The Atlantic Monthly allows contributing writer and small-time publishing exec Peter Osnos to post a piece of self-congratulatory fiction masquerading as business news:
[I’ll skip his first paragraph recapping the state of play in the DoJ lawsuit. It was the only non-fiction part of the piece. Also, I’ve highlighted a few key phrases]
Now, nine of the country’s leading independent publishers have taken a bold step, and deserve public recognition for their action. On June 25, they submitted a cogent, twenty-page comment to the court… At first glance, this may seem like a complex legal dispute far outside the general concerns of most bookbuyers. But stay with me and hopefully you will appreciate why the publishers deserve credit, and why this contentious issue matters to readers.
At the core of the case is the role of Amazon, which has dominated the e-book market since its release of the Kindle in 2007 set off the enormous surge in digital reading. … The dispute is essentially over how e-book prices should be determined: by the retailer under the longstanding practice known as “wholesale” pricing, or by the publisher in the “agency” model, in which the bookseller takes a commission on each sale. The Department of Justice contends that the publishers colluded to satisfy Apple’s preference for agency pricing when the iPad was unveiled in 2010. Unexpectedly, the agency concept came to be seen as a way to expand opportunities for bookselling and to limit Amazon’s ability to undercut the prices of its competitors.
In their comment, the independent publishers asserted that, “in aggregate, according to market data published by Nielsen BookScan the independents accounted for approximately 49 percent of total trade book sales nationwide in 2011.” A significant portion of those sales were through Amazon, which is why their decision to challenge the settlement and incur the possible wrath of this retailing giant is courageous.
Using language that in legal terms is very strong, the publishers objected to the proposed settlement as lacking “adequate factual basis” and “contrary to the public interest.” The outcome of this case will have a profound impact on how books are sold in the digital era, but at least these nine publishers have made it clear where they stand: in favor of robust competition. And that is why they deserve our thanks.
You can read the entire article at The Atlantic.
Folks who are tired of all the back and forth over this lawsuit may want to skip this because I’m going to spill quite a few electrons rebutting this non-sense.
Here in the USA it’s Independence Day. This is my patriotic contribution to cleaning up our public discourse of that form of argumentation described in Harry Frankfurt’s seminal work, On Bullshit. The purpose of Mr. Osnos is clear. He wants to shape your thinking about the DoJ lawsuit by appealing to one of our primal myths.
We are treated to a classic formulation of the fearless little guy taking a brave stand against a powerful and mysterious force that threatens the well-being of the audience. We have the “bold step”, “incur the … wrath of this … giant”, and “courageous”. Look at what our heroes “deserve”: “recognition”, credit”, and “our thanks”. This tightly constructed narrative is built out of a rather amazing amalgam of flotsam and jetsam Osnos has collected the shipwreck that is traditional publishing’s justification for collusive behavior.
Let’s dismantle this edifice piece by piece, remembering that the key to a properly constructed exemplar of this art form is the complete lack of regard for the truth value of any particular component. That lack of regard for truth means that it is pointless to wonder whether the author is aware of the truth or falseness of any particular claim he includes. Nor can we discern when omissions of pertinent facts are deliberate. A practitioner of this dark art doesn’t dabble in such niceties. All that matters is that each element contributes to the construction of his myth.
The foundation of this article is this falsehood: “At the core of the case is the role of Amazon”. The entire publishing industry is irrevocably committed to hiding behind the notion that Amazon is the bogeyman. Amazon is relevant to the DoJ lawsuit only in that Amazon was the target of the alleged colluders’ actions. Far from being the central actor, Amazon isn’t even the alleged victim. Read the lawsuit. The DoJ is alleging that bookbuyers were the victims. The Price-Fix Six aimed to take out Amazon by forcing you and me to pay more for ebooks. That’s the core of this case.
Resting atop the false claim about Amazon’s centrality, is this statement:
The dispute is essentially over how e-book prices should be determined: by the retailer under the longstanding practice known as “wholesale” pricing, or by the publisher in the “agency” model, in which the bookseller takes a commission on each sale.
Sadly, no. This is roughly equivalent to claiming that a lawsuit arising from one person stabbing another person with a butcher knife is about the proper use of butcher knives. That lawsuit would essentially be about the stabbing, not about the butcher knife. And if there was a legal order barring the stabber from approaching the victim with butcher knife in hand, that wouldn’t amount to outlawing butcher knives. This lawsuit is about a group of wholesale producers with substantial market power in conspiring with a new entrant into the retail marketplace to raise the retail prices of ebooks and end the ability of retailers to compete on the basis of price. Agency pricing was just the tool that was used to accomplish these ends.
What Osnos leaves out of his discussion of the settlement is the quite salient fact that agency pricing is not prohibited by the settlement. Mentioning that fact would be a bit problematic for the argument that “Unexpectedly, the agency concept came to be seen as a way to expand opportunities for bookselling and to limit Amazon’s ability to undercut the prices of its competitors.” It wasn’t the agency concept that limited Amazon’s ability to undercut prices. It was the illegal collusion.
And what about that “Unexpectedly” floating untethered from any syntactical anchor at the beginning of that sentence? Who didn’t expect the outcome of the collusion? The colluders certainly expected it. Steve Jobs is on video describing exactly what was about to happen to Walter Mossberg at the iPad launch. Immediately after the five publishers signed an agreement to force Amazon to raise the prices of bestselling ebooks, but before they had implemented the plan, there’s Steve Jobs laying out how they would accomplish it. Anyone who didn’t expect what was about to happen just wasn’t paying attention.
In the real world, Osnos works for a company that is, at most, an interested bystander in this case. In the myth that Osnos is spinning, his employer and the other eight publishers who banded together are transformed into protagonists, acting forcefully against the Amazonian menace. Here is his one original contribution to the publishing industry myth, the notion that this hardy band of smaller publishers have become central actors in this drama by adopting, in full, the Big Six argument that the true threat to competition in the ebook business is not the price-fixing actions of Apple and all of the Big Six except Random House, but Amazon’s use of bestsellers as loss leaders. The act at the core of this bit of myth-making is simply after-the-fact “yeah, what he said”.
So, what are we, the audience, supposed to do in response to this myth? We are supposed to applaud these publishers for the courageous act of filing of a public comment about the proposed settlement between the DoJ and the three publishers who had enough sense to know when to fold rather than going all in on a losing hand. Seriously? For filing a public comment? That’s what passes for action in the world of publishing.
And why are we to believe these publishers are so brave for doing pointless paperwork that will assuredly be ignored by the court because the filers ignored the central issues of the case? Because they might incur the possible wrath of Amazon. If Mr. Osnos wanted to sell me on the idea that Amazon is a ruthless business that will do anything for a buck, I would be willing to listen. But he’s selling the notion that Amazon is a petulant bully that will extract revenge on these publishers because they said unflattering things about Amazon. And his evidence is? Nothing. Crickets.
To briefly recap: I call B.S. on Mr. Osnos.
-Guest post by William Ockham, who is solely responsible for the content of this post. The opinions stated herein do not necessarily reflect the views of the proprietor of this blog or the other guest bloggers.