Amazon is riding high on the success of its first ever Prime Day, celebrating its 20^th year in business. Amazon’s triumph may be short-lived, however, says the New York Times. At the request of the Authors Guild, the American Booksellers Association, the Association of Authors’ Representatives and Authors United, the U.S. Department of Justice is investigating Amazon for possible antitrust violations.

According to The Times, Douglas Preston, a Hachette writer who leads Authors United, started the current government action.”Disruption is healthy, an inevitable byproduct of a world that changes,” says Preston. “But there isn’t a single example in American history where the concentration of power in one company has in the long run benefited consumers.”With Amazon selling roughly a third of all new print books and controlling an estimated two-thirds of e-book sales, critics like Preston believe that Amazon is unfairly controlling the market. In a letter to William J. Gaer, Assistant Attorney General for the Antitrust Division, the American Booksellers Association makes a number of allegations, including:

1. Predatory selling – Selling books below cost.
2. Abuse of monopsony power over publishers – Using punitive tactics to force publishers to toe the line.
3. Closed Kindle e-book system – Restricting Kindle usage to books sold by Amazon.
4. Free riding and showrooming – Unfairly gaining a competitive edge over brick-and-mortar stores.

“As with our author colleagues, we are concerned that the mega-book-retailer Amazon.com has achieved such considerable market power with such questionable business tactics that it is undermining the ecosystem of the entire book industry in a way that will be detrimental, especially to mid-list authors, new authors, and minority voices. A May 2014 study from the Codex Group, a respected industry research organization, found that Amazon has 64% market share of e-book sales and a 41% market share of all new book sales,” says the letter.”Given Amazon’s dominant market share, no publisher – regardless the size – can afford to not do business with them, whatever the cost. And no one knows this better than Amazon, which has ruthlessly cut off the sales of publishers large and small when they have not yielded to Amazon’s strong-arm negotiating demands.”The allegations are eerily similar to those made against Apple and five major publishers to try to regain control of digital books from Amazon, who controlled 90% of the e-book market at that time. Federal prosecutors felt Apple and the publishers used agency pricing which left Amazon with no other resort but to raise prices. The publishers settled the case, but Apple appealed. The software giant lost its appeal in June by a 2-to-1- vote.After that ruling, Judge Baer said this in a statement following the ruling: “The decision confirms that it is unlawful for a company to knowingly participate in a price-fixing conspiracy, whatever its specific role in the conspiracy or reason for joining it.”The ruling forces Apple to pay consumers $450 million to settle a 2014 class action suit in 33 states, says Reuters. In a statement about the ruling, Apple said, “While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010 and are assessing next steps.”Insider Take:Stan Lee’s Spider-Man had it right, “With great power, there must also come great responsibility.“ (Amazing Fantasy, #15, August 1962)While Amazon and Apple have created products and services we use every day, they still have a corporate responsibility to play fairly. We aren’t lawyers and can’t presume to know all the complexities behind pricing or publisher relationships, but we believe that all subscription companies, regardless of their size, should act fairly and transparently in all of their transactions.