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In a 12-page filing with the Federal Trade Commission in connection with the Commission's hearings on "Competition and Consumer Protection in the 21st Century," the Association of American Publishers urged the Commission to "more closely scrutinize the behavior of dominant online platforms that pervade every aspect of the economy."
The AAP emphasized that dominant technology platforms "exercise extraordinary market power in the markets for book distribution and Internet search," and singled out Amazon. It said, "No publisher can avoid distributing through Amazon and, for all intents and purposes, Amazon dictates the economic terms, with publishers paying more for Amazon's services each year and receiving less in return."
AAP also highlighted that Amazon and other platforms facilitate transactions for "unauthorized books." It wrote that Amazon enables "widespread counterfeiting, defective products, and fake reviews that both degrade the consumer experience and diminish the incentives of authors and publishers to create new works and bring them to the marketplace."
As for book searches, the AAP called Google's "complete and untouchable dominance... highly problematic because its business model is largely indifferent to whether consumers arrive at legitimate or pirated goods."
In general, the AAP said it had five "primary areas of concern," many or all of which apply to Amazon and, to a lesser extent, Google. Those concerns are: "(i) platforms exercising extraordinary market power in the markets for book distribution and Internet search; (ii) the threat to competition when platforms act as both producers and suppliers to the marketplaces they operate; (iii) platforms' imposition of most-favored nation clauses and other parity provisions that stifle competition, market entry, and innovation; (iv) platforms' use of non-transparent search algorithms and manipulated discovery tools that facilitate infringement and deceive consumers; and (v) platforms' tying of distribution services to the purchase of advertising services."
Maria A. Pallante, president and CEO of the AAP, commented: "Unfortunately, the marketplace of ideas is now at risk for serious if not irreparable damage because of the unprecedented dominance of a very small number of technology platforms. In order to mitigate this crisis and protect the public interest, AAP urges the FTC to exercise much-needed oversight and regulation, particularly as to circumstances where technology platforms stifle competition and manipulate consumer outcomes."