these companies decided what their ebook price to Amazon would be over lunch. They needed to have a certain price to make their publishing programs sustainable. Amazon is the gorilla in the room. They pound their chests and demand higher discounts and more, more, more. They want to have the lowest ebook price in the world. The Department of Justice's decision virtually allows Amazon to sell ebooks at below cost. They don't even care if they make money in the bookselling part of their business because they sell tractors, washing machines, and beauty products too. 

And what will the ramifications of these decisions be? Amazon has been enabled to control the retail book business, and it is on their agenda to become a major publisher as well. Random Penguin will become an even bigger account for all dwindling booksellers. If Random Penguin changes their payment terms, booksellers will have no choice but to pay them earlier. Smaller publishers will be behind them in payment. C'est la vie I guess in today's careening monopolistic book world.

- Barb

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