Amazon: Google Book deal is "antitrust nightmare"

 

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Posted on 3 Sep 2009 at 09:15

Amazon has become the latest company to take a stand against Google's Book Deal, claiming it sets a dangerous precedent.

The deal will see Google pay $125 million to the Authors Guild and the Association of American publishers to create a massive repository of digitised books, where authors and publishers can register works and receive a portion of the revenues earned from ads, subscriptions and sales.

However, Amazon claims the deal could stifle competition: "The proposed settlement usurps the role of Congress in legislating solutions to the complex issues raised by the interplay between new technologies and the nation's copyright laws," the online retailer argues in a complaint filed with the US federal court.

It further claims the deal is "a high-tech form of the backroom agreements that are the stuff of antitrust nightmares."

Amazon's hypocrisy is breathtaking. It dominates online bookselling and the fledgling e-book industry

"The problem with the proposed settlement from an antitrust perspective is that it rushes to create this cartel while avoiding all restrictions that would cage its power to prevent harm to the public interest," it adds. "The proposed settlement creates a pricing mechanism that is fraught with the dangers associated with price-fixing."

The complaint was swatted away by Google: "The books settlement is injecting more competition into the digital books space, so it's understandable why our competitors might fight hard to prevent more competition."

It was also attacked by the Author's Guild, which has already signed a deal with Google.

"Amazon's hypocrisy is breathtaking. It dominates online bookselling and the fledgling e-book industry. At this moment it's trying to cement its control of the e-book industry by routinely selling e-books at a loss. It won't do that forever, of course," says Paul Aiken, the guild's executive director.

"Eventually, when enough readers are locked in to its Kindle, everyone in the industry expects Amazon to squeeze publishers and authors. The results could be devastating for the economics of authorship. Amazon apparently fears that Google could upend its plans," he concludes.