As she shuttles back and forth between her Naperville and Downers Grove bookstores next June, don’t blame Becky Anderson if she seems distracted. A federal trial in New York may have a lot to say about the future of her business.
Anderson, like just about everyone else in the book publishing industry, will be paying close attention to United States of America v. Apple, et al. The rub is that this small business owner, who represents other small business owners in her capacity as president of the American Booksellers Association, will be rooting for the big companies accused of violating antitrust laws. Victory for the Department of Justice, she said, will mean victory for Amazon, hastening the demise of the American bookstore.
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“It will create a situation where consumers don’t have a choice,” she said.
The suit was originally brought in April against Apple and five publishers, whom the Justice Department says colluded to set prices. The government argues that the publishers, and Apple, were unnerved by Amazon’s discount pricing structure.
According to the lawsuit, representatives of Hachette, Simon & Schuster, HarperCollins, Macmillan, Penguin and Apple met in a backroom at a tony New York restaurant to hatch the alleged price-fixing scheme. Simon & Schuster, HarperCollins and Hachette have settled with the government without admitting any wrongdoing. A fund has been set up to refund consumers. The remaining plaintiffs are taking their case to trial, saying they did no wrong.
Anderson said the battle is for the very future of bricks and mortar bookstores, which she said remain the top “point of first discovery” for readers of books, even if they buy those books online. She said the agency pricing structure, which the publishers named in the suit agreed to adopt — in which the publishers set prices, paying a commission to booksellers — is the way to keep bookstores alive in a world increasingly dominated by e-commerce.
“We need to protect the property of books,” she said.
The Justice Department, however, argues that it is protecting readers. Sharis A. Pozen, the outgoing assistant attorney general for the department’s antitrust division, told the Brookings Institution that the case is “most importantly … about lower e-book prices for consumers.”
Not everyone agrees. Peter Osnos, a former journalist and now a book publisher and editor, wrote in the Atlantic that the case is most likely to benefit Amazon.
“For the time being, the long-term impact of the Justice Department’s case on the publishing industry remains unclear, but Amazon certainly comes out ahead, with its position as the leading retailer of e-books reinforced, which also benefits its role as a major seller of traditional print books, self-published books, downloadable audio, and now also as a publisher,” Osnos wrote.
“Ultimately, with so many factors to consider,” he continued, “I agree with Sen. Charles Schumer (D.-N.Y.) who said, ‘I feel absolutely befuddled by the lawsuit. For the Antitrust Division to step in as the big protector of Amazon doesn’t seem to make any sense from an antitrust point of view. Rarely have I seen a suit that so ill serves the interests of the consumer.'”
Michael Wolf, chief analyst at NextMarket Insights and a contributor to tech news website GigaOm, told Businessweek magazine that bolstering the already dominant Amazon may not be the best thing for the buying public.
“For consumers, Amazon regaining more market power could result in less choice among retailers down the road,” Wolf said. “Whether Amazon is benevolent or not in the long run, that’s yet to be seen.”
Anderson said she remains optimistic about the future of her business. She’s proud of the publishing companies that are taking a stand, but said the Justice Department isn’t doing bookstores any favors.
At the end of the day, though, it may not be litigation that changes the game, but the onward march of technology. Litigation is nothing if not lengthy, and June’s trial could spawn years of appeals, no matter who wins. Given the turmoil of the last several years, it’s impossible to say what the marketplace will look like by then.
John Carpenter is a freelance writer based in Wilmette.
Megamerger coming
The merger of Penguin and Random House, first reported in October and expected to clear regulatory hurdles by mid-2013, would mean that one out of every four books published in the United States would come from one company.
Executives talk about “economies of scale” in situations like this, generally referring to back-office functions that will be done by fewer people, leaving more cash for things like better books.
That’s what Marjorie Scardino, CEO of Penguin parent firm Pearson, said when the deal was announced.
“Together, the two publishers will be able to share a large part of their costs, to invest more for their author and reader constituencies and to be more adventurous in trying new models in this exciting, fast-moving world of digital books and digital readers,” she said.
Becky Anderson, owner of Anderson’s Books in Naperville and Downer’s Grove and president of the American Booksellers Association, is hopeful but not quite as optimistic.
“I worry about the consolidation,” she said, noting that there are six sales representatives who service her stores from the two companies.
“They are our essential partners,” she said.
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Anderson also worried that the company’s size will breed a risk-averse culture not conducive to developing great literature.
“Maybe they won’t take chances because they’ll want to cut costs by publishing less,” she said.
But Richard Curtis, a New York-based literary agent and industry blogger, offered a more hopeful outlook, especially in the short run. The merged publishing house, he suggested in a recent post, will not want to risk losing hard-won bookstore shelf space by trimming imprint offerings.
— J.C.