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.

Really?

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 Profit Triples as Sales Show Resilience Leading Into Holidays

From The Wall Street Journal:

Amazon.com said profit tripled to nearly $10 billion from July to September as strong sales in its cloud-computing, advertising and retail units helped the company continue its rebound from postpandemic lows.

Chief Executive Andy Jassy said the company would reap tens of billions of dollars in revenue in the next several years as customers turn to generative AI opportunities available within its cloud-computing business, known as Amazon Web Services, or AWS. Business customers are likely to be less cautious with their spending, he said. 

“There’s so much more to provide,” Jassy said. “It’s going be a long time before we run out of services.” He noted that Amazon has seen a positive reaction to its AI platform, named Bedrock.

The company’s revenue increased by 13% to $143.1 billion for its third quarter, beating Wall Street expectations. Profit was $9.9 billion, more than triple the result from the same period last year. Amazon signaled net sales would be between $160 billion to $167 billion in its fourth quarter. Its shares rose by more than 5% in after-hours trading Thursday. 

Amazon has been trying to engineer a rebound in its core e-commerce business following a slowdown after pandemic-induced heights. The company has reined in costs across its North America unit, slashing roughly 27,000 corporate jobs and streamlining its operations following a cost-cutting review led by Jassy. It has also said it saved costs through an overhaul of its delivery operations meant to place packages closer to customers.

. . . .

While Amazon has tried to boost growth on its retail side, its cloud-computing business has seen less demand in the past year as corporate clients have looked to curtail their spending because of economic uncertainty. The unit has historically accounted for a large portion of Amazon’s profit. Sales in Amazon’s cloud business rose 12% to about $23 billion in the third quarter. Revenue in Amazon’s advertising segment, which has become a major business at the company, increased by 26% to about $12 billion, beating expectations.

The company has tried to promote its efforts in artificial intelligence, which it has largely done through AWS, as it competes with Microsoft and Google. Amazon in September said it had agreed to invest up to $4 billion in artificial-intelligence company Anthropic. AI startups spend much of their money on cloud-computing costs. AWS Chief Executive Adam Selipsky has said the unit’s strategy is to give its corporate customers who want to build AI features as much flexibility as possible.

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

USA – Bookstore Sales Fell 17% in August. Ebooks fell, or rose, depending on where you look.

From The New Publishing Standard:

Publishers Weekly carries news of a US census Bureau report showing that US bookstore sales “dropped 17.3% in August, falling to $872 million.”

Per PW, “traditionally, August and January are two of biggest sales months for bookstores, since they incorporate the rush period at college campuses.

Jim Milliot notes, “For instance, Barnes & Noble Education, one of the nation’s largest college store chains, is making a major effort this semester to promote its First Day Complete program, which provides students with all the course materials they need—mostly digital—which are included as a fee or as part of tuition; the strategy has resulted in the decline of print textbooks.”

Thus far, it is not clear just how much college books shifting to digital are contributing to the 17% August decline, but the overall message is clear – print sales in bricks & mortar stores slumped in August compared to last year.

At the same time, the AAP BookStat reports book sales overall (inc. online) up 8.5% in August, with PW’s John Maher running with the headline “Publishing Industry Sales Rebounded in August“, but noting ebooks were down 5.4%.

Important to remember here that, while print sales, easily tracked by ISBNs, cover pretty much all the market, the ebook numbers tell only a partial story.

Contrast the 5.4% AAP-recorded decline in ebook sales against the 10% rise, year on year, in the Kindle Unlimited pot pay-out for August.

August 2023 saw Amazon pay out $49.6 million in royalties, mostly to self-publishers and small presses, all untracked by the AAP.

(PG note: This report appears to include only Kindle Unlimited payments, not the almost certainly higher total for royalties on sales of indie authors who don’t participate in KU or participate with some books, but not all books.)

Link to the rest at The New Publishing Standard

What is Amazon’s [redacted] ‘Project Nessie’ algorithm?

From TechCrunch:

The FTC’s lawsuit against Amazon alleging anti-competitive practices is largely full of things we already knew in a general sense: price hikes, pressure to use Amazon fulfillment and so on. But then we get to a sea of redactions and the mysterious “Project Nessie.” What is it, and could it possibly be as alarming as the unredacted sections make it sound?

The project, product or process is referred to more than a dozen times in the complaint filed by the FTC. And it’s one of those situations where the redactions probably make it sound scarier than it actually is.

Probably.

The first reference comes on page 6:

Amazon has also [redacted] through a [redacted] operation called “Project Nessie.” [redacted] Amazon’s Project Nessie has already extracted over [redacted] from American households.

What is it extracting? Money? Data? Something quantifiable, or else the document would not say “over.” Though I wouldn’t put it past Amazon, the context does not suggest anything physical or private, like video or biometrics.

An Amazon blog post from 2018 spotted by GeekWire describes Nessie as “a system used to monitor spikes or trends on Amazon.com.” Much of the timeline in the lawsuit takes place since then, however, so this definition (such as it is) may no longer be accurate, if it ever was.

Then, on page 11, among discussions of “anti-discounting” tactics, we have:

Amazon has deemed Project Nessie [redacted]: it has generated more than [redacted] in excess profit for Amazon.

In addition to overcharging its customers…

So Nessie does result in profit, but not necessarily directly, even though the last sentence implies it.

A bit of redaction sleuthing: An earlier sentence describes Nessie as a “[redacted] algorithm,” with the blackout text composed of no more than five or six characters (and note, “a” not “an”). Price? Profit? Sales? “Search” would just about fit too.

Last in Nessie references in the lawsuit is the whole section 7, which is four pages dedicated purely to Project Nessie.

Project Nessie is an algorithm [redacted]. Aware that this scheme belies its public claim that it “seek[s] to be Earth’s most customer-centric company,” [redacted].

How distressing. It later refers to “Part VI.A.3, above” in the middle of a redacted paragraph; the section is about how “Amazon maintains its monopolies by suppressing price competition with its first-party anti-discounting algorithm.”

Amazon recognizes the importance of maintaining the perception that it has lower prices than competitors. Behind closed doors, however, Amazon executives actively [redacted].

Instead, [redacted] “prices will go up.”

So what are we to make of this mysterious Project Nessie? It’s a highly secret internal algorithm and associated operation that makes them a lot of money, likely by manipulating price or search.

Are those small, seemingly arbitrary changes to price we see on items — up by a few cents today, down by a few tomorrow — Project Nessie in action, increasing or decreasing the price as needed based on the immense amount of sales data they have access to? This seems the most likely explanation, and the ability to dictate price based on what a customer is likely to pay would be both highly profitable and fit the description of “belying” the customer-first narrative.

Or could it be that search — which we know Amazon heavily manipulates in favor of certain sellers — is also being juiced in some unknown way? It could also be something else entirely, more arcane or technical.

One thing is sure: Amazon doesn’t like talking about it. (I contacted the company for comment and have not heard back yet.)

Will we ever find out what it is? It seems very unlikely that this entire lawsuit and trial will not shed at least a little light on it.

Link to the rest at TechCrunch

Book Business Applauds Government Lawsuit Against Amazon

From Publishers Weekly:

The Federal Trade Commission, supported by 17 state attorneys general, finally filed its long-awaited antitrust lawsuit against Amazon yesterday. In a 172-page complaint, the government alleged that the e-tailer “uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power.” The use of that power, the government continued, allows Amazon “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 immediate industry reaction to the news of the suit was uniform: “What took so long?” Or, in the words of Melville House publisher Dennis Johnson, that it was “about ******** time.” An industry lawyer, who wished to remain anonymous, gave a more nuanced view in wondering why it took the government so long to act, pointing to the infamous buy button case in 2010, when Amazon pulled Macmillan’s buy buttons in a dispute over e-book terms.

Even with Amazon’s dominant position over the sale of e-books and print books, the suit doesn’t mention books, which, of course, were Amazon’s first line of business. The suit does, however, highlight Amazon’s hold over the companies who use its online marketplace to sell a range of products, including books, to consumers.

Jed Lyons, CEO of Rowman & Littlefield, was skeptical about how the case will play out, pointing to the government’s “sketchy” track record in lawsuits against major corporations. But even though the FTC lawsuit is more about third party sellers, Lyons said, if “it shuts down unauthorized sellers of new books, which we know are not new books, then that will be a win for book publishers.”

Independent booksellers, which were the first physical retailers impacted by Amazon and the steep discounting on books it employed to attract customers, praised the FTC’s long-awaited action. The lawsuit, said ABA CEO Allison Hill, “is good news for indie bookstores and good news for all small business. ABA applauds the FTC and states’ effort to release Amazon’s stranglehold, and we look forward to the transparency this lawsuit will provide into Amazon’s business practices.”

. . . .

Other industry groups, including the AAP and Authors Guild, have also long advocated that the government investigate many of Amazon’s practices.

No bookseller has been more active in attacking Amazon’s book practices than Danny Caine, owner of the Raven Book Store in Lawrence, Kans., and author of How to Resist Amazon and Why. Caine acknowledged that, “while the suit doesn’t go after Amazon’s book business in particular, it can still do a lot to level the playing field. For one thing, it can prove that Amazon is acting illegally or anti-competitively via tactics like preferencing its own products, placing unfair pressure on sellers who list their products for lower prices elsewhere, and forcing sellers and customers onto their Prime platform.”

The head of one independent publisher, who wished to remain anonymous, said that if the government prevails, “it could be very beneficial to publishers.” She then laid out the many challenges publishers face in dealing with Amazon: “I think [the suit] could affect tactics around the negotiation of discounts and fees, etc., with publishers. This would also be a good thing. The negotiations over the years between publishers and Amazon have been brutal. At first, Amazon got big discounts since they were buying non-returnable. Then, predictably, they started returning books and kept the discounts.”

She continued: “Publishers were simply too fearful and too powerless to stand up to their biggest customer. And then Amazon started added all manner of fees, effectively increasing their discount even further. To the extent that Amazon was able to discount books to lure customers away from other booksellers, publishers were effectively subsidizing Amazon’s growth and dominance while watching their margins erode.”

Melville’s Johnson made many of the same points, lamenting that the government’s lack of action up until now and allowing Amazon to use books as a “loss leader” got the company to where it is today. The government further strengthened Amazon’s hand, Johnson maintained, when it sued the major publishers over their e-book pricing policies. That decision “really pounded Amazon’s suppliers, and thus altered the business of making and selling books, probably irrevocably.”

Link to the rest at Publishers Weekly

Here are a few questions PG would like to put to the traditional publishers celebrating the FTC’s suit against Amazon:

  1. Do you really want your biggest customer to stop selling your books? That’s an option for Amazon. Traditionally-published books are a minuscule part of Amazon’s total sales, a rounding error.
  2. If Amazon decided to shut down its book business on a temporary or permanent basis, would Americans buy more or fewer books? Would Americans change their behavior and travel to physical bookstores once again (assuming they live within a reasonable distance from a remaining physical bookstore)?
  3. Do you really not care about readers who live a long way from a physical bookstore? Have you ever even visited North or South Dakota? Nebraska? Wyoming? New Mexico? Idaho? Nevada (outside of Las Vegas)? Kansas?
  4. Do you understand that the internet provides endless reading material at no charge to readers, reading material that doesn’t include commercial books?
  5. Do you really think your books are not competing for reader attention against free reading material on the internet?
  6. Do you understand how many more Americans log on to the internet every day instead of visiting a physical store of any sort, let alone a book store?

Amazon’s latest actions against fake review brokers: 2 fraudsters found guilty of facilitating fake reviews in Amazon’s store

From Amazon:

Two individual fake review brokers were found guilty of illegal business operations intended to deceive Amazon customers and harm Amazon selling partners through the facilitation of fake reviews. These verdicts are the result of local law enforcement’s investigation and a criminal referral supported by Amazon.

From March 2021 to March 2022, the China-based defendants used third-party messaging applications to advertise and sell fake reviews to bad actors operating Amazon selling accounts. In exchange for a fee, the defendants left fake positive reviews to boost a bad actor’s product ranking, or fake negative reviews to lower the ranking of a competitor’s product.

Following the criminal referral, local law enforcement conducted an investigation and confirmed the review brokers’ illicit activities in Amazon’s U.S. store. The defendants were officially sentenced to two-and-a-half years in prison and three years of probation in China, marking Amazon’s second criminal judgement of this kind.

“Amazon is pleased to see that these fraudsters are being held accountable for their actions,” said David Montague, Amazon’s vice president of Selling Partner Risk. “The verdicts are a testament to the partnership of local officials in bringing down those who attempt to deceive our customers and harm our selling partners. We look forward to continuing to partner with law enforcement toward the mutual goal of bringing fake review brokers to justice.”

Link to the rest at Amazon

The most impressive part of the OP to PG is that Amazon relied upon local Chinese law enforcement to handle the arrest and whatever trial procedure China uses to punish the fake review scammers.

FTC Sues Amazon for Illegally Maintaining Monopoly Power

Today’s Press Release from The Federal Trade Commission:

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.

NOTE: The Commission issues a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.

Link to the rest at The Federal Trade Commission

PG will spare visitors to TPV by not embedding the entire 172-page complaint.

If you need a bigger US v. Zon fix, the complaint is available for download at the FTC link above.

FTC Sues Amazon, Alleging Illegal Online-Marketplace Monopoly

From The Wall Street Journal:

The Federal Trade Commission and 17 states on Tuesday sued Amazon AMZN -4.35%decrease; red down pointing triangle, alleging the online retailer illegally wields monopoly power that keeps prices artificially high, locks sellers into its platform and harms its rivals.

The FTC’s lawsuit, filed in Seattle federal court, marks a milestone in the Biden administration’s aggressive approach to enforcing antitrust laws and has been anticipated for months.

The agency’s chair, Lina Khan, is a longtime critic of Amazon who wrote in the Yale Law Journal in 2017 that earlier generations of competition cops and courts abandoned the law’s concerns over conglomerates such as Amazon. She has had trouble convincing courts of her antitrust views, however, having earlier lost cases against both Microsoft and Meta Platforms.

The federal agency and the states alleged that Amazon violated antitrust laws by using anti-discounting measures that punished merchants for offering lower prices elsewhere. The government also said sellers on Amazon were compelled to use its logistics service if they want their goods to appear in Amazon Prime, the subscription program whose perks include faster shipping times.

The FTC said sellers feel they must use Amazon’s services such as advertising to be successful on the platform. Between being paid for its logistics program, advertising and other services, “Amazon now takes one of every $2 that a seller makes,” Khan said at a briefing with the media Tuesday.

“The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court,” said David Zapolsky, Amazon’s general counsel and head of public policy. “The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store.”

The federal agency’s claim that Amazon prevents vendors from offering lower prices on competing websites echoes a claim made in a suit brought last year by the state of California.

“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,” Khan said in a statement.

The FTC said it is seeking a court order “that would prohibit Amazon from engaging in its unlawful conduct and pry loose Amazon’s monopolistic control to restore competition.” The lawsuit doesn’t say whether the FTC will ask the court to break up the company, and Khan declined in a briefing with reporters to say whether it would.

“The FTC doesn’t have a particularly good history of bringing monopolization cases,” said Rick Rule, who headed the Justice Department’s antitrust division during the Reagan administration. “Most of the last ones that they brought were in the ’60s and ‘70s and lasted into the ‘80s, and there were various theories but they never went anywhere.”

. . . .

Until recently, it has been rare for federal agencies to file monopoly lawsuits seeking to break up companies accused of anticompetitive behavior. While the FTC and Justice Department regularly seek to block what they see as illegal acquisitions, the government doesn’t often move against companies for anticompetitive behavior unrelated to acquisitions.

. . . .

The FTC’s lawsuit alleges that Amazon, despite its reputation for low prices and convenient delivery among many consumers, steadily grew from an online bookseller into a gatekeeper of online commerce that used its size to squash any budding rivals.

The Justice Department, in its lawsuit over Google search, similarly alleged that Alphabet used its scale to thwart competition. In that case, the government said Google used restrictive agreements with Apple and others to be the default search provider. That enhanced Google’s reach while starving other search engines of the data they needed to improve, the DOJ alleges.

Link to the rest at The Wall Street Journal

On a list of the many things PG is not, an antitrust expert or a political analyst would be among the most prominent.

That said, he wonders what the PR issues will be in the Justice Department suit. Amazon has about 230 million customers in the U.S. (out of a total adult population of about 260 million.)

Amazon is unlikely to do anything as a company to stir up the populace, but PG would be surprised if various groups of Amazon customers don’t arise to encourage their elected representatives to criticize the Amazon lawsuit.

Amazon also has 1.1 million sellers in the U.S. Per PG’s quick and dirty online research, KDP has over 1 million authors that publish through the platform. Informed estimates of total royalties paid by KDP to authors in 2022 place the amount as over $500 million.

In a popularity contest, Amazon would crush the Federal Trade Commission and, likely, the entire government of the United States.

Antitrust counsel representing Amazon will take a firm grip on official comments about the lawsuit coming from Amazon and its executives.

However, PG expects the formal and informal web of Amazon sellers will get vocal about this once the word gets around. Ditto for authors who earn most of their royalties from Amazon sales.

Antitrust lawsuits against large, well-known companies in the United States are relatively rare. In 2022, the Justice Department filed only 242 antitrust lawsuits, mostly involving companies/parties even the well-read group of people who visit TPV are unlikely to recognize.

PG is going to follow the progress of this lawsuit from afar and will provide whatever reports he believes would interest visitors to TPV.

Amazon’s Latest Actions Against Fake Review Brokers: 2 Fraudsters Found Guilty Of Facilitating Fake Reviews In Amazon’s Store

From Public.:

Two individual fake review brokers were found guilty of illegal business operations intended to deceive Amazon customers and harm Amazon selling partners through the facilitation of fake reviews. These verdicts are the result of local law enforcement’s investigation and a criminal referral supported by Amazon.

From March 2021 to March 2022, the China-based defendants used third-party messaging applications to advertise and sell fake reviews to bad actors operating Amazon selling accounts. In exchange for a fee, the defendants left fake positive reviews to boost a bad actor’s product ranking, or fake negative reviews to lower the ranking of a competitor’s product.

Following the criminal referral, local law enforcement conducted an investigation and confirmed the review brokers’ illicit activities in Amazon’s U.S. store. The defendants were officially sentenced to two-and-a-half years in prison and three years of probation in China, marking Amazon’s second criminal judgement of this kind.

The Counterfeit Crimes Unit is a global team dedicated to partnering with law enforcement, brands, and other stakeholders to disrupt counterfeiters and their networks.

“Amazon is pleased to see that these fraudsters are being held accountable for their actions,” said David Montague, Amazon’s vice president of Selling Partner Risk. “The verdicts are a testament to the partnership of local officials in bringing down those who attempt to deceive our customers and harm our selling partners. We look forward to continuing to partner with law enforcement toward the mutual goal of bringing fake review brokers to justice.

“Amazon pioneered online customer reviews 25 years ago, and we are committed to ensuring that our reviews remain a trustworthy, insightful resource for customers. Amazon will continue to protect customers, our selling partners, and our stores from fake reviews by investing in proactive tools to detect and stop fake reviews from appearing in our stores. As a result of continued investments, Amazon proactively blocked more than 200 million suspected fake reviews from our stores in 2022, and as of the end of August, we have taken legal action against 147 fraudsters across China, Europe, and the U.S.”

Link to the rest at Public.

Amazon is encouraging sellers to use AI-generated product listings

From engadget:

Amazon is launching a new AI tool that generates product listings for sellers. The feature uses a large language model (LLM) “trained on large amounts of data” to make it faster and simpler for vendors to describe their products. The company describes the tool as distilling the “significant work” of creating titles, bullet points and descriptions down to “just one step.”

Amazon says its Generative Listing Content tool only requires sellers to provide a brief product description in a few words or sentences. From there, it will “generate high-quality content for their review” — including a title, product description and bullet points — which sellers can peruse before refining or submitting as is. The company says many sellers have already tested the tool during the last few months, and their feedback indicates most of them use the generated content directly without revisions.

“These new capabilities will help sellers create high-quality listings with less effort and present customers with more complete, consistent, and engaging product information that will enhance their shopping experiences,” Amazon VP Mary Beth Westmoreland wrote today in an announcement blog post.

. . . .

“With our new generative AI models, we can infer, improve, and enrich product knowledge at an unprecedented scale and with dramatic improvement in quality, performance, and efficiency,” Robert Tekiela, Amazon VP of selection and catalog systems, wrote today. “Our models learn to infer product information through the diverse sources of information, latent knowledge, and logical reasoning that they learn. For example, they can infer a table is round if specifications list a diameter or infer the collar style of a shirt from its image.”

The new tool joins Amazon’s AI-generated review summaries, launched earlier this summer. That feature uses generative AI to train on a product’s reviews and spit out one-paragraph recaps, including clickable keywords. The company teases that it’s still getting started with incorporating generative AI into its storefront: “This is just the tip of the iceberg on how we plan to use AI to help improve the seller experience and help more sellers succeed.” CEO Andy Jassy said last month that, from now on, generative AI “is going to be at the heart of what we do.”

Link to the rest at engadget

Unlocking Amazon A+ Content for Books: The Ultimate Handbook

From The Book Designer:

Advantages of A+ Content for Books

Now, let’s dive into the irresistible advantages of Amazon A+ Content for your books. First and foremost, picture this: enhanced discoverability. In a digital sea teeming with books, A+ Content acts as your lighthouse, guiding potential readers toward your literary treasure. By showcasing your book’s unique features, be it stunning cover art or gripping excerpts, you make it more enticing and stand out among the vast competition. Think of it as your book’s red carpet moment, where readers can’t help but stop and take notice.

But that’s just the tip of the iceberg. A+ Content goes beyond mere visibility; it’s your key to higher conversion rates. When potential readers click on your listing, they’re not just met with a wall of text – they’re greeted with an immersive experience. This engagement factor can turn curious browsers into enthusiastic buyers. Furthermore, A+ Content lets you tell your book’s story like never before. You can weave in narratives about the inspiration behind your masterpiece or share behind-the-scenes glimpses of your creative journey. This personal touch establishes a deeper connection with your audience, turning readers into loyal fans. In this section, we’ll explore these advantages in detail, showcasing how A+ Content can be your secret weapon in the world of book publishing.

How to Access Amazon A+ Content in KDP

Accessing Amazon A+ Content in KDP is your ticket to transforming ordinary book listings into captivating showcases. Here’s a step-by-step guide to get you started:

1. Log into Your Amazon KDP Account: Begin by logging into your Amazon Kindle Direct Publishing (KDP) account. If you’re an author or publisher, you’re likely familiar with this platform.

2. Select Your Book: Once logged in, navigate to your bookshelf, where all your published titles are listed. Choose the book for which you want to create A+ Content.

3. Click on “Promote and Advertise”: Under your selected book, you’ll find the “Promote and Advertise” tab. Click on it to access the marketing and promotional options for your book.

4. Choose “A+ Content Manager”: In the “Promote and Advertise” section, you’ll find various promotional tools. Select “A+ Content Manager” to begin creating your A+ Content.

5. Start Creating Your A+ Content: Follow the on-screen prompts and templates to build your A+ Content. You can add images, descriptions, and other engaging elements to enhance your book listing. You can use tools like Canva to create graphics for your A+ Content.

6. Submit for Review: Once your A+ Content is ready, review it, and make any necessary adjustments. After ensuring everything looks perfect, submit it for Amazon’s review and approval.

7. Monitor Performance: Once approved, your A+ Content will go live on your book’s listing. Monitor its performance through Amazon’s analytics tools to gauge its impact on engagement and sales.

In just a few simple steps, you’ll have unlocked the potential of Amazon KDP A+ Content to transform your book listings into compelling showcases that captivate readers.

Link to the rest at The Book Designer

Booksellers Want Justice Department to Investigate Amazon

From BookRiot:

As the Federal Trade Commission moves towards what looks like a lawsuit against Amazon, several authors, booksellers, and anti-trust activists want Amazon’s bookselling to also be investigated.

The Authors Guild, the American Booksellers Association, and antitrust think tank Open Markets Institute sent a letter Wednesday to the Justice Department and the Federal Trade Commission requesting that they disrupt the monopoly on the book market that Amazon has.

The retail giant’s influence on the book world can’t be overstated — 40% of physical books sold in the U.S. are sold by Amazon, as are 80% of e-books sold. Amazon’s 2008 purchase of Audible has also helped it dominate the realm of audiobooks. The reason this is an issue for the world of publishing is that, for one, it has resulted in fewer books sold by physical bookstores across the country. And Amazon has a tendency to highlight well-known authors, making it even harder for other, lesser-known authors to get attention on their books.

The letter cites the importance of free-flowing ideas within a democracy as the reason why Amazon’s role as a bookseller should be looked into by the government, “The open access to the free flow of ideas is essential to a well-functioning democracy. The government has the responsibility to ensure that actors with oversized power cannot control or interfere with the open exchange of ideas.”

Link to the rest at BookRiot

PG suggests that it’s difficult to make a case that Amazon is harming consumers with its low prices and the huge variety of books on offer — far, far more than any physical bookstore can stock.

As far as ebooks are concerned, how many ebooks do the members of the American Booksellers Association sell each year and what is the price of those ebooks?

Does anyone know of any evidence that Amazon interferes with “access to the free flow of ideas” with its huge collection of print books, old and new, and ebooks, offered at lower prices than anyone else provides? As PG has mentioned before, being a large and successful business organization is not a violation of antitrust laws.

He further suggests that selling printed and ebooks from a stock far larger than any physical bookstore has for sale at significantly lower prices than the members of the American Booksellers Association routinely charge doesn’t hurt readers or other consumers in any measurable way.

Amazon Reverses Course on ‘Garbage Books’ After Public Uproar

From Decrypt:

When Professor Jane Friedman complained about books that she didn’t write being attributed to her on Monday, ecommerce giant Amazon initially said that it would not remove them. But after she took her case to Twitter, earning the backing of the Authors Guild, Amazon relented early this morning.

Friedman—a non-fiction writer, journalist, and educator—said Amazon had refused to remove the books even though they appeared to trade on her name and reputation as an author who has published how-to guides for other writers.

The “garbage books,” which Friedman says were probably churned out using generative AI, had the titles “Your Guide to Writing a Bestseller eBook on Amazon,” “Publishing Power: Navigating Amazon’s Kindle Direct Publishing,” and “Promote to Prosper: Strategies to Skyrocket Your eBook Sales on Amazon.”

When Friedman acknowledged that she could not prove that she owned the trademark on her own name, she said Amazon said it would leave the book up and for sale. But that stance changed late Monday night when the books began disappearing from Amazon’s website, and after the Authors Guild offered to step in on Friedman’s behalf.

“We have clear content guidelines governing which books can be listed for sale and promptly investigate any book when a concern is raised,” Amazon spokesperson Ashley Vanicek told Decrypt by email. “We welcome author feedback and work directly with authors to address any issues they raise and where we have made an error, we correct it.”

Other authors responding to Friedman’s tweet said the same thing had happened to them, and in some cases, the publisher of the fraudulent books did more than just use their names.

“Sorry you’re dealing with this,” author and poet Hattie Jean Hayes wrote. “I have had someone using my name to publish erotica on Amazon [Kindle Direct Publishing] for the last three years. It’s pretty clearly a targeted attack since they’ve used names of my (minor!) family members in the stories,” Hayes said. “Amazon/Kindle gave me the exact same answer.”

The Authors Guild said that its members could request the organization’s assistance in contacting Amazon’s senior management about fraudulent works.

“We’ve worked with Amazon on this issue in the past, and we will continue our conversations with them about advancing their efforts to keep up with the technology,” the Author’s Guild said in a statement shared with Decrypt. “Meanwhile, we encourage everyone to report these books that try to profit from your brand through Amazon’s complaint portal.”

Link to the rest at Decrypt

PG says Zon should police books that use an author’s name when they were written by someone other than that author. He understands that there are many people with the same names plus pen names have a long history in traditional literature. Legitimate authors named John Smith or Jane Smith will develop ways of distinguishing themselves from other authors with the same name.

Passing off a book as having been written by someone who writes good books when it is not written by that author means the fraudster is trying to sell a product under false pretenses. PG doubts that Amazon would run into no problems if it refused to sell such books to preserve its reputation as an honest online merchant. It is not in Amazon’s interest to sell junk.

PG has opined that the folks who run KDP are not the best managers of their business. He takes the OP as further evidence that Zon needs to pay more attention to management issues at KDP if for no other reason than to maintain the quality of Amazon’s brand name as a whole. Business organizations that sell goods or services have a lot to lose when customers have a bad experience with a purchase.

People who buy books on Amazon likely also purchase a whole lot of other goods from Amazon. From PG’s outsider view, it appears that Walmart is taking aim at Zon in the huge middle and lower-middle-class consumer goods market. PG has moved more than a few of his purchases of products that Amazon and Walmart both sell over to Walmart on the basis of some better prices and much faster delivery on items Walmart stocks in its nearby retail locations.

PG made a trip to his local Walmart to purchase some necessities for Casita PG a couple of days ago and was kicking himself while wandering around the large store wasting his time searching for products. He should have saved a lot of time by ordering online using Walmart’s version of Prime for free delivery of the goods to Casita PG’s front door, likely within a few hours.

Judge Finds Revived Amazon E-book Monopoly Suit Should Proceed

From Publishers Weekly:

For a second time in two years, a magistrate judge in New York has recommended that a consumer class action lawsuit accusing the Big Five publishers of colluding with Amazon to fix e-book prices should be dismissed. But while the judge recommended tossing the case against the publishers, the court found that monopolization and attempted monopolization claims against Amazon should proceed.

In a 59-page report, magistrate judge Valerie Figueredo found sufficient facts at the pleading stage to “plausibly allege that Amazon’s conduct has allowed it to charge supracompetitive commission fees, leading to reduced competition in the e-book platforms-transaction market and higher e-book prices for consumers.”

The case was first filed in the Southern District of New York on January 14, 2021, led by Hagens Berman (which was also the firm that sued Apple and five major publishers for colluding to fix e-book prices in 2011). It alleged that the Big Five publishers—Hachette Book Group, HarperCollins, Macmillan, Penguin Random House, and Simon & Schuster—were co-conspirators in a hub-and-spoke scheme with Amazon to suppress retail price competition and keep e-book prices artificially high. In March 2021, a second, associated suit accusing Amazon and the Big Five publishers of a conspiracy to restrain price competition in the retail and online print trade book markets was also filed.

But last year, after a marathon July 27, 2022 hearing, Figueredo recommended that the presiding judge in the case, Gregory Woods, toss both cases for lack of evidence. In two brief September 29, 2022 orders, Woods accepted Figeuredo’s “well-reasoned” and thorough reports, and dismissed the cases without prejudice, giving the plaintiffs a chance to file amended complaints.

Which they did. In a 125-page Second Consolidated Amended complaint filed last November, Hagens Berman revised and refiled their claims, including arguments that Amazon’s dominance in the e-book market enables it to “coerce” e-book publishers into “entering into contractual provisions that foreclose competition on price or product availability,” which ultimately harms consumers by keeping e-book prices artificially high. “In a but-for competitive market, Amazon could not earn such a supracompetitive profit without price or product availability,” which ultimately harms consumers by keeping e-book prices artificially high. “In a but-for competitive market, Amazon could not earn such a supracompetitive profit without losing sales to a competitor and experiencing reduced profits,” the amended complaint argues. “Yet Amazon has been able to both maintain its market share and extract its supracompetitive transaction fees by exercising its market power to block competition.”

In its defense, Amazon insists that its MFNs and other contract terms are standard and “not inherently anticompetitive,” and that there is no evidence the company’s conduct “had the effect of raising agency commissions to anticompetitive levels.” But that’s not a question to be resolved at the pleading stage, Figueredo noted, concluding that the plaintiffs “have adequately pled anticompetitive conduct to support their monopolization and attempted monopolization claims.”

Link to the rest at Publishers Weekly

FTC Sues Amazon Over ‘Manipulative’ Tactics Used to Enroll Millions in Prime

From The Wall Street Journal:

The Federal Trade Commission sued Amazon.com Wednesday, alleging the retail giant worked for years to enroll consumers without consent into Amazon Prime and made it difficult to cancel their subscriptions to the program.

The FTC’s complaint, filed in federal court in Seattle, alleged that Amazon has duped millions of consumers into enrolling in Amazon Prime, a $139 annual subscription service with more than 200 million members worldwide that has helped Amazon become an integral part of many American households’ shopping habits.

“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC Chair Lina Khan said.

The complaint, which is partially redacted, is the culmination of an investigation that began in March 2021. The FTC, a federal agency tasked with enforcing antitrust laws and consumer protection laws, seeks monetary civil penalties without providing a dollar amount.

An Amazon spokesman dismissed the FTC’s allegations as “false on the facts and the law.”

The complaint alleged that Amazon used “manipulative, coercive, or deceptive user interface designs known as dark patterns” to dupe users into automatically renewing Prime subscriptions.

“Amazon leadership slowed or rejected changes that would’ve made it easier for users to cancel Prime because those changes adversely affected Amazon’s bottom line,” the FTC added.

The FTC has been examining the use of dark patterns—a term for design tactics that prompt users into actions that benefit the company but not necessarily the user—in online commerce for several years.

The agency has been looking for cases in which companies entice consumers into subscriptions with misleading offers and then create obstacles for them to cancel payments. Vonage last year paid $100 million to settle FTC allegations that it imposed hurdles for customers to cancel the internet-based telephone service and charged unexpected termination fees.

For years, Amazon made it easy to enroll in Prime with one or two clicks, but created a “four-page, six-click, fifteen-option cancellation process” known internally as “the Iliad Flow,” the FTC said, in an apparent reference to Homer’s epic about the Trojan War. The agency said the “labyrinthine” procedure was designed to make it cumbersome and confusing for customers to cancel Prime.

Amazon revamped its Prime cancellation process for some subscribers in April, shortly before the FTC filed the case, according to the complaint. Amazon knew its policies were “legally indefensible,” the agency alleged.

“By design we make it clear and simple for customers to both sign up for or cancel their Prime membership,” he said. “We look forward to proving our case in court.”

Amazon said the FTC filed the lawsuit without allowing the company to explain to the agency’s three commissioners why it shouldn’t be sued, bypassing a step that is typically part of the process for companies facing an enforcement action.

. . . .

 Amazon has said that it had it more than 200 million paid Prime members worldwide at the end of 2020.

. . . .

About 72% of all U.S. households, or 96 million, have a paid Prime membership, according to recent estimates from market research firm Insider Intelligence.

. . . .

The FTC is separately preparing a potential antitrust lawsuit against Amazon to be filed in the coming months that could challenge an array of the tech giant’s business practices as anticompetitive, The Wall Street Journal reported in February.

Link to the rest at The Wall Street Journal

PG acknowledges that there is likely a political element influencing the Federal Trade Commission”s decision. President Biden, a Democrat, nominated the Chairman of the FTC.

But Amazon management lives and works in a Democratic party stronghold.

The last time a non-Democrat held the office of Seattle mayor was in 1990 when it elected an Independent candidate. The last time Seattle elected a Republican mayor was 1969.

PG understands similar party affiliation patterns extend into most of the Seattle suburbs as well.

Thus, PG suspects that most Amazon employees in middle and upper management are Democrats.

Per PG’s search for Amazon-originated campaign information, Jeff Bezos has donated only to candidates who were Democrats.

Opensecrets.org shows the Democrat candidates received about 5X the Amazon-originated political donations that Republican candidates during the 2020 elections.

The last time PG checked, a Democrat was occupying the White House and President Biden chose the Chairman of the Federal Trade Commission, which agency has filed this antitrust suit.

Evidently, political contributions originating from Amazon were not enough to keep the Feds from suing the Zon for antitrust violations.

Court to Hear Bids by Amazon, Publishers to Dismiss Revived Price Fixing Case

From Publisher’s Weekly:

It’s deja vu all over again: in a brief order this week, Magistrate judge Valerie Figueredo has set oral arguments for June 22 to hear motions from Amazon and the Big Five publishers to dismiss an amended civil lawsuit accusing them of an illegal conspiracy to fix e-book prices. The hearing comes some 10 months after Figueredo found insufficient evidence for the initial case to proceed, prompting a do-over.

The case was first filed in the Southern District of New York on January 14, 2021, led by firm Hagens Berman, the first firm to sue Apple and five major publishers for colluding to fix e-book prices in 2011. It alleges that the Big Five publishers—Hachette, HarperCollins, Macmillan, Penguin Random House, and Simon & Schuster—are co-conspirators in a hub-and-spoke scheme, with Amazon to suppress retail price competition and keep e-book prices artificially high. In March 2021, a second, associated suit accusing Amazon and the Big Five publishers of a conspiracy to restrain price competition in the retail and online print trade book markets was also filed. That case was also dismissed, amended, and refiled last year, though it is not clear whether the June 22 hearing will include the motions to dismiss that case as well.

From the outset, Amazon and the publishers have insisted the conspiracy claims are “implausible” and unsupported by any evidence. And after a marathon July 27, 2022 hearing, Figueredo agreed, recommending that presiding judge Gregory Woods dismiss both cases. Woods accepted Figeuredo’s “well-reasoned” and “thorough” reports, and dismissed both cases last September—but in a twist, the cases were dismissed without prejudice, giving the plaintiffs a chance to file amended complaints.

Amazon and the publishers insist there is still no case. “While the [second amended complaint] has swelled plaintiffs’ allegations by more than 30 pages and 100 paragraphs, those additions overwhelmingly consist of repetitions of the same alleged facts from the [complaint] that the court has already determined do not state a claim,” reads a December, 2022 letter from Amazon lawyers.

The plaintiffs argue that the case should be allowed to proceed. “The question at this stage is not whether Defendants have in fact violated the antitrust laws but, rather, whether Plaintiffs have met pleading requirements so that their claim—accepting all allegations as true and drawing all reasonable inferences in their favor—should get past a motion to dismiss,” the plaintiffs argue, insisting they have cleared that bar.

While the revived complaint adds details about the “supracompetitive” profit margins on e-book sales Amazon is able to reap and invokes Judge Florence Pan’s October 31 decision to block Penguin Random House’s acquisition of Simon & Schuster on antitrust grounds, it appears to still suffer from the key deficiency of its predecessor: the lack of any direct evidence suggesting coordination among Amazon and the publishers.

Link to the rest at Publisher’s Weekly

So why are algorithms still so bad at recommending books?

From The New Publishing Standard:

Over at Book Riot, Arvyn Cerezo takes us through the process and then explains why they will still recommend a book you have absolutely no interest in.

Machine learning systems called recommender systems, or recommendation systems, use data to assist users in finding new products and services … These algorithms, however, need a decent amount of data to choose a recommendation strategy in order to produce meaningful and personalized recommendations. This data may include past purchase histories, contextual data, business-related data, user profile-based information about products, or content-based information. Then, all of these are combined and analyzed using artificial intelligence models so that the recommender system can predict what similar users will do in the future.

All very clever, but…

The limitations of content-based filtering include its inability to comprehend user interests beyond simple preferences. It knows some basic stuff about me, but that’s as far as it can get. What if it recommends a racist book? What if it recommends a book that might trigger readers without some heads-up? What if it recommends a book that is problematic? The keyword is nuance, and algorithms can’t tell the difference between two books that have similar stories.

And don’t we know it? Fifteen or more years buying books on Amazon and it will still recommend books I would eat shards of glass than read.

I always figured that was just Uncle Jeff getting revenge for one of my less complimentary posts about Amazon, but it seems in fact it’s just that the recommendations system is as useless today as it was fifteen years ago.

Cerezo concludes:

“With all the pitfalls of algorithms — and AI in general — it seems like nothing beats book recommendations done by an actual human being. They are more accurate and more personal. Most of all, you can also find hidden gems that you really like rather than the bestsellers (and what everyone’s reading) that these machine learning systems always spit out.”

Two points arise.

First, “rather than the bestsellers (and what everyone’s reading) that these machine learning systems always spit out” is fundamental to the problem. Algorithms – especially for a commercial operation like Amazon – have the sole purpose of selling more books. They and the company do not give a flying fig about our personal preferences.

Link to the rest at The New Publishing Standard

BooHoo, Amazon presents books it thinks that the person who signed in will want to buy based on their past buying, browsing and searching habits.

As far as “personal preferences” are concerned, PG supposes that some people have “personal preferences” in books that they don’t want to buy or read or do something with, but is Amazon somehow required or expected to understand someone’s personal preferences that have not been reflected in their previous and current activity on Amazon?

If PG was as concerned about Amazon and his personal preferences, he would open a new Amazon account and be careful not to let anyone else use it. Within a few weeks, Amazon would understand PG’s personal preferences by what he did on the site with the new login ID.

As far as “book recommendations done by an actual human being,” without being a snob about it, PG has never met a person working in a bookstore who would have been likely to give him a good and precise suggestion for a book that PG would like to read. The most PG has ever received is something like, “Our twentieth-century history books are over there,” or “Fantasy and Science Fiction is on aisle three.”

To be fair, if PG in his current instantiation ran into PG at age thirty working in a bookstore, current PG doubts his thirty-year-old self would understand much about PG, the elder’s preferences in books.

If PG was good friends with a bookstore employee and had spent hours talking about books with that person, the results might be better if PG showed up when the bookstore was open and the employee was working at the time.

Go Wide or Run Away or Amazon Fail

From Kristine Kathryn Rusch:

[Note on 5/5/23: As most of my regular readers know, I’m dyslexic. I have a first reader to catch errors, but this post–which was late–went live without the assistance of that first reader. As a result, I made two typical errors for me, which have been discussed in the comments. Normally, I leave my mistakes and let the comments speak for themselves, but because the KU people are here, these two small errors have grown all out of proportion. At the request of a few folks, I’ve removed the mistaken passage and corrected a math error, but I’m leaving all the comments, which I think are valuable. If you want to read the actual removed section, download the audio version. The errors remain there.]

I’m writing this on the last day of April. I’ve been planning this post for months now, as the drumbeat of bad news out of Amazon escalated from rumors to asset sales to major layoffs. The reason I’m posting the date in this blog is because by the time you read this, there might be even more news that has somehow affected writers.

I’ve been worrying about this year since at least 2011. Maybe longer. I knew at some point, the world’s largest retailer would mess with their ebook program(s). Amazon is not a book retailer. They’re no longer a bookstore, and haven’t been one since the last century.

They’re an online retailer, currently the largest in the world by most measures, but they might not be number one by the end of 2023. Others are rapidly climbing the list, and aren’t suffering from the same kind of missteps that Amazon made during the past few years.

When big companies have bad earnings reports, the people running the big company must make changes—even if changes aren’t warranted. The CEO answers to the stockholders, not to the customers, and stockholders generally demand some kind of change…or the CEO gets fired.

In the past two years, Amazon has had bad earnings reports. 2022 was terrible.

. . . .

Keeping an eye on earnings reports, both expected and actual, are important for writers to do with any business they’re tied up in, because then the writer isn’t blindsided by changes that come from above.

The losses started in mid-2021, but they were small. Year over year, though, which is how most publicly traded companies now look at earnings, were devastating in 2021. After all, 2020 was filled with phenomenal growth. A year later, the growth was slowing, and by 2022, reversing.

Amazon made a lot of money during the pandemic and, like many tech companies, seemed to think that the gravy train would continue. Apparently no one in the company thought it through: what we were going through was a true Black Swan event. It happened worldwide at the same time, and no one alive had gone through anything remotely similar.

Rather than seeing the event as something unique, with its own set of rules, the people in charge of the tech companies decided the future had arrived. We would all be shopping online forever now, talking to friends and family on Zoom, and never leaving our homes. Apparently, these starry-eyed CEOs and prognosticators weren’t listening to their own friends and family, who were probably chomping at the bit as much as everyone else, waiting for the day when they could burst out of their little bubble and return to “living” again.

When living returned, the tech companies saw quarter to quarter losses, and many of those losses were major. Some companies are doing just fine because they didn’t expand during the pandemic. But others are doing poorly.

Like Amazon.

Amazon spent the newfound wealth like it was a growing start-up again. They bought or rented warehouse space all over the country, and added a huge number of employees.

And now, with the financial losses, Amazon is reversing a lot of those decisions.

Most writers wonder why that’s important. After all, big companies are just big companies, right? They have money. They’ll continue.

But they don’t always continue. Take a look at Bed, Bath, And Beyond. In fact, take a look at this article in Business Insider, which is illustrated with large bold subheads. It gives a quick overview of how a company can go from a juggernaut 20 years ago to bankruptcy and possible closure today.

For more than a decade now, I have fought with writers old and new about relying solely upon Amazon. I’ve written blog after blog recommending that writers go wide, and yet many writers never listen.

. . . .

I kept saying that someday Amazon will change, and that change will hurt writers, particularly those who tie their entire writing career to Amazon. The writers who have gone exclusive through Amazon via Select are really going to be in trouble.

And the trouble has already started.

Some of that trouble was built in from the start. What actually got me taking notes for this blog post was a Facebook post from one of the best-known Kindle Unlimited writers who claimed that writers never have a passive income off their work. Writers must constantly write and release to be successful.

Um…what? Really? News to me and most writers who have gone wide. One of the best things about writing is the passive income. If Dean and I quit tomorrow, we will continue earning for years to come. Sure, some of the revenue will go down a bit if we don’t put out new product, but mostly, the income will plateau.

Apparently, goosing payment through new releases is one of the few ways that K.U. writers survive. And if they don’t do it, they don’t get paid as much or as well. Or maybe not at all, given what he (and all of the people in the comments) said.

Link to the rest at Kristine Kathryn Rusch

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

PG acknowledges that Amazon is far from perfect. However, at the present time, it’s still the best friend indie authors have.

A handful of stats from a TPV post a few days ago:

  • Amazon sells over 487 million ebooks through Kindle every year.
  • The company’s market share in ebook sales stands at least 67%, climbing to 83% when Kindle Unlimited is included.
  • Amazon is estimated to control over 87.9% of yearly ebook sales in the UK.

PG prognosticates that ebooks are the future of publishing, indie or otherwise. Compared with the dead-tree side of publishing, ebooks have a much higher margin. All you need is a website, the ability to process credit card purchases and enough cheap online disk space to hold a bunch of electrons in one or more ebook formats.

Amazon’s management decisions have definitely gone downhill since the Bezos era, but even less-talented management has definitely established the best way to sell ebooks at a profit. It’s a reliable cash generator. However, the book business as a whole, traditional or indie, is not a huge money-maker on either the gross or net column in a giant company’s annual report.

Amazon’s huge overhead numbers and sunk costs are in the bricks and mortar side of things. Lots of physical warehouses being stocked with lots of physical products which are then sold and shipped all over the place, mostly on trucks, but also on planes. Amazon has certainly modernized the way physical warehouses are operated, but physical warehouses and physical shipping is a very expensive way to distribute goods compared to a bunch of spinning disks hooked up to the internet. Bits are always more efficient than atoms.

PG would like to see more than a few upstart competitors to Amazon’s book business pop up. It’s not difficult for PG to envision a much better internet bookselling platform than Amazon’s.

However, while he doesn’t have definitive inside information, PG suspects that trying to fund a company to compete with Amazon in ebook sales is a very, very hard sale to any venture capitalist.

With respect to ebooks, The Zon has fallen into the same pit that has claimed or almost claimed a whole bunch of tech companies – keep the servers running, collect the easy profits, but send a lot of money and a great many smart people in the organization off pursuing this or that flavor-of-the-month in the start-up world.

Amazon Publishing Statistics

From WordsRated:

Amazon was initially founded as a bookselling platform in 1995. Since then, the company has gone through massive changes, becoming the world’s biggest retail company in which bookselling represents just a fraction of profit.

However, even in the book sales sector, the company dominates the book publishing industry with an upwards trend, threatening to overtake the market in the future completely. On the other hand, the company did a lot of positive things for the book industry, such as the emergence of self-publishing accessible to anyone. In this report, we’ll cover all the aspects of Amazon’s book publishing business.

Amazon book sales

Even though Amazon’s book sales make up only 10% of the company’s profit, they are still the biggest seller of books in the United States and worldwide.

Amazon generates around $28 billion worldwide from book sales every year. The company is responsible for over 50% of sales from the Big Five publishers and controls between 50% and 80% of the book distribution in the United States.

  • Amazon sells at least 300 million print books every year.
  • The company reportedly controls at least 40% of the print book sales in the States.
  • Some estimates show that by 2025 Amazon could take over more than 70% of the US print book market.
  • In the UK, Amazon controls at least 50% of the market, selling over 106 million copies each year.

When it comes to ebooks, Amazon is dominating the market by a wide margin.

  • Amazon sells over 487 million ebooks through Kindle every year.
  • The company’s market share in ebook sales stands at least 67%, climbing to 83% when Kindle Unlimited is included.
  • Amazon is estimated to control over 87.9% of yearly ebook sales in the UK.
  • Even though the company sold more ebooks than print books in 2011, nowadays, Amazon sells 3x more print books than ebooks.

Self-publishing on Amazon 

Amazon has been the driving force behind the massive emergence of self-published books in the United States:

  • Amazon releases over 1.4 million self-published books through its Kindle Direct Publishing every year.
  • This doesn’t even take into account self-published ebooks with no registered ISBN number, so the extent of Amazon’s self-publishing figures is much higher.
  • Kindle Direct Publishing is regarded as the largest ebook publisher of self-published ebooks, even without official numbers available.
  • Amazon pays over $520 million in royalties each year to over 1 million authors who decided to self-published through KDP.
  • Only 1% of audiobooks on Audible are self-published
  • Self-published books account for 31% of Amazon’s ebook sales
  • Self-publishing authors have the option to publish their work in 40 languages.

Amazon’s Royalties Paid to KDP Authors

Link to the rest at WordsRated

Amazon Advertising Analysis Tools

PG has been looking at various tools for analysing Amazon Advertising.

He has tried out a bunch of these types of tools over the years and has not found one that really fits him.

He won’t name names, but the UI on more than one of these tools is pretty crude.

PG has mostly used Excel spreadsheets, but would like to find something that could do a better job of showing him what ads and advertising strategies work and what don’t. He just checked and he has detailed data from 118 advertising campaigns on his Mother of All Excel Spreadsheets.

He’s also looking into various key word generators. Again, he’s tried out more than a few and hasn’t found his true key word love either.

Feel free to share suggestions in the comments, including likes/dislikes about the tools you’ve tried. You can also use the Contact PG link at the top of the blog to share your thoughts and opinions with PG privately.

5,000 words, but the Amazon CEO letter to shareholders offers little promise for the publishing industry

From The New Publishing Standard:

One cannot help but feel no news is bad news for an industry which has for so long allowed itself to become unhealthily dependent on one company and has for so long eschewed opportunities to build up alternatives and fully support rival players.

To be fair, neither Jassy nor Bezos could ever hope to cover even a fraction of Amazon’s many sectors in a letter to shareholders like this.

But in the past, publishing and the Kindle store and devices have been strong features.

This year the only mention of the Kindle is in historic context, and the nearest we get to a vision of publishing is an acknowledgement Amazon has closed all its bricks & mortar bookstores, and that ads in audio are the new black.

Jassy has previously made clear the Books element of the Amazon machine is a sideshow, and most recently we have seen The Book Depository marked for closure.

Link to the rest at The New Publishing Standard

PG suggests the author of the OP hasn’t really been paying much attention to Big Publishing for a long time. In short, there’s not enough money in traditional publishing to move any needles for Amazon. It’s small potatoes compared to any number of other things Amazon does to make money.

All the physical bookstores could simultaneously close and not have any meaningful influence on Amazon’s bottom line.

To be fair, indie authors are in a similar position as far as moving Zon’s needle, but Amazon has streamlined KDP and its underpinnings to the point that computers and automated presses pretty much handle the entire process of publishing, selling and shipping a physical book. Of course, taking an order for an ebook and delivering it is a 100% computer job.

With indies, Amazon doesn’t have to buy truckloads of printed books that have to be unloaded, taken to the right place in the warehouse and take up space gathering dust until Amazon sells them all or its computer decides to return the unsold physical books back to the publishers’ warehouses.

If the truth be told, Amazon would be much happier if traditional publishing used the same production process as indie authors do – print on demand.

4 Pillars of Book Marketing, or How to Sell More Books in Less Time

From Jane Friedman:

When I first started marketing my wife’s books, I thought we needed to be everywhere and do all the things in order to be successful:

  • Facebook ads
  • Amazon ads
  • BookBub ads
  • YouTube ads
  • Promo sites
  • Facebook groups
  • All other social media platforms
  • Newspapers and magazines

The list goes on—and on. The truth of the matter though, is that you don’t need to do even half of what’s on that list.

The do all the things approach likely does more harm than good, especially in the beginning. Sure, further down the line, you can start adding to the list, but even then, don’t feel you need to.

My wife’s books currently earn a healthy six-figure income. And we use two traffic sources:

  • Facebook ads
  • Amazon ads

Now three years into the journey, we are starting to explore other traffic sources so as not to rely so heavily on Facebook and Amazon. But these two platforms alone, along with a small spend on BookBub and promotional sites for launches and promotions, drive the results for us.

. . . .

Marketing for 30–60 minutes per day came about as more of a necessity than anything else; with three children under the age of three in the house, time isn’t something either my wife or I have much of! If you currently have young children or have done so in the past, you’ll know where I’m coming from. So I had to make sure every minute I spent was on the right marketing for us.

Avoiding the shiny objects discussed in Facebook groups, i.e. the latest fads, I identified what was driving results for us and doubled down on them, eliminating everything else.

This is when I (accidentally) identified what I now call the four pillars of book marketing. And, after speaking with many authors over the past couple of years, I believe these four pillars are critical for every author.

Without them, you’ll be spinning your wheels not knowing what to work on and when, or worse, spending your resources on things that don’t move the needle.

So, here’s what you’re going to learn:

  • What the four pillars of book marketing are
  • Why 30–60 minutes per day spent marketing is all you need
  • How and why to craft a strategy for your author business
  • Identifying your lever-moving activities
  • How to plan out your days, weeks, and months for maximum productivity and results

The 4 Pillars of Book Marketing

Some activities in your author business may not be exciting but are essential to keep your business going, such as accounting, taxes, replying to emails, and other admin/auxiliary tasks.

When it comes to marketing and driving book sales, there are really only four pillars that truly matter:

  1. Book product page
  2. Traffic
  3. Audience building
  4. Profit

Book product page

Something I say to authors a lot is: Your book sells your book.

No amount of marketing or advertising is going to sell a poor-quality book.

You could be the best marketer in the world, but if your book itself isn’t up to scratch, isn’t up to the standard it needs to be in today’s world of publishing, it’s not going to sell.

You may be lucky and get a few sales, maybe even a few hundred sales right off the bat. But when the reviews and ratings start coming in, the performance of your marketing is going to decline over time.

This is why, yes, you need to write a stellar book. But you also need to present your book in the best possible light. And you achieve that by creating a superb book product page.

After all, sales don’t happen in your Facebook ads, BookBub ads, Amazon ads, etc. They happen on your book product page. That’s where readers make the decision to buy or not to buy your book.

The key assets of your book product page you need to focus on are:

  • Book cover
  • Book description
  • Pricing
  • Reviews and ratings
  • Look Inside
  • A+ Content, specific to Amazon (optional)

With a compelling and engaging book product page in place, all of your marketing and advertising will perform that much better because your conversions (i.e., sales directly from your ads) will be higher.

And the more sales your ads generate, the more organic sales (sales that come as a result of your Amazon rank) you’ll enjoy.

. . . .

For my wife’s books, we are exclusive to Amazon. Authors who have books in the Top 500 of the Kindle store generate 80–90% of their sales directly as a result of their bestseller rank. These are all, essentially, free sales.

But to achieve a great bestseller rank and enjoy those organic sales, you need to tickle the Amazon algorithm enough to take notice of you, which you do by driving sales through your own marketing and advertising efforts, such as Facebook ads and Amazon ads.

. . . .

Audience building

As an author, your biggest asset is your books. Your next biggest asset is your audience.

I’m not talking about your Twitter followers or Facebook likes. I’m talking about true fans of your books, who you have direct access to through email.

The issue I have with building an audience on platforms such as Twitter and Facebook is that you’re building this audience on rented ground. If your account on one or more of these platforms is suddenly shut down, you would lose your entire audience overnight.

To avoid this situation, by all means, build an audience on these platforms, but, make sure you are de-platforming people by encouraging them to join your email list, which is best achieved through offering them something in return for their email address, such as a short story, a novella, a bonus chapter, or even a full book; this is commonly known as a reader magnet.

With an email list, you can contact your audience at any time (within reason, of course), ask them to buy your new release, leave a review of your book, and let them know about a flash sale you’re running.

When your email list becomes large enough, you can drive a LOT of sales of your new releases and your backlist, and it won’t cost you a penny in advertising. Your world really is your oyster when you have an email list.

Just respect your audience, don’t spam them, provide value (yes, even entertainment is considered value), and share a little or a lot, whatever you’re comfortable with, about yourself, your writing—even Tibbles, your cat, who accompanies you whilst you write!

Remember, you are communicating with real people, so be sure to treat them as such. And ultimately, be your true authentic self.

Link to the rest at Jane Friedman

Amazon’s Ending of Kindle Newsstand Could Severely Impact SF/F Magazines

From Patreon:

My father grew up in a rough, rural area where his family’s neighbors were bootleggers and backwoods mobsters. One of these mobsters liked him and, when my father turned 12, announced my dad was old enough to carry a gun for self-defense. He then gifted my father an illegal sawed-off shotgun covered in black tape to hide fingerprints.

“Be sure to hide it from the deputies,” the mobster said.

Growing up around all that, my dad learned a good bit of life wisdom. And one bit of advice he shared with me is that if someone’s rigged a game, don’t play it unless you’ve got no choice.

Sadly, sometimes we have no choice. Which brings us to Amazon.

In December, Neil Clarke of Clarkesworld said that “In an absolutely devastating announcement (right before the holidays) Amazon has informed us that they are ending their Kindle Subscription program in 2023 and trying to get magazines to switch to Kindle Unlimited.”

Michael Damian Thomas of Uncanny Magazine echoed this news. “If you are an SFF short story writer, the sky is falling today. This Kindle news couldn’t come at a worst time with what is also going on in social media. We were all barely scraping by. This is an extinction-level event for the ecosystem unless we all figure something out.”

The reason for the alarm is that over the last decade, Kindle subscriptions have become a significant part of the overall circulation for a large number of science fiction and fantasy magazines. Essentially, people like the convenience and ease of buying and reading e-books and expect the same from their magazine subscriptions.

By ending the Kindle Newsstand program, Amazon would no longer allow people on their platform to subscribe directly to magazines. Instead, Amazon announced it would allow certain magazines to remain on the platform through their Kindle Unlimited program.

As Rajiv Moté said, this means Amazon would be “moving e-magazines to a Spotify model, just like music. You pay the sales platform, not the producers.”

Because Kindle Unlimited (KU) allows subscribers to read as much as they want for a monthly fee, KU pays authors and publishers based on how many pages people read. The problem with translating this to magazines is many people don’t read every page in a magazine. Instead, they may pick out certain stories and articles to read, or may even stop reading a story if it doesn’t work for them. (Update: One anonymous source has told me Amazon’s KU for magazines won’t be based on pages. But specific details are not available.)

With an actual subscription, a publisher receives guaranteed revenue from each subscriber. With KU, the revenue magazine publishers receive will be far more uncertain.

Worse, as Uncanny pointed out about their own magazine, not all genre magazines were offered the chance to join Kindle Unlimited.

Since that initial announcement during the 2022 holiday season, genre magazine publishers have been trying to figure out their options. During a call with Amazon, Neil Clarke learned that “KU for Magazines is different than KU for books. It will not prevent us from publishing/selling our magazine elsewhere. It is not paid per-paid, but based on an annual projection based on ‘qualified borrows.'”

Link to the rest at Patreon

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
Bug

“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.