The Association of American Publishers (AAP) filed comments with the Federal Trade Commission (FTC) —in connection with the Commission's hearings on Competition and Consumer Protection in the 21st Century—urging the Commission to more closely scrutinise the behavior of dominant online platforms that pervade every aspect of the economy.
In its 12-page filing, AAP underscores the fact that dominant technology platforms exercise extraordinary market power in the markets for book distribution and Internet search: “No publisher can avoid distributing through Amazon and, for all intents and purposes, Amazon dictates the economic terms, with publishers paying more for Amazon’s services each year and receiving less in return.”
AAP also stresses the significant role that platforms play in facilitating transactions for unauthorized books. Amazon’s approach to its online bookstore enables “widespread counterfeiting, defective products, and fake reviews that both degrade the consumer experience and diminish the incentives of authors and publishers to create new works and bring them to the marketplace.”
With respect to search, AAP notes that Google’s complete and untouchable dominance is highly problematic “because its business model is largely indifferent to whether consumers arrive at legitimate or pirated goods.”
In all, AAP points the FTC to five primary areas of concern: (i) platforms exercising extraordinary market power in the markets for book distribution and Internet search; (ii) the threat to competition when platforms act as both producers and suppliers to the marketplaces they operate; (iii) platforms’ imposition of most-favored nation clauses and other parity provisions that stifle competition, market entry, and innovation; (iv) platforms’ use of non-transparent search algorithms and manipulated discovery tools that facilitate infringement and deceive consumers; and (v) platforms’ tying of distribution services to the purchase of advertising services.
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