Amazon’s dominance in ebooks is down to a spectacularly misguided attempt to hobble what would have been its biggest competitor in the market, Apple, in which the European Commission played a part. The US Department of Justice decreed that Apple was conspiring with publishers in its bid to offer an alternative. The European Commission followed suit in forcing publishers to abandon the “agency model” they preferred instead. One district judge wondered aloud why he was pursuing an antitrust case against a company with almost no market share (Apple) thus strengthening the position of the dominant player in the market (Amazon):
“Would it not matter that all these people got together in order to defeat a monopolist like mice that get together to put the bell on a cat?” Judge Jacobs asked the state.
The reply he got from Obama’s deputy solicitor general was that publishers could have avoided antitrust scrutiny by er, ... giving their product away as a loss leader. Not so good for authors, then.
Yup. That’s about right for the European Union. Another instance of groupthink and politics triumphing over economically-literate regulation.
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