FTC Sues Amazon for Illegally Maintaining Monopoly Power

From The Federal Trade Commission:

September 26, 2023

The Federal Trade Commission and 17 state attorneys general today sued Amazon.com, Inc. alleging that the online retail and technology company is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power. The FTC and its state partners say Amazon’s actions allow it to stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon.  

The complaint alleges that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging. By stifling competition on price, product selection, quality, and by preventing its current or future rivals from attracting a critical mass of shoppers and sellers, Amazon ensures that no current or future rival can threaten its dominance. Amazon’s far-reaching schemes impact hundreds of billions of dollars in retail sales every year, touch hundreds of thousands of products sold by businesses big and small and affect over a hundred million shoppers. 

“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” said FTC Chair Lina M. Khan. “The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them. Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”

“We’re bringing this case because Amazon’s illegal conduct has stifled competition across a huge swath of the online economy. Amazon is a monopolist that uses its power to hike prices on American shoppers and charge sky-high fees on hundreds of thousands of online sellers,” said John Newman, Deputy Director of the FTC’s Bureau of Competition. “Seldom in the history of U.S. antitrust law has one case had the potential to do so much good for so many people.”

The FTC and states allege Amazon’s anticompetitive conduct occurs in two markets—the online superstore market that serves shoppers and the market for online marketplace services purchased by sellers. These tactics include:

  • Anti-discounting measures that punish sellers and deter other online retailers from offering prices lower than Amazon, keeping prices higher for products across the internet. For example, if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.
  • Conditioning sellers’ ability to obtain “Prime” eligibility for their products—a virtual necessity for doing business on Amazon—on sellers using Amazon’s costly fulfillment service, which has made it substantially more expensive for sellers on Amazon to also offer their products on other platforms. This unlawful coercion has in turn limited competitors’ ability to effectively compete against Amazon.

Amazon’s illegal, exclusionary conduct makes it impossible for competitors to gain a foothold. With its amassed power across both the online superstore market and online marketplace services market, Amazon extracts enormous monopoly rents from everyone within its reach. This includes:

  • Degrading the customer experience by replacing relevant, organic search results with paid advertisements—and deliberately increasing junk ads that worsen search quality and frustrate both shoppers seeking products and sellers who are promised a return on their advertising purchase.
  • Biasing Amazon’s search results to preference Amazon’s own products over ones that Amazon knows are of better quality. 
  • Charging costly fees on the hundreds of thousands of sellers that currently have no choice but to rely on Amazon to stay in business. These fees range from a monthly fee sellers must pay for each item sold, to advertising fees that have become virtually necessary for sellers to do business. Combined, all of these fees force many sellers to pay close to 50% of their total revenues to Amazon. These fees harm not only sellers but also shoppers, who pay increased prices for thousands of products sold on or off Amazon.  

The FTC, along with its state partners, are seeking a permanent injunction in federal court that would prohibit Amazon from engaging in its unlawful conduct and pry loose Amazon’s monopolistic control to restore competition.

Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin joined the Commission’s lawsuit. The Commission vote to authorize staff to file for a permanent injunction and other equitable relief in the U.S. District Court for the Western District of Washington was 3-0.

Link to the rest at The Federal Trade Commission

PG has posted about this matter previously. When the complaint was filed, the public consensus from independent antitrust attorneys was that the complaint was unlikely to succeed.

Unfair Competition

From The United States Department of Justice, Antitrust Division:

The Antitrust Laws

The Antitrust Division enforces federal antitrust and competition laws. These laws prohibit anticompetitive conduct and mergers that deprive American consumers, taxpayers, and workers of the benefits of competition.

The Sherman Antitrust Act

This law prohibits conspiracies that unreasonably restrain trade. Under the Sherman Act, agreements among competitors to fix prices or wages, rig bids, or allocate customers, workers, or markets, are criminal violations. Other agreements such as exclusive contracts that reduce competition may also violate the Sherman Antitrust Act and are subject to civil enforcement.

The Sherman Act also makes it illegal to monopolize, conspire to monopolize, or attempt to monopolize a market for products or services. An unlawful monopoly exists when one firm has market power for a product or service, and it has obtained or maintained that market power, not through competition on the merits, but because the firm has suppressed competition by engaging in anticompetitive conduct. Monopolization offenses may be prosecuted criminally or civilly.

The Clayton Act

This law aims to promote fair competition and prevent unfair business practices that could harm consumers. It prohibits certain actions that might restrict competition, like tying agreements, predatory pricing, and mergers that could lessen competition.

An illegal merger occurs when two companies join together in a way that may substantially lessen competition or tend to create a monopoly in a relevant market. This reduction in competition can harm consumers by potentially leading to higher prices or fewer choices for products or services. It can also harm workers by potentially leading to lower wages or fewer choices for employment.

An illegal tying agreement happens when a company forces customers to buy one product (the tying product) in order to purchase another product (the tied product). The two products are bundled or “tied” together, which gives the tying agreement its name. This practice restricts a customer’s choice and can limit competition. In a fair marketplace, business compete on price and on how good their products are. If an illegal tying arrangement is in place, a seller can use its strong market power on a popular product to force customers to buy a second, lesser product.

Predatory pricing is when a company sets its prices very low, often below cost, to drive competitors out of business. Once the competition is gone, the company can raise prices because it has less or no competition left.  This practice harms competition and, in the long run, it can result in higher prices for consumers and lower wages for workers.

The Clayton Act also prohibits an individual from sitting on boards of competing corporations. This illegal practice can lessen the competitive vigor that would otherwise exist between truly independent rivals. By sharing a board member, the two companies might synchronize pricing changes, labor negotiations, and more.  

The goal of the Clayton Act is to maintain a fair marketplace where various companies can compete, giving consumers more options and better prices, and giving workers a fair market for their labor. This law also protects individuals and small business from being unfairly treated by larger companies. Overall, it works to keep markets competitive and ensure that businesses play fair.

Link to the rest at The United States Department of Justice, Antitrust Division

Inside Amazon’s Secret Operation to Gather Intel on Rivals

From The Wall Street Journal:

For nearly a decade, workers in a warehouse in Seattle’s Denny Triangle neighborhood have shipped boxes of shoes, beach chairs, Marvel T-shirts and other items to online retail customers across the U.S.

The operation, called Big River Services International, sells around $1 million a year of goods through e-commerce marketplaces including eBay, Shopify, Walmart and Amazon AMZN -1.11%decrease; red down pointing triangle.com under brand names such as Rapid Cascade and Svea Bliss. “We are entrepreneurs, thinkers, marketers and creators,” Big River says on its website. “We have a passion for customers and aren’t afraid to experiment.”

What the website doesn’t say is that Big River is an arm of Amazon that surreptitiously gathers intelligence on the tech giant’s competitors.

Born out of a 2015 plan code named “Project Curiosity,” Big River uses its sales across multiple countries to obtain pricing data, logistics information and other details about rival e-commerce marketplaces, logistics operations and payments services, according to people familiar with Big River and corporate documents viewed by The Wall Street Journal. The team then shared that information with Amazon to incorporate into decisions about its own business.

Amazon is the largest U.S. e-commerce company, accounting for nearly 40% of all online goods sold in the U.S., according to research firm eMarketer. It often says that it pays little attention to competitors, instead focusing all its energies on being “customer obsessed.” It is currently battling antitrust charges brought last year by the U.S. Federal Trade Commission and 17 states, which accused Amazon of a range of behavior that harms sellers on its marketplace, including using anti-discounting measures that punished merchants for offering lower prices elsewhere.

The story of Big River offers new insight into Amazon’s elaborate efforts to stay ahead of rivals. Team members attended their rivals’ seller conferences and met with competitors identifying themselves only as employees of Big River Services, instead of disclosing that they worked for Amazon.

They were given non-Amazon email addresses to use externally—in emails with people at Amazon, they used Amazon email addresses—and took other extraordinary measures to keep the project secret. They disseminated their reports to Amazon executives using printed, numbered copies rather than email. Those who worked on the project weren’t even supposed to discuss the relationship internally with most teams at Amazon.

An internal crisis-management paper gave advice on what to say if discovered. The response to questions should be: “We make a variety of products available to customers through a number of subsidiaries and online channels.” In conversations, in the event of a leak they were told to focus on the group being formed to improve the seller experience on Amazon, and say that such research is normal, according to people familiar with the discussions.

Senior Amazon executives, including Doug Herrington, Amazon’s current CEO of Worldwide Amazon Stores, were regularly briefed on the Project Curiosity team’s work, according to one of the people familiar with Big River.

Some aspects were more Maxwell Smart than James Bond. The Big River website contains a glaring typo, and a so-called Japanese streetwear brand that the team concocted lists a Seattle address on its contacts page. Big River’s team members list Amazon as their employer on LinkedIn—potentially blowing their cover.

The LinkedIn page of Max Kless, a former eBay executive who led Big River in Germany before moving to a senior role on the team in the U.S., says that he “developed and led a research subsidiary for Amazon in Germany that prototyped and researched new experiences for Small Business sellers and developers.” Kless didn’t respond to requests for comment.

“Benchmarking is a common practice in business. Amazon, like many other retailers, has benchmarking and customer experience teams that conduct research into the experiences of customers, including our selling partners, in order to improve their experiences working with us,” an Amazon spokeswoman said. Amazon believes its rivals also carry out research on Amazon by selling on Amazon’s site, she said.

. . . .

Virtually all companies research their competitors, reading public documents for information, buying their products or shopping their stores. Lawyers say there is a difference between such corporate intelligence gathering of publicly available information, and what is known as corporate or industrial espionage.

Companies can get into legal trouble for actions such as hiring a rival’s former employee to obtain trade secrets or hacking a rival. Misrepresenting themselves to competitors to gain proprietary information can lead to suits on trade secret misappropriation, said Elizabeth Rowe, a professor at the University of Virginia School of Law who specializes in trade secret law.

Amazon for years has had what it calls a benchmarking team that sizes up rivals to ensure the best experience for people who shop on its site. The team has placed orders on websites such as Walmart.com for delivery around the U.S. to test things such as how long it takes competitors to ship. Other companies also have teams to compare themselves to rivals.

In late 2015, Amazon’s benchmarking team proposed a different sort of project. The business of hosting other merchants to sell their products on Amazon’s platform was becoming increasingly important. So-called third-party sellers on Amazon’s Marketplace, which the company started in 2000, surpassed half of the company’s total merchandise sales that year, and rival retailers had started similar marketplaces.

Amazon wanted to better understand and improve the experiences of those outside vendors. The team decided to create some brands to sell on Amazon to see what the pain points were for sellers—and to sell items on rival marketplaces to compare the experiences, according to the people familiar with the effort.

The benchmarking team pitched “Project Curiosity” to senior management and got the approval to buy inventory, use a shell company and find warehouses in the U.S., Germany, England, India and Japan so they could pose as sellers on competitors’ websites.

The benchmarking team reported into the chief financial officer, Brian Olsavsky, for years, but this year changed to report to Herrington, the consumer chief. Olsavsky and Herrington didn’t respond to requests for comment made through Amazon.

Once launched, the focus of the project quickly started shifting to gathering information about rivals, the people said.

In the U.S., the Big River team started by scooping up merchandise from Seattle retailers holding “going out of business” sales. Some of its first products were Saucony sneakers from a local retailer that was closing. The company registered for a licensing agreement with the popular Marvel superhero franchise to sell Marvel-branded items, and bought items including Tommy Bahama beach chairs from Costco to resell.

In the pitch, Project Curiosity leaders identified online marketplaces that they wanted to sell on, including Best Buy and Overstock. 

The top goal was Walmart, Amazon’s biggest rival. But Walmart had a high bar for sellers on its marketplace, accepting only vendors who sold large volumes on other marketplaces first. Big River initially couldn’t qualify to be a Walmart Marketplace seller, but it did sell on Jet.com, which Walmart acquired in 2016 and later closed in 2020. And in India, it sold on Flipkart, the giant Indian e-commerce marketplace in which Walmart owned a majority stake. 

In order to meet Walmart’s revenue threshold, the Big River team focused on pumping products through Amazon.com to bolster its overall revenue, some of the people said. Big River’s goal wasn’t to do massive amounts of volume on the competing platforms, but to simply get on them and gain access, they said. 

The Amazon spokeswoman said that in 2023, 69% of Big River revenue worldwide was on Amazon.com.

In 2019, Big River finally got onto Walmart’s website. This month, Big River had around 15 products listed on Walmart.com under the seller name Atlantic Lot, including Tommy Bahama beach chairs, cooking woks and industrial-size food containers. In 2023, Big River had more than $125,000 in revenue on Walmart.com alone, according to a person familiar with the matter.

Walmart wasn’t aware that Amazon ran the seller accounts on the Walmart and Flipkart sites before the Journal told it, according to a person familiar with the matter.

. . . .

Atlantic Lot is listed as a “Pro Seller”—a distinction Walmart says is for “top-performing Walmart Marketplace sellers.” Listings show that Walmart Logistics, another Amazon rival, handles storage and shipping for it.

Amazon at the time also was building up its logistics business to store and ship items for sellers for a fee to compete with FedEx and United Parcel Service. The business has boomed over the past decade. Amazon’s total revenue from what it calls third-party seller services has grown nearly twelvefold since 2014 to $140 billion last year, accounting for nearly a quarter of Amazon’s total.

To get information about rival logistics services, the Big River team stored inventory with companies including FedEx. Other targets, according to an internal document, included UPS, DHL, Deliverr and German logistics company Linther Spedition. 

FedEx in 2017 launched FedEx Fulfillment, a competitor to Fulfillment by Amazon, for offering logistics to sellers. Big River was accepted into the FedEx Fulfillment program as an early customer, and the team received early details about pricing, rate cards and other terms as a result of the partnership, according to the people. FedEx had several phone calls and email exchanges with Big River team members who represented themselves as Big River employees and didn’t disclose their employment at Amazon, according to some of the people. 

The team presented its findings from being part of the FedEx program to senior Amazon logistics leaders. They used the code name “OnTime Inc.” to refer to FedEx. Amazon made changes to its Fulfillment by Amazon service to make it more competitive with FedEx’s new product as a result of the information it learned from the partnership, according to one of the people.   

For such meetings, the team avoided distributing presentations electronically to Amazon executives. Instead, they printed the presentations and numbered the documents. Executives could look at the reports and take notes, but at the end of the meeting, team members collected the papers to ensure that they had all copies, the people said. 

. . . .

Amazon took other measures to hide the connection with Big River. Staffers were instructed to use their second, non-Amazon email address—which had the domain @bigriverintl.com—when emailing other platforms to avoid outing their Amazon employment.

“We were encouraged to work off the grid as much as possible,” said one of the former team members, about using the outside email.

Amazon’s internal lawyers reminded Big River team members not to disclose their connection to Amazon in their conversations with FedEx, according to an email viewed by the Journal.

Staffers, who worked in private areas of Amazon offices, were told not to discuss their work with other Amazon employees who weren’t cleared to know about the project. In the early days, some Big River team members had to take time away from their Amazon desk jobs to go to the warehouses to fulfill orders and pack them in boxes to send out.

When gaining access to rival seller systems, Big River members were instructed to take screenshots of competitor pricing, ad systems, cataloging and listing pages, according to the people. They weren’t allowed to email the screenshots to Amazon employees, but instead showed the screenshots to the Amazon employees on the Marketplace side of the business in person so they didn’t create a paper trail, some of the people said. Amazon then made changes it believed improved the seller experience on its site based on the information.

The Amazon spokeswoman said the team was secretive so that it wouldn’t get any special treatment as a seller on Amazon.com.

Still, there were telltales. Registration documents filed with the Washington Office of the Secretary of State for Big River Services, while not mentioning Amazon, list a management team made up of current and former Amazon employees, including lawyers. The management team lists its address as 410 Terry Ave. in Seattle, which is Amazon’s headquarters.

. . . .

Some team members were uncomfortable with the work they were doing, according to some of the people.

Among the anxiety-inducing activities was representing themselves as employees of Big River in person while attending conferences thrown by rivals. For instance, team members attended eBay’s Las Vegas conference for sellers, according to some of the people. EBay describes the event as a way for sellers to meet with eBay management and learn of planned big changes coming for sellers and “exclusive information.” 

Benchmarking-team leadership ordered up what Amazon calls a PRFAQ that would outline what to do if competitors or the press discovered the project. In the event of a leak, leadership was to say that the group was formed to improve the seller experience on Amazon.com, and that Amazon pays attention to competition but doesn’t “obsess” over it. They were also told to act like this was normal business behavior in the event of a leak, according to one of the people. 

In 2017, Amazon formally changed the name of Project Curiosity to the Small Business Insights team to make it sound less cryptic, some of the people said.

The Big River team invented its own brands to sell on the competing sites, including “Torque Challenge” and “Crimson Knot.” 

Teams often changed the brand name once they sold out its inventory, creating new brands when they received new products. 

In India, Amazon gained access to e-commerce giant Flipkart in March 2018 with the Crimson Knot brand, around the time rumors of a Walmart acquisition swirled in local media. Walmart bought a majority stake in Flipkart in May of that year.

Crimson Knot makes wooden home goods, with its website’s “About Us” page saying: “Based in a small wood workshop in Bangalore, our dedicated team of 8 skilled craftsmen work consistently to handcraft each piece from scratch, transforming them into stunning showstoppers.” 

Link to the rest at The Wall Street Journal (Sorry if you encounter a paywall)

PG found the WSJ article to be very interesting. It’s been a very long time since his law school antitrust class, but he suspects that Amazon’s lawyers have set some bright-line boundaries on what Amazon does while watching its competitors.

Any business entity as large as Amazon will attract attention from competitors, and competitors can talk to antitrust enforcers. These people—the Attorney General and the Chair of the Federal Trade Commission—are presidential appointees and, hence, have political connections and sensibilities.

That said, paying attention to competing businesses and what they’re doing is as old as business itself.

If two lemonade stands are set up on the same block, one advertising a glass of lemonade for 25 cents and the other offering a glass of lemonade for 50 cents, how long will it be before one of the stands adjusts its price? Is there anything evil if the operator of one stand walks over to see the offering price of the other stand?

Amazon must face narrowed lawsuit over eBook prices

From Reuters:

A federal judge on Monday heavily trimmed an antitrust lawsuit that accused Amazon.com, opens new tab and others of causing consumers to overpay for eBooks.

U.S. District Judge Gregory Woods in Manhattan accepted a recommendation from a U.S. magistrate last year that the case be narrowed to include, for now, only two plaintiffs who purchased eBooks directly from Amazon.

The judge completely dismissed the plaintiffs’ claims against Hachette Book Group, HarperCollins Publishers, Macmillan Publishing Group, Penguin Random House and Simon & Schuster, finding that the plaintiffs had not shown a conspiracy between Amazon and the book publishers.

The plaintiffs alleged Amazon and the book publishers restricted competition on price through what the complaint called “coercive contractual terms,” leading to higher eBook prices. The lawsuit said Amazon curbed the ability of publishers sell eBooks for lower prices on non-Amazon platforms.

The judge on Monday allowed the plaintiffs’ monopolization claims to proceed against Amazon alone.
Amazon did not immediately respond to a request for comment, and a lawyer for the plaintiffs had no immediate comment. The publishers also did not immediately respond to requests for comment.

. . . .

Woods’ ruling dismissed claims by 13 individual consumers who purchased eBooks through Amazon competitors including Apple, Google and Barnes & Noble. The “indirect” purchasers have no legal standing to support their antitrust allegations, the court said.

. . . .

In one case, the U.S. Federal Trade Commission last year accused Amazon of operating an illegal monopoly that curbs merchants from offering better deals on other platforms. A trial is scheduled for 2026. Amazon has denied the claims.

Link to the rest at Reuters

Regarding Audible

From Brandon Sanderson:

Hey, all. Brandon here, with what I consider to be some pretty exciting news. Many of you may remember when I wrote last year about my worries regarding audiobook royalties (particularly for independent authors).

. . . .

  • I seriously worried about the opacity of reporting to authors about audio sales. We didn’t know what a sale meant, how much of an Audible credit was given to authors when a book sold via one, and how royalties were being accounted.
  • I felt that the industry was taking advantage of authors because of their lack of powerful corporate interests to advocate for them. While video game creators and musicians get 70–80% (88%, in fact, on two major platforms) of a sale of their products in a digital platform, Audible was paying as low as 25%–with the high end being instead 40%.
  • I felt I could have gotten a better deal for myself, but the entire state of this industry was seriously concerning to me. So, I made the difficult decision NOT to release the four Secret Projects on Audible, costing me a large number of sales, to instead try to bolster healthy competition in the space, highlighting some of the smaller Audible competitors.

I hoped this wake-up call would prompt change. I didn’t refuse to put my books on Audible out of retribution or to declare war; I did it because I wanted to shine as powerful a light as I knew how on a system that highly favored the audio distributors over the authors. I was convinced that the people at Audible really did love books and writers, and that with the right stand taken, I could encourage them toward positive change.

I’m happy to say that this stand has borne some fruit. I’ve spent this last year in contact with Audible and other audio distributors, and have pushed carefully–but forcefully–for them to step up. A few weeks ago, three key officers high in Audible’s structure flew to Dragonsteel offices and presented for us a new royalty structure they intend to offer to independent writers and smaller publishers.

This new structure doesn’t give everything I’ve wanted, and there is still work to do, but it is encouraging. They showed me new minimum royalty rates for authors–and they are, as per my suggestions, improved over the previous ones. Moreover, this structure will move to a system like I have requested: a system that pays more predictably on each credit spent, and that is more transparent for authors. Audible will be paying royalties monthly, instead of quarterly, and will provide a spreadsheet that better shows how they split up the money received with their authors.

This part looked really good to me, as I understand their decisions. I tried poking holes in the system, looking for ways it could be exploited, and found each issue I raised had already been considered. This doesn’t mean it’s going to be perfect, and people smarter than me might still find problems that I didn’t. However, I think everyone is going to agree the new system IS better. We will better be able to track, for example, how Audible is dividing money between books purchased with a credit and books listened to as part of their Audible Plus program.

. . . .

I’m not at liberty to explain in its entirety their new structure right now, as they’re still tweaking it, but they did say I could announce its existence–and that I could promise new, improved royalties are on the horizon.

Now, before we go too far, I do anticipate a few continuing issues with the final product. I want to manage expectations by talking about those below.

  • What I’ve seen doesn’t yet bring us to the 70% royalty I think is fair, and which other, similar industries get.
  • Audible continues to reserve the best royalties for those authors who are exclusive to their platform, which I consider bad for consumers, as it stifles competition. In the new structure, both exclusive and non-exclusive authors will see an increase, but the gap is staying about the same.
  • Authors continue to have very little (basically no) control over pricing. Whatever the “cover price” of books is largely doesn’t matter–books actually sell for the price of a credit in an Audible subscription. Authors can never raise prices alongside inflation. An Audible credit costs the same as it did almost two decades ago–with no incentive for Audible to raise it, lest it lose customers to other services willing to loss-lead to draw customers over.

These are things I’d love to see change. However, this deal IS a step forward, and IS an attempt to meet me partway. Indeed, even incremental changes can mean a lot. When I was new in this business, my agent spent months arguing for a two-percent change in one of my print royalties–because every little bit helps. These improvements are going to be larger than two-percent increases.

Link to the rest at Brandon Sanderson

As PG has mentioned before, he doesn’t think that many of Amazon’s best technical and business minds are to be found in KDP and Audible.

While indie authors help save Zon’s bacon way back when all the big New York publishers got together and decided to stop selling books to Amazon, that’s ancient history at this point, however.

Just like KDP, Amazon has kept the Audible managers in their own little world, separate from the giant parts of Zon that generate billions of dollars every couple of weeks.

So, Audible gets sloppy about indie authors and audiobooks. Zon is the biggest seller of audiobooks by light-years, but the dollar amount audiobook sales generate won’t move any big needles in Amazon’s megaworld.

Brandon sells a huge number of print books/ebooks/audiobooks for Zon. While Brandon moving everything from KDP/Audible won’t move Amazon’s big revenue needle, it will definitely impact KDP/Audible revenues and profits. PG suspects that if Brandon decides to go another way, the hit on KDP revenues would be substantial, maybe big enough so the bigger bosses in corporate who have the book businesses as a part of their larger responsibilities might ask embarrassing questions and maybe fire some KDP bigshots.

But this is pure speculation on PG’s part and he could be completely wrong.

The world’s toughest man sues the world’s biggest bookseller

From Nathan Bransford:

If you’ve spent any time on Amazon searching for books lately, you probably know that it’s become an absolute wasteland of junk–A.I. imitations of real authors, garbage A.I. “books,” shady third party sellers, and knockoffs galore. One author, David Goggins, a former Navy SEAL who once did 4,030 pull-ups in 17 hours, has sued Amazon over counterfeit copies of his self-published books being sold on Amazon.

As publisher Ken Whyte notes, what’s extraordinary about this is that Goggins exclusively sells on Amazon, who is essentially functioning as Goggins’ publisher and distributor. The fact that Goggins, who has sold millions of copies, has had to resort to legal action against his own publisher to deal with counterfeit copies shows the extent to which Amazon simply does not seem to care about reining in fraudulent third parties because they take a cut of the sale anyway.

And woe betide the smaller authors (both literally and metaphorically) without the platform and resources to deal with this problem. I worry this is the bleeding edge of an era where generative A.I. drowns us all in garbage, with the only “winners” being scammers and tech CEOs.

Link to the rest at Nathan Bransford

Fake Books at Zon

From Nathan Bransford:

If you’ve spent any time on Amazon searching for books lately, you probably know that it’s become an absolute wasteland of junk–A.I. imitations of real authors, garbage A.I. “books,” shady third party sellers, and knockoffs galore. One author, David Goggins, a former Navy SEAL who once did 4,030 pull-ups in 17 hours, has sued Amazon over counterfeit copies of his self-published books being sold on Amazon.

As publisher Ken Whyte notes, what’s extraordinary about this is that Goggins exclusively sells on Amazon, who is essentially functioning as Goggins’ publisher and distributor. The fact that Goggins, who has sold millions of copies, has had to resort to legal action against his own publisher to deal with counterfeit copies shows the extent to which Amazon simply does not seem to care about reining in fraudulent third parties because they take a cut of the sale anyway.

And woe betide the smaller authors (both literally and metaphorically) without the platform and resources to deal with this problem. I worry this is the bleeding edge of an era where generative A.I. drowns us all in garbage, with the only “winners” being scammers and tech CEOs.

Link to the rest at Nathan Bransford

Protecting Your Work

From Booklife:

The recent suspensions of authors from Amazon’s Kindle Direct Publishing for “copyright infringement”’ provide a powerful lesson on the importance of protecting one’s work. During this year’s BookLife Indie Author Forum, I took part in a panel discussion devoted to copyright issues. Last year, I also facilitated a roundtable discussion by the Independent Book Publishers Association, during which we talked about the hot topic of KDP suspensions for copyright infringement.

Case in point: I have an author-publisher friend who had a book on Amazon since the CreateSpace days without incident. For years, this book had been in publication, and the author owned the copyright. Several months ago, the author received an email from KDP saying that the book included copyright or trademark infringement and that their entire account would be suspended. For a publisher, this is a major problem.

The author’s inquiries about the reason and requests for further documentation and resolution were ignored. He contacted KDP on a regular basis, and, because of his persistence, the account was magically restored, and the book is live again. Compared with some of the other horror stories I’ve heard, my friend should be happy.

Another author told me he spent over $20,000 in legal fees for two books after KDP suspended his account for “copyright infringement.” His requests for clarification were ignored, and no resolution has been provided. Is anyone safe?

If you’re anything like me, you might think that the solution is simply to use publishing sites such as IngramSpark (my favorite), Draft2Digital, or Kobo, which also distribute your title to Amazon. Wrong. One author used one of these providers and shared that Amazon said that the company would have to contact the publisher, which was him, and then the distributor. When he contacted the distributor, the distributor contacted Amazon, which responded that there were no problems with the book and that it was available for purchase. When the author checked, it was not. This problem has still not been resolved.

As problematic as this is, just imagine if you had multiple books. All of your titles can be suspended if your KDP account is frozen. What happens to your royalties during this time? And if you spent money on Amazon ads, you would be paying the same entity that is holding your royalties during the suspension. If you were to continue advertising, on or outside of Amazon, you could lose money indefinitely.

The terms and conditions say Amazon can terminate without cause and keep the royalties owed, including any sales of inventory on hand. The terms only permit dispute resolution through the American Arbitration Association. Ever call the American Arbitration Association? One person was quoted an arbitration fee of $1,725 plus legal fees and an estimate of five to 10 months for resolution. Ouch! This amount is cheaper than the $20,000 I quoted earlier, but many authors cannot afford $1,725 in legal fees.

Here are some of the things that can get your KDP account suspended: using two different ISBNs for the same book format—i.e., one ISBN on IngramSpark and one on KDP (but using separate ISBNs for the paperback, hardcover, and e-book versions is fine); rights reverting to you from a previous publisher but have not been cleared by KDP; having a metadata change that implies a change in rights ownership; changing your imprint name (If you use a publishing provider such as IngramSpark, you can add an imprint name to your dashboard. This means that you need to check which one you use for each book you publish to avoid it defaulting to the wrong one); someone reports you for copyright infringement (even if the claim is not valid); or a bot error that is beyond an author’s control.

What can you do once your account is suspended? The answer varies depending on what triggered your suspension, which, according to some of those affected, is hard to get a clear answer from Amazon about. Here are a few things you can provide:

1. A screenshot of your ISBN account showing your name as owner and the imprint name with your book’s ISBN displayed

2. Approved copyright documentation from copyright.gov, not just the application (which can take up to eight months to receive)

3. Invoices and bank statements for editing costs from both your end as the publisher and from the editor’s end

4. Similar invoices and statements for cover design

Link to the rest at Booklife

Amazon announces AI shopping assistant called Rufus

From CNBC:

Amazon on Thursday announced a new artificial intelligence assistant for shopping called Rufus.

The tool is designed to help users search and shop for products. Shoppers type or speak a question into the search bar in Amazon’s mobile app and a chat window will appear at the bottom of their screen. Users can ask conversational questions such as, “What are the differences between trail and road running shoes?” or “Compare drip and pour-over coffee makers.”

“Rufus meaningfully improves how easy it is for customers to find and discover the best products to meet their needs,” Amazon said in a blog post.

Rufus uses Amazon’s product catalog, customer reviews and Q&As, as well as information from across the web to answer questions, the company said.

Amazon said it’s testing the feature with a small subset of users in the U.S. but intends to roll it out nationwide in the coming weeks.

CEO Andy Jassy has said the company plans to incorporate generative AI across all of its businesses. Amazon will likely give an update on its AI efforts when it reports fourth-quarter earnings after the bell Thursday.

Link to the rest at CNBC

Amazon Turns $2.7 Billion Loss in 2022 to a Profit of $30 Billion in 2023

From Publishers Weekly:

Cost cuts and a record holiday season, which included a 9% fourth-quarter increase in online sales, turned a $2.7 billion loss in 2022 to a $30.4 billion profit last year at Amazon, the tech giant reported Thursday afternoon. Operating income jumped from $12.2 billion in 2022 to $36.9 billion last year, with the majority of that profit coming from its web services division, AWS, which had income of $24.6 billion. Total company sales increased 12%, to $574.8 billion.

Following 2022’s disappointing year, Amazon CEO Andy Jassy said that reducing costs was his top priority, and the company undertook a number of initiatives to cut expenses, including implementing layoffs throughout the company. Amazon is believed to have eliminated some 27,000 jobs last year, and among the casualties were staff members from the now-shuttered Comixology, who were let go last January.

In addition to layoffs, Jassy attributed the financial improvement to the reorganization of Amazon’s U.S. fulfillment network along regional lines, a move Jassy said improved delivery times while also cutting costs. The reorg, the company reported, allowed the company to deliver 4 billion units to U.S. customers within one day of ordering last year.

. . . .

Looking at 2024, Amazon predicted that net sales will increase between 8% and 13% compared with the first quarter of 2023. Operating income is expected to be between $8.0 billion and $12.0 billion, compared with $4.8 billion in first quarter 2023. The unexpectedly strong finish to 2023 and solid outlook for 2024 helped to drive up Amazon’s stock price, with its shares selling around $171 per share this morning, up roughly 7% from Thursday.

Link to the rest at Publishers Weekly

Want to Improve Your Amazon Ranking? Improve or Update All of Your Book Descriptions

From Jane Friedman:

Let’s say you’re running some Facebook ads and you’re getting lots of clicks, but no sales. This tells Amazon your book isn’t relevant to the search, and that will impact your search rank on Amazon.


Yes, really.

Amazon’s goal is to serve up things its consumers want to buy; the site isn’t there for window shoppers, and the website is quite intelligent. If someone lands on your book page and immediately clicks off without engaging with your page at all (expanding your book description to reach more, scrolling down to read the reviews), that tells Amazon your book isn’t right for the market; consequently, it becomes harder to rank. So if you’re thinking about your own Facebook ads (or even your Amazon ads) that are getting lots of clicks but no buys, you may want to consider how it’s impacting your relevancy score and your overall visibility on Amazon.

So, how far back does Amazon go when considering your overall relevancy score?

Remember that first book you published that didn’t do well? The cover wasn’t great—you knew it could have or should have been better—but it was your first book, so you took it in stride. You learned from your mistakes and you moved on.

The thing is, Amazon never moves on. Somewhere, lurking in the back end of Amazon is a black mark beside your name, and that mark means, This author once published a book no one seemed to like = low relevancy.

Amazon cares about relevancy. It’s how the entire site—with all of its millions of products—manages to find exactly the thing you’re looking for when you need it. Plug in a few keywords and, boom, the exact widget, lotion, or book you were looking for appears. This is why relevancy is so important and why making sure everything connected to your Amazon account (even the older books you’ve published) is in tiptop shape. This point can’t be overemphasized.

The other element of this as it relates to Amazon ads is that the less conversion you have on your Amazon book page (i.e., the lower your relevancy score), the more your ads will cost you. And if your ads never seem to do well across the board, Amazon will ding your relevancy score as well. If you have an ad set that’s not doing well, kill it.

Is there any hope for that older book that didn’t do well? Fortunately, there are some options. Often, it means revisiting an older title, maybe republishing it, revamping the cover, or in extreme cases, taking it down entirely. But that’s pretty much a last resort.

A few years ago I noticed that our website wasn’t ranking as well as it should for the term “book marketing.” Considering that that’s the work we do, it’s a pretty important term to rank for. Upon investigation, I discovered that a page on our website was broken. By “broken,” I mean it had no keywords, no title tags; it was basically a mess. I fixed it and within about three months, our website was back and ranking again.

You can use the same method for an older book: fix what needs fixing and show Amazon that you mean business. The algorithm keeps a close eye on fixes, updates, and any polishing you do to your book or book page. It’s easier than ever to get back on track, and small changes and enhancements can help build your status in the Amazon ecosystem and grow your presence for both your author page and your book pages.

A great way to get back on track: improve your book descriptions

Whether we’re talking about Amazon or any other online retailer, book descriptions are more important than most authors realize. Too often I see simple details overlooked that can make or break an author’s ability to turn an Amazon browser into the next book buyer.

Dumb down the description

Most people bristle at the saying “dumb it down,” but dumbing it down doesn’t mean your audience is stupid; it means you’re making your content easier to absorb. Brains are meant to conserve energy, and reading long, complex text exhausts the brain and consequently your target reader. Fewer words, shorter sentences. Using eighth-grade writing doesn’t mean you sound like an eighth grader; it reduces the amount of mental energy a consumer needs to use to absorb what you’re telling them.

Make the description easy to scan

If you have huge blocks of text without any consideration for spacing, boldface type, bulleted lists, short paragraphs, or other forms of highlighting that help the reader scan and zero in on the best of the best you have to offer, that’s unlikely to attract readers. When your description is visually and psychologically appealing, it invites the reader to keep going, instead of clicking to a different page.

Our minds are image processors, not text processors, so huge pieces of text that fill a page overwhelm the mind and in fact slow down the processing time considerably.

When we’re looking at websites, our attention span is even shorter than it is when we’re reading a book. Even on sites like Amazon—where consumers go to buy, and often spend a lot of time comparing products and reading reviews—it’s important to keep in mind that most potential readers will move on if your description is too cumbersome.

The first sentence in the description should be a grabber. Often, this is where authors use their elevator pitches. This text could also be an excerpt of an enthusiastic review or some other endorsement; regardless, it should be bolded, and your elevator pitch should always follow this format.

Link to the rest at Jane Friedman

Let’s Rescue Book Lovers From This Online Hellscape

From The New York Times:

If you have not kept up with the latest scandal in the world of young adult publishing, it is a doozy. It involves a debut author with a lot of buzz, lies, clumsy alibis, “review bombing,” a long and sordid confession — and, of course, Goodreads. Because whenever there is a meltdown in publishing, Goodreads, the Amazon-owned site that bills itself as “the largest site for readers and book recommendations,” is reliably at the center of it.

You might wonder if Goodreads isn’t just an enabler of scandal but the problem itself.

But first, the scandal: Internet sleuths figured out that an author named Cait Corrain, whose debut novel was scheduled for 2024, had created fake accounts on Goodreads in order to review-bomb other books — overwhelming them with negative one-star reviews. When confronted online, she concocted a fake online chat to divert blame to a nonexistent friend; when that hoax was uncovered, she confessed, citing a “complete psychological breakdown.” Her publisher and her agent dropped her; the planned publication of her novel was canceled. As often happens in these scandals, the use and abuse of Goodreads — a site whose cheery name masks a recent history of abhorrent user behavior — has left many people hurt and at least one person’s career in ruins.

Goodreads is broken. What began in 2007 as a promising tool for readers, authors, booksellers and publishers has become an unreliable, unmanageable, nearly unnavigable morass of unreliable data and unfettered ill will. Of course, the internet offers no shortage of bad data and ill will, but at its inception Goodreads promised something different: a gathering space where ardent readers could connect with writers and with one another, swapping impressions and sharing recommendations. It’s an idea that’s both obvious (the internet is great at helping like-minded people assemble) and essential (reading is a solitary activity, but there is great joy in talking through a book afterward). In fact, Goodreads is still an essential idea — so much so that it’s worth fighting to fix it.

When I joined the site in 2007, I felt I had finally found my place online. At the time, I was still using a physical notebook to keep a list of the books I’d read or wanted to read, so discovering a place to track, rate and review books felt entirely, if you’ll pardon the word, novel. After Amazon’s acquisition of it in 2013, Goodreads seemed primed to either sink or soar. While Amazon had won few fans in the book community, thanks to its predatory business practices, it is also the foremost online marketplace for books, and so a companion site dedicated to discussing books seemed an obvious and potentially beneficial complement.

. . . .

But Goodreads quickly began to languish in an awkward limbo — neither a retailer nor an inviting online salon. Still, it’s become the most popular book discussion site, by far, with a reported 125 million members as of late 2022. As book coverage and criticism have been slashed in other areas of popular media, Goodreads, by default, has taken on an outsize role in the book world’s imagination. But it’s also devolved into a place where users’ worst instincts are indulged or even encouraged.

Whether it’s the rampant practice of review-bombing books that are listed online long before publication (often targeting young adult novels that have acquired a whiff of offensiveness, some of which are ultimately pulled from publication) or the internet hecklers hounding beleaguered authors or those beleaguered authors tracking down their Goodreads hecklers and publicly shaming them, the combative culture of Goodreads is antithetical to the spirit in which it was started. My as-yet-unpublished memoir in essays already has two ratings on Goodreads, but it won’t even go out to early readers until next year. It’s become routine for publishers to warn authors that Goodreads is a site meant for readers, not for writers — which is to say, what was intended to be a forum for engagement is now a place authors enter at their peril.

In an ideal world — one in which it wasn’t owned by Amazon — Goodreads would have the functionality of a site like Letterboxd, a social network for movie fans. Letterboxd has called itself “Goodreads for movies,” but it has far surpassed that initial tag line, having figured out how to create a smooth and intuitive user experience, provide a pleasant and inviting community and earn revenue from both optional paid memberships and advertisers, including studios that produce the films being discussed. Meanwhile, publishers still rely on Goodreads to find potential readers, but targeted advertising has grown both less affordable and less effective.

So how to fix it? It starts with people: Goodreads desperately needs more human moderation to monitor the goings-on. Obviously, part of any healthy discussion is the ability to express displeasure — those one-star reviews, ideally accompanied by well-argued rationales, are sacrosanct — but Goodreads has enabled the weaponization of displeasure.

It’s not just fledgling authors being pummeled. This year, Elizabeth Gilbert, the best-selling author of “Eat, Pray, Love,” decided to withdraw a forthcoming novel, “The Snow Forest,” after Goodreads users bombarded its page with one-star reviews objecting primarily to the fact that the novel (which no one had yet read) was set in Russia and would be published at a time when Russia and Ukraine were at war. There is most likely no way to eliminate personal attacks entirely from the site — or from the internet, for that matter — but having more human beings on hand to mitigate the damage would certainly improve the experience.

Link to the rest at The New York Times

Perhaps it’s cluelessness on PG’s part, but he hasn’t been to Goodreads for centuries. He remembers going to Goodreads long ago on a handful of occasions, but has only the vaguest memories of the site. Whatever he found during those early visits didn’t motivate him to return until he read the OP. He went to check out Goodreads and discovered the same general look as it had the last time he visited when Amazon acquired it.

Goodreads was founded by a rich kid named Otis Chandler and his wife.

Goodreads Otis was the son of another Otis Chandler, the very wealthy publisher of The Los Angeles Times, the largest circulation newspaper in the state. Dad inherited the paper from an earlier Otis, AKA California royalty. Goodreads Otis got richer when he sold the site to Amazon.

Back to PG’s impressions of Goodreads – his disinterest is clearly a minority response. Goodreads has over 140 million members, maybe more, in its multitudinous forums.

If the OP is accurate (and PG has no reason to doubt its accuracy), Goodreads represeents an extraordinarily self-defeating community management failure on the part of Amazon.

Online internet forums go back to the mid-90’s and their predecessors, bulletin board systems (BBS’s) go back to the dial-up modem days of the late 1970’s.

Shortly after the first BBS’s went up, internet trolls appeared.

Operators of internet gathering places in the 80’s developed effective troll controll techniques – don’t feed the troll – not long after trolls became a thing. Failure to do so meant a bad-drives-out-the-good behavior that springs up whenever you get a large enough community of homo sapiens together and the community collapses.

The ‘Zon has enough bright people and big computers to put together a system that will boot trolls out of the community and then boot them out again when they open a new account. Ditto for an organized review-bombing campaigns.

Throwing the Book at Amazon’s Monopoly Hold on Publishing

From The Nation:

It’s a common trope in movies: A mob enforcer walks into a shop, looks around, and then says to the owner, “Nice place you got here. It’d be a shame if something happened to it.” Every viewer understands that a shakedown is in the works. The shop owner can either pay up immediately, or else his livelihood will burn to the ground.

But what do we call it when a large firm makes a similar, although not quite so blatant, threat to a smaller firm that is reliant on its business? What’s the laissez-faire euphemism for an arrangement that coerces the smaller firm into acquiescing to the larger firm’s unreasonable demands because if it refuses, it will lose substantial business and face financial ruin?

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In the book market, this is Amazon’s position in relation to publishing houses. The antitrust lawsuit brought by the Federal Trade Commission (FTC) and 17 states last fall hardly addresses the book industry—the first market that Jeff Bezos and his now trillion-dollar corporation targeted and took over. But that doesn’t mean Amazon is, or should be, off the hook.

Amazon is the largest bookseller in the world. Consequently, the publishing industry relies on it to get its product to market. Amazon earns an estimated $28 billion a year from selling books. In 2020, the House Judiciary Committee found that Amazon controlled more than 50 percent of the overall (online and offline) print book market and more than 80 percent of the e-book market. In other words, if a publisher’s titles aren’t available on Amazon, it might as well close shop and find a new line of business. Even the biggest publishers are no match for Amazon’s death grip on the book market.

That’s why all publishers, including those in the “Big Five” such as Hachette and Penguin Random House, are afraid of doing anything that might upset the company. Amazon has proven time and again that it won’t hesitate to retaliate against publishers that step out of line. These retaliatory games include removing the “buy” button beneath a title’s listing on the site, delaying shipping books to customers, claiming that titles are out of stock when Amazon is actually just refusing to restock the titles, and rejecting pre-sales for new books. In 2014, when Amazon and Hachette were embroiled in a distribution dispute, Amazon marginalized the publisher on the site for eight months. This had a major impact on the publisher’s sales. According to Hachette, it suffered an 18 percent drop in US sales during the third quarter of 2014, mostly due to “the difficult situation with Amazon.” Hachette authors likewise lost income and perceived influence in the publishing world when Amazon suppressed their titles.

Amazon’s power over books not only dampens revenue and reputation for publishers and authors; the online behemoth also exerts its market-shaping clout to create a profit-fixated monoculture in a publishing industry pushed to maximize short-term returns under successive waves of consolidation. This kind of pressure represents a little-noted civic injury to us all, since a vibrant publishing market is critical for the free exchange of ideas, vigorous public debate, and cultural diversity.

Amazon will surely insist that it has achieved its dominance over the book market by competing in entirely legitimate ways. But that argument represents a drastically foreshortened and distorted account of recent publishing history. In its early years, Amazon enjoyed a critical competitive advantage over brick-and-mortar bookstores by exploiting court-created loopholes to avoid collecting sales taxes in many states. By evading these taxes, Amazon deprived state and local governments of revenue and gave itself an important competitive edge over rivals. Readers quickly realized that they could avoid paying a 5 percent sales tax on a title they might purchase at a local independent bookstore by buying it on Amazon.

What’s more, Amazon frequently used its size and broad scope of business to sell certain titles for less than what it paid. More than a decade ago, it was accused of selling some e-books at a loss—for instance, buying titles at $14.99 wholesale and reselling them at $9.99 retail. Because of its enormous scale of operation, Amazon could bear these losses, while most rivals couldn’t. The clear aim of such tactics was to lure long-term customers away from competitors in the market, in order to secure their eventual demise. The vast influence Amazon enjoys today in the publishing supply chain shows just how effective that strategy has been.

As Amazon consolidated its hold over book publishing, it pivoted to new measures aimed at permanently securing its market dominance. Amazon now commonly leans on publishers to demand deep discounts. As business journalist Brad Stone has explained, Jeff Bezos dubbed this campaign of coercion “gazelle.” In this market parable, Amazon is a cheetah who started by targeting the most vulnerable publishers—the gazelles—for special discounts and moved on to the stronger ones from there. Wielding its enormous power to squeeze suppliers, Amazon undercut the competition on price while still making profits.

Link to the rest at The Nation

PG disagrees.

What should the price of a book be? What the publisher thinks it should be?

Everyone knows that liberal arts majors who graduated with not-great but respectable grades from expensive private colleges, AKA Big Publishing executives, are perfectly prepared to determine what the proper sales price for each of their books should be in Des Moines or Fresno or Pascagoula or Tucson or Little Rock or Missoula or Tucson.

(PG suggests most publishing executives couldn’t put a pin within 200 miles of the location of any of these cities on a map of the United States that only showed the outline of each state.)

If selling a product at a loss were against the law, the manager of every grocery store, auto dealer and Walmart location in the United States would be a criminal. Loss leaders have been standard retailing practice for centuries.

If we save physical bookstores, are we saving Meg Ryan’s Shop Around The Corner or Barnes & Noble?

By saving Barnes & Noble, are we saving good jobs with fair wages? In most locations, Barnes & Noble pays minimum wage as the starting salary in its stores. Fringe benefits are similarly skimpy.

Amazon pays its warehouse workers an average of $19 per hour plus full medical and dental insurance.

Additionally, Amazon funds full college tuition, as well as tuition to obtain high school diplomas, GEDs, and English as a Second Language (ESL) proficiency certifications for its front-line employees —including those who have been at the company for as little as three months. Amazon also offers three free education programs to provide employees with the opportunity to learn skills within data center maintenance and technology, IT, and user experience and research design. This includes warehouse workers.

Worker well-being aside, PG suggests that Amazon is the best thing that has ever happened for people who enjoy reading books.

And the Amazon sales-tax avoidance item (now ancient history) mentioned in the OP?

Every online vendor in the United States did exactly what Amazon did – paid the sales taxes they were legally obligated to pay and didn’t pay sales taxes if they weren’t obligated to collect and pay.

Millions of consumers did the same thing with sales taxes. If they lived in a state with a sales tax, they purchased online from a vendor in a state that didn’t have a sales tax and thought nothing about it.

Each state that collected a sales tax also had what was called a “Use Tax.” Everybody who purchased an item outside their state of residence from a vendor located in a state that had no sales tax was supposed to file a Use Tax return in their state of residence and pay the use tax on out-of-state purchases in locations that didn’t collect a sales tax. (Sound complicated? It was/is.)

Who paid Use Taxes? Large companies that purchased millions of dollars worth of goods from states with no sales tax – 50 tractor-trailer semi trucks.

How many individuals who were not millionaires filed use tax returns for out-of-state purchases in locations that had no sales tax? 0%

Figuring out who had traveled across the state line to purchase a Big Mac and a milkshake without paying a sales tax was effectively impossible and definitely not worth the time of a state employee. Most individuals had no knowledge use taxes even existed.

What zillions of Amazon customers did about filing Use Tax returns on their Amazon purchases was not Amazon’s responsibility legally or morally. The charge that courts had created “loopholes” was simply the courts applying well-established legal doctrine under the Constitution. One state cannot force another state to enforce the laws of the first state.

The guy in the OP who saw Amazon dirty dealing for not collecting sales taxes that Amazon was not obligated to collect or pay has an advanced case of Amazon Derangement Syndrome.

As PG mentioned, the whole not collecting sales taxes is ancient history. Amazon now collects and pays sales taxe everywhere.

With regard to the FTC antitrust suit against Amazon, PG and more than a few people who know a lot more about antitrust law than PG does have serious doubts about the validity of the theory behind the charges.

The current chair of the FTC, appointed by Pres. Biden, has been riding an anti-Amazon hobbyhorse since she was in law school. More than a few prominent antitrust experts have criticized the basis for the FTC suit.

PG has been remiss in not posting about the Amazon antitrust suit. He’ll do a deeper dive into the Amazon antitrust litigation and likely post about interesting items he finds.

Amazon’s $4 Billion Holiday Fix: Half-Empty Trucks, $3,000 Bonuses

From Bloomberg:

Most cargo ships putting into the port of Everett, Washington, brim with cement and lumber. So when the Olive Bay docked in early November, it was clear this was no ordinary shipment. Below decks was rolled steel bound for Vancouver, British Columbia, and piled on top were 181 containers emblazoned with the Amazon logo. Some were empty and immediately used to shuffle inventory between the company’s warehouses. The rest, according to customs data, were stuffed with laptop sleeves, fire pits, Radio Flyer wagons, Peppa Pig puppets, artificial Christmas trees and dozens of other items shipped in directly from China—products Amazon.com Inc. needs to keep shoppers happy during a holiday season when many retailers are scrambling to keep their shelves full.

By chartering the Olive Bay and dispatching it to a relatively sleepy port a few miles north of hometown Seattle, Amazon did an end-run around the shipping snarls that have stranded holiday inventory in Los Angeles and other ports. Besides Everett, the company has also docked at the Port of Houston. Such extreme measures have given Amazon executives confidence they’ll have adequate inventory to meet yet another record-breaking holiday shopping season, when Adobe projects U.S. consumers will spend $207 billion online, up 10% from last year. Many retailers have exhorted consumers to shop early to avoid disappointment. Amazon’s unflinching message: Bring it on!

In addition to chartering ships like the Olive Bay, Amazon hired 150,000 U.S. seasonal workers to help pick, pack and ship items, boosting pay and offering signing bonuses of up to $3,000. It’s dispatching half-full trucks to get packages to customers on time. The logistical effort’s projected $4 billion cost threatens to wipe out the company’s profit during its most important three months of the year. But for Amazon, which burnished its reputation serving as a lifeline during the Covid-19 outbreak, the holiday season is an opportunity to extend its advantage over rivals.

If the company succeeds in meeting its promises to customers this year, that will be thanks to Amazon-chartered ships taking products from factories in Asia, Amazon Air cargo jets crisscrossing the U.S., Amazon-branded vans departing from hundreds of local delivery depots and the hundreds of thousands of employees and contractors at each step along the way.

“There are structural advantages you have in redundancy if you’re Amazon,” says Jason Murray, a former Amazonian who led teams working on logistics software. “Amazon has its own transportation network, it has access to all the carriers. Multiple ships, multiple factories.”

This logistical prowess hasn’t been lost on the merchants who sell products on Amazon’s sprawling marketplace. For years, they resisted using the company’s global shipping service because doing so means sharing information about pricing and suppliers, data they fear the company could use to compete with them. But container shortages in the leadup to the holiday season persuaded many of them to overcome their qualms and entrust their cargos to the world’s largest online retailer. “Amazon had space on ships and I couldn’t say no to anyone,” says David Knopfler, whose Brooklyn-based Lights.com sells home décor and lighting fixtures. “If Kim Jong Un had a container, I might take it, too. I can’t be idealistic.”

Link to the rest at Bloomberg

How authors are finding success on Kindle Vella

From MarketScreener:

Kindle Vella, Amazon’s mobile-first reading experience for serialized stories, lets readers follow stories they love. In the short time since Kindle Vella launched, thousands of authors have published thousands of stories, totaling tens of thousands of episodes across dozens of genres and microgenres.

Readers have a long history of loving serialized stories. Authors like Charles Dickens, Harriet Beecher Stowe, Alexandre Dumas, and Leo Tolstoy are among the many who wrote famous serialized stories. They offer short reading experiences that also provide connection to a larger, layered story or to an author for a long period of time.

Continuing in this classic tradition, authors are publishing serialized stories on Kindle Vella for mobile reading during short breaks in busy modern life. We talked to five authors of breakout Kindle Vella hit stories and discovered how they are finding success, reaching readers, and stretching themselves creatively with Kindle Vella.

. . . .

Callie Chase

“The key to success on Kindle Vella is writing the best story you can, with each short episode complete, engaging, and satisfying for a reader in line at the grocery store or school pickup,” said Callie Chase, who was looking for the right opportunity to publish her dystopian paranormal story Bug when she discovered Kindle Vella.

Chase had finished writing Bug, but Kindle Vella’s episodic storytelling format enabled her to introduce a cohesive cast of characters, tell the story from varying the points of view, and play with the story’s timeline, all while each episode could stand on its own. “Even if it’s been a week since they last read, readers can easily pick up where they left off,” she said.

Bug is one of the most popular stories on Kindle Vella, which launched for readers in summer 2021, and readers have consistently rated it a top story. Kindle Vella readers show their support by giving episodes a “Thumbs Up” and voting once a week for their favorite story.

Bug has received over 2,000 Thumbs Up and is currently No. 15 on the Top Faved leaderboard. To keep up this momentum, Chase has stuck to a strict publishing schedule, releasing episodes three times a week, always on the same day, so her readers know when to expect them. She includes this schedule in the story description to help catch the attention of new readers looking for something regular to read. She pre-schedules the publication of all her episodes to ensure she doesn’t miss a release.

Pepper Pace
The Galatian Exchange

Using social media and a newsletter to promote new episodes of The Galatian Exchange is crucial for science fiction author Pepper Pace, whose Kindle Vella story has reached No. 4 on the Top Faved leaderboard. The Galatian Exchange has also earned over 2,000 Thumbs Up from readers.

This type of interaction with readers is natural for Pace, who got started writing in online writing groups and enjoys online multiplayer role-playing games. “Being able to see the instant response to each episode of my series in the form of Thumbs Up and ranking makes the storytelling experience fun and exciting for me and my readers,” Pace said. “I enjoy being able to track my stories’ progress on the Kindle Vella Dashboard, which updates continuously as the day goes on. I can also see, with the number of unlocked reads, the number of new readers that I get.”

Link to the rest at MarketScreener

Here’s a link to Vella Top-Faved, the most popular Vella Stories as voted by Vella readers.

Bezos as Novelist

From The Paris Review:

The first thing that needs to be noted about the collected works of MacKenzie Bezos, novelist, currently consisting of two titles, is how impressive they are. Will either survive the great winnowing that gives us our standard literary histories? Surely not. Precious few novels do. Neither even managed, in its initial moment of publication, to achieve the more transitory status of buzzy must-read. But this was not for want of an obvious success in achieving the aims of works of their kind—that kind being literary fiction, so called to distinguish it from more generic varieties. In Bezos’s hands it is a fiction of close observation, deliberate pacing, credible plotting, believable characters and meticulous craft. The Testing of Luther Albright (2005) and Traps (2013) are perfectly good novels if one has a taste for it.

The second thing that needs to be noted about them is that, after her divorce from Jeff Bezos, founder and controlling shareholder of Amazon, their author is the richest woman in the world, or close enough, worth in excess (as I write these words) of $60 billion, mostly from her holdings of Amazon stock. She is no doubt the wealthiest published novelist of all time by a factor of … whatever, a high number. Compared to her, J. K. Rowling is still poor. 

It’s the garishness of the latter fact that makes the high quality of her fiction so hard to credit, so hard to know what to do with except ignore it in favor of the spectacle of titanic financial power and the gossipy blather it carries in train. How can the gifts she has given the world as an artist begin to compare with those she has been issuing as hard cash? Of late it has been reported that Bezos, now going by the name MacKenzie Scott, has been dispensing astonishingly large sums of money very fast, giving it to worthy causes, although not as fast as she has been making it as a holder of stock in her ex’s company. Driven by the increasing centrality of online shopping to contemporary life, its price has been climbing. There are many fine writers of literary fiction, maybe too many—too many to pay close attention to, anyway—but only one world’s richest lady. 

But the weird disjunction between the subtleties of literary fiction and the garishness of contemporary capitalism and popular culture might be the point. The rise of Amazon is the most significant novelty in recent literary history, representing an attempt to reforge contemporary literary life as an adjunct to online retail. On the one hand, Amazon is nothing if not a “literary” company, a vast engine for the production and circulation of stories. It started as a bookstore and has remained committed ever since to facilitating our access to fiction in various ways. On the other hand, the epic inflection it gives to storytelling could hardly be more distinct from the subtle dignities and delights of literary fiction of the sort written by MacKenzie Bezos. 

It was she who, according to legend, took the wheel as the couple drove across the country from New York to Seattle to start something new, leaving her husband free to tap away at spreadsheets on his laptop screen in the passenger seat. If this presents an image of Jeff as the author of Amazon in an almost literal sense, it surely mattered—mattered a lot—that his idea for an online bookstore was fleshed out while living with an actual author of books or aspiring one. “Writing is really all I’ve ever wanted to do,” she said upon the occasion of the publication of her first novel in 2005. By this time Amazon was already the great new force in book publishing, although it had yet to introduce the Kindle e-reader, the device that made a market for e-books. Neither had it hit upon perhaps its most dramatic intervention into literary history, Kindle Direct Publishing, the free-to-use platform by whose means untold numbers of aspiring authors have found their way into circulation, some of them finding real success. It had not yet purchased the book-centric social media site Goodreads, or Audible.com, or founded any of the sixteen more or less traditional publishing imprints it now runs out of Seattle.

That self-published writers have succeeded mostly by producing the aforementioned forthrightly generic varieties of fiction, and not literary fiction, is part of this story. Romance, mystery, fantasy, horror, science fiction—these are the genres at the heart of Amazon’s advance upon contemporary literary life. They come at readers promising not fresh observations of the intricacies of real human relationships—although they sometimes do that, by the way—but compellingly improbable if in most ways highly familiar plots. 

In one recent self-published success, a man awakens to find he has been downloaded into a video game. Rallying himself surprisingly quickly, he lives his version of The Lord of the Rings, but now with a tabulation of various game statistics appearing in his mind’s eye. In another, a young woman is gifted with the power of prophecy, making her a target of the darkly authoritarian Guild. Run, girl, run! In still another, a woman has a job as a “secret shopper,” testing the level of customer service at various retail stores, stumbling into a love affair with the impossibly handsome billionaire who owns them all. Then there are the zombies. There are as many moderately successful self-published zombie novels as there are zombies in any given zombie novel—hundreds of them. Whether dropping from the air into the Kindle or other device, or showing up on the doorstep in a flat brown box, these are the works that Amazon’s customers demand in largest numbers and which it is happy to supply.

The Testing of Luther Albright is nothing like them, though no doubt it, too, has been delivered to doorsteps by Amazon on occasion. What I find fascinating is how the traces of genre fiction are visible in the novel all the same, if only under the mark of negation. Told in the first person, it recounts the strained but loving relationship of a repressed WASP father to his wife and son. He is a successful civil engineer in Sacramento, a designer of dams, and has built the family home with his own hands. Leaning perhaps too heavily into the analogy between the structural soundness of buildings and of family relationships, the novel has an ominously procedural, even forensic quality, reflecting the quality of mind of the man who narrates it. Luther is not a negligent father or husband, just a painfully self-conscious and overly careful one, so much so that he might be creating the cracks in the foundation of his life it was his whole purpose to avoid. 

But no dam breaks and nothing ever crashes to the ground. 

Link to the rest at The Paris Review

Publishers, Amazon Move to Dismiss Booksellers’ Antitrust Suit

From Publishers Weekly:

In separate motions this week, Amazon and the Big Five publishers asked a federal court to dismiss the latest iteration of a potential class-action price-fixing claim filed against them on behalf of indie booksellers.

According to court filings, the booksellers’ Amended Complaint, which was filed in July, accuses Amazon and the publishers of illegal price discrimination under the Robinson-Patman Act. But in their motions to dismiss, both Amazon and the publishers insist there is no illegal agreement to fix or otherwise restrain prices, and that the amended complaint is legally deficient and must be tossed.

“The Complaint recites that Amazon is a leading book retailer, takes issue with ordinary price competition, and tries to illogically and conclusorily claim that Publisher Defendants conspired with each other and with Amazon to confer a monopoly on Amazon, despite Publisher Defendants resisting Amazon’s growing position in the market for decades,” reads the publishers motion to dismiss. “This is simply not plausible. After realizing its originally pled Sherman Act conspiracy claims had no basis, Plaintiff tried to repackage them in its Complaint and bolster them with a price discrimination claim under the Robinson-Patman Act. The Complaint, however, is fatally deficient under either statute and must be dismissed.”

In its motion to dismiss, Amazon lawyers also insist that there is no conspiracy with the publishers, no evidence of illegal collusion, and that its bargaining for lower print book prices is simply good business—and good for consumers.

“Bargaining between buyers and sellers is one of the most commonplace, precompetitive actions that can occur in any market,” the Amazon brief states. “As the Supreme Court has stressed repeatedly, it would do great damage to competition and consumers alike if the [Robinson-Patman Act] were misconstrued as having outlawed competitive bargaining.”

The suit was first filed in March, 2021, when Evanston, Ill.-based Indie bookseller Bookends & Beginnings teamed up with the law firm currently leading a sprawling class action price-fixing suit against Amazon and the Big Five publishers in the e-book market to file an antitrust lawsuit on behalf of a potential class of booksellers accusing Amazon and the Big Five publishers (Hachette, HarperCollins, Macmillan, Simon & Schuster, and Penguin Random House) of a conspiracy to restrain price competition in the retail and online print trade book market.

Similar to the claims made in the in ongoing e-book price-fixing case, the initial complaint turned on Amazon’s use of Most Favored Nation clauses in its contracts with the Big Five publishers, which, lawyers for Hagens Berman claim, have “the intent and effect of controlling wholesale prices of print trade books and preventing competition with Amazon in the retail sale of print trade books.”

But in their motion to dismiss, Amazon lawyers note that the factual basis for much of the booksellers’ initial complaint—the use of MFN clauses—simply does not exist. And, Amazon lawyers insist, the price discrimination claims in the amended complaint are ill-conceived.

“The premise of Plaintiff’s Complaint was that [the use of MFN] clauses prevented other retailers from competing to ‘gain market share’ by negotiating better wholesale prices for themselves,” the Amazon motion notes. “Plaintiff withdrew its Complaint after Defendants demonstrated that there was no factual basis for Plaintiff’s core allegation: those agreements do not and never did contain any such MFN clauses. Rather than dismiss its claims, however, Plaintiff pivoted dramatically to allege effectively the opposite theory, that Amazon violated [The Robinson-Patman Act]…by negotiating for discounted wholesale prices and passing those savings along to consumers by charging ‘comparatively lower retail book prices’ to improve its market position…Plaintiffs new theory, in other words, attacks the very essence of robust and healthy competition that the antitrust laws overwhelmingly seek to promote. Plaintiff’s Amended Complaint is baseless and should be dismissed.”

Link to the rest at Publishers Weekly

The Publishing Ecosystem in the Digital Era

From The Los Angeles Review of Books:

IN 1995, I WENT to work as a writer and editor for Book World, the then-standalone book-review section of The Washington Post. I left a decade later, two years before Amazon released the Kindle ebook reader. By then, mainstream news outlets like the Post were on the ropes, battered by what sociologist John B. Thompson, in Book Wars, calls “the digital revolution” and its erosion of print subscriptions and advertising revenue. The idea that a serious newspaper had to have a separate book-review section seems quaint now. Aside from The New York Times Book Review, most of Book World’s competitors have faded into legend, like the elves departing from Middle-earth at the end of The Lord of the Rings. Their age has ended, though the age of the book has not.

Nobody arrives better equipped than Thompson to map how the publishing ecosystem has persisted and morphed in the digital environment. An emeritus professor of sociology at the University of Cambridge and emeritus fellow at Jesus College, Cambridge, Thompson conducts his latest field survey of publishing through a rigorous combination of data analysis and in-depth interviews. Book Wars comes stuffed with graphs and tables as well as detailed anecdotes. The data component can get wearisome for a reader not hip-deep in the business, but it’s invaluable to have such thorough documentation of the digital publishing multiverse.

. . . .

One big question animates Thompson’s investigation: “So what happens when the oldest of our media industries collides with the great technological revolution of our time?” That sounds like hyperbole — book publishing hasn’t exactly stood still since Gutenberg. A lot happens in 500 years, even without computers. But for an industry built on the time-tested format of print books, the internet understandably looked and felt like an existential threat as well as an opportunity.

Early on in his study, Thompson neatly evokes the fear that accompanied the advent of ebooks. The shift to digital formats had already eviscerated the music industry; no wonder publishers felt queasy. As Thompson writes, “Were books heading in the same direction as CDs and vinyl LPs — on a precipitous downward slope and likely to be eclipsed by digital downloads? Was this the beginning of the end of the physical book?” That question has been asked over and over again for decades now, and the answer remains an emphatic No. (Note to pundits: Please resist the urge to write more “Print isn’t dead!” hot takes.) But publishers didn’t know that in the early digital days.

The words “revolution” and “disruption” get thrown around so often that they’ve lost their punch, but Thompson justifies his use of them here. He recalls the “dizzying growth” of digital books beginning in 2008, “the first full year of the Kindle.” That year alone, ebook sales for US trade titles added up to $69 million; by 2012, they had ballooned to $1.5 billion, “a 22-fold increase in just four years.”

Print, as usual, refused to be superseded. Despite their early boom, ebooks didn’t cannibalize the print market. Thompson uses data from the Association of American Publishers to show that ebooks plateaued at 23 to 24 percent of total book sales in the 2012–’14 period, then slipped to about 15 percent in 2017–’18. Print books, on the other hand, continue to account for the lion’s share of sales, with a low point of about 75 percent in 2012–’14, bouncing back to 80­ to 85 percent of total sales in 2015–’16. (Thompson’s study stops before the 2020–’21 pandemic, but print sales have for the most part been strong in the COVID-19 era.)

For some high-consumption genres, like romance, the ebook format turned out to be a match made in heaven; Thompson notes that romance “outperforms every other category by a significant margin.” But readers in most genres have grown used to choosing among formats, and traditional publishers have for the most part proved able and willing to incorporate those formats into their catalogs. That’s a net gain both for consumer choice and for broader access to books.

. . . .

Thompson quotes an anonymous trade-publishing CEO: “The power of Amazon is the single biggest issue in publishing.”

It’s easy to see why. With its vast market reach and unprecedented access to customer data, Amazon has made itself indispensable to publishers, who rely on it both to drive sales (often at painfully deep discounts) and to connect with readers. For many of us, if a book’s not available on Amazon, it might as well not exist. “Given Amazon’s dominant position as a retailer of both print and ebooks and its large stock of information capital, publishers increasingly find themselves locked in a Faustian pact with their largest customer,” Thompson writes.

That pact has proven hard to break. “Today, Amazon accounts for around 45 percent of all print book sales in the US and more than 75 percent of all ebook unit sales, and for many publishers, around half — in some cases, more — of their sales are accounted for by a single customer, Amazon,” Thompson points out. That’s staggering.

Does Amazon care about books? Not in the way that publishers, authors, and readers do, but that doesn’t change the power dynamic. Amazon derives its power from market share, yes, but also from what Thompson calls “information capital” — namely the data it collects about its customers. That gives it an enormous advantage over publishers, whose traditional business approach prioritizes creative content and relationships with authors and booksellers.

Workarounds to Amazon exist, though not yet at scale. Just as authors have learned to connect with readers via email newsletters and social media, so have publishers been experimenting with direct outreach via digital channels. Email feels almost quaint, but done well it remains a simple and effective way to reach a target audience. Selling directly to readers means publishers can avoid the discounts and terms imposed on them by Amazon and other distributors.

. . . .

Authors can now sidestep literary gatekeepers, such as agents and acquiring editors, and build successful careers with the help of self-publishing platforms and outlets that didn’t exist 20 or even 10 years ago. Self-publishing has become respectable; we’ve traveled a long way from the days when book review editors wrote off self-published books as vanity press projects. Newspaper book sections have mostly vanished, but book commentary pops up all over the internet, in serious review outlets like this one and in the feeds of Instagram and TikTok influencers. It’s a #bookstagram as well as an NYTBR world now. To me, that feels like a win for books, authors, and readers.

. . . .

Some authors hit the big time in terms of sales and readers without relying on a traditional publisher. Thompson returns several times to the example of the software engineer-turned-writer Andy Weir, whose hit book The Martian (2011) got its start as serialized chapters published on his blog and delivered to readers via newsletter. (Newsletters represent another digital-publishing trend unlikely to disappear anytime soon.) “The astonishing success of The Martian — from blog to bestseller — epitomizes the paradox of the digital revolution in publishing: unprecedented new opportunities are opened up, both for individuals and for organizations, while beneath the surface the tectonic plates of the industry are shifting,” Thompson writes.

Link to the rest at The Los Angeles Review of Books

Amazon Dangles a New Perk in Fight for U.S. Workers: Free Bachelor’s Degrees

From The Wall Street Journal:

The battle for hourly workers is escalating beyond minimum wage across the U.S., as retailers, restaurant chains, garbage haulers and meat processors increasingly dangle the prospect of a free college education as a way to lure and retain staff.

Amazon.com Inc. on Thursday plans to announce that it is expanding its educational benefits by offering more than 750,000 U.S. hourly employees the chance to enroll in a fully paid bachelor’s degree program after 90 days of employment. The e-commerce giant says employees will be eligible to get degrees through educational institutions nationwide.

Amazon is trying to attract job seekers in a tight labor market and reduce turnover among some hourly workers. The company has hired 400,000 employees during the pandemic, but it is looking to bring on tens of thousands of additional hourly staffers to work in its fulfillment centers and delivery network over the coming months. Employees working as little as 20 hours a week will be eligible for the college benefit, though Amazon will pay 50% of the college costs for part-time staffers.

“Career progression is the new minimum wage,” said Ardine Williams, a vice president of workforce development at Amazon, who notes employer-funded training can help people prepare for a career that interests them. “Most adult learners don’t have the luxury of quitting their jobs and going to school full-time.”

The stepped-up perks also reflect what executives say is a reality across the corporate sphere: Even $15 an hour, Amazon’s base wage, is no longer enough to attract many workers. As more employers and cities have raised minimum wages, large companies have aimed to differentiate themselves through additional benefits, such as greater time off, more reliable scheduling, access to emergency child care and, increasingly, a path to a broader education and new skills.

Many of America’s biggest companies strengthened educational initiatives this year, or rolled out programs essentially matching the benefits offered by their competitors.

Walmart Inc., one of Amazon’s chief rivals, in July said it would fully subsidize college tuition and books for 1.5 million part-time and full-time employees in the U.S., dropping an earlier requirement that employees pay a $1 daily fee toward their education. Walmart employees can enroll in the program on their first day of employment. The retailer has expanded the number of educational partners over time, adding Johnson & Wales University and the University of Arizona, among others, this summer.

Link to the rest at The Wall Street Journal (This should be a free link, but if it doesn’t work, PG apologizes for the paywall, but hasn’t figured out a way around it.)

PG has become increasingly concerned about inflation hitting the US economy with so much government spending, current and proposed.

The rationale for this spending is to help the economy recover from the effects of the Covid shutdowns, but PG is worried about overheating the economy. For him, the challenges Amazon, Walmart and others are having with recruiting at minimum wage is an indicator of inflation. Additionally, he understands that real estate and auto prices (both new and used) have also experienced significant increases.

The last period of major inflation in the US was in th3 1980’s, about forty years ago. This means that the only adults who actually experienced this inflationary period is in their 60’s. He worries that those in their 40’s making government economic policy have only a theoretical understanding about how damaging inflation can be to an economy and to individuals trying to deal with this serious impact on their finances.