Yes, you read that headline correctly. When the DOJ lawsuit against the publishers came out last year, it became a lot more about Amazon and their alleged monopolistic practices than it was about the publishers and their alleged collusion. Now three independent bookstores are suing Amazon and the publishers for anti-trust violations around DRM.

Lawsuits and most media coverage completely miss the point about Amazon’s success. If a picture is truly worth 1,000 words, I’ll save you a lot of reading:

Amazon Kindles and their owners

That’s from an improptu D.C.-area get together of KindleBoards members (I’m the yellow sleeve on the bottom left.) Four Kindle owners; 12 Kindles.

Think that’s a fluke? Hang out on KindleBoards for a while. Read signature lines. Owning three or more Kindles is not uncommon.

Folks, you don’t get that kind of loyalty through monopolistic practices. You get it through a great product that people love.


  1. Hmm. While I’m fine with the idea that current Kindle owners are repeat customers because they’re really satisfied with Amazon and Kindle, I don’t think it’s possible to simply dismiss the potential power of monopolistic practices.

    Hypothetically, Amazon could do something to make those Kindle owners wish they could buy DRMed content from someone other than Amazon, or to read their Kindle e-books on a different brand of e-reader. In practice, though, any angst seems pretty darned unlikely. Tablets provide a very reasonable alternative should Amazon ever become unreasonable.

  2. “Folks, you don’t get that kind of loyalty through monopolistic practices. You get it through a great product that people love.”

    Microsoft evangelists from the 90’s (monopoly)
    Apple fan boys from the 00’s (monopoly)

    Yes you do, I’m just happy the monopolies don’t last forever! 🙂

  3. I’ll also note that all of those Kindles are the *reason* that the bookstores are suing. They’re unable to sell big-name e-books to those Kindle owners because the Kindle won’t open DRMed e-books except those obtained from Amazon.

    Given the differentials in pricing and delivery “friction,” though, I can’t imagine that very many Kindle owners care that they can’t buy DRMed e-books from anyone besides Amazon.

  4. Gavin, I knew someone would bring up Microsoft. There is a difference. People bought Microsoft because a) they needed a computer and b) they believed Microsoft was the only game in town. Kindles are different. No one needs to buy them. And there are valid alternatives. Avid readers can buy paper books, Kobos or Nooks.

    Not saying I agree with all of Amazon’s decisions *cough* KDP exclusivity *cough*, but they do create amazingly loyal customers who willingly use the word “love” in their statements. I don’t remember very many people saying they “loved” Microsoft.

    Doug, you’re right. Amazon has been very easy to do business with (for consumers). I call that “good business sense,” not evil. And I don’t really think they’ve been monopolistic. I can’t remember the URL, but last year I read a pretty detailed description (it might have been Passive Guy) of why they aren’t a monopoly. Just a very smart business.

  5. “They’re unable to sell big-name e-books to those Kindle owners because the Kindle won’t open DRMed e-books except those obtained from Amazon.” …and my local Nissan dealer won’t sell you a new Ford, either.

    The booksellers that are upset have the following options:
    1) Build their own infrastructure. (Late to the game, but still…)
    2) Sell through someone else, like B&N. (Good luck on that one, indies.)
    3) Sell non-DRM books, like Baen did, making pot-loads of money. This has the added benefits of allowing you to sell anywhere and of not p*ss*ng off your customers. It unfortunately meant that, up until lately, you couldn’t sell bestsellers, but see 1) above.

    Amazon is not required to be nice to competitors. In addition, DRM was initially driven by publisher requirements as much as Amazon. Amazon was pleased as punch to offer this service to publishers, to make them ‘safer’, but they didn’t require it. I suspect Jeff Bezos, who recall had a very clear, publicly espoused plan (see his 2007 article), was more than happy that the publishers demanded he jump into the briar patch, of course.

    The fact that some independent booksellers haven’t established a viable infrastructure isn’t Amazon’s (or the big six’s) fault. Fictionwise had a good long run, which only ended when they sold out to B&N for a nice sum of money. I just checked, Powell’s is still in business.

    Jack Tingle

  6. On a linear scale of evilness, with Jesus at 0, Google at 2, Apple at 5, Microsoft at 8, Monsanto at 20, Hitler at 100 and Paypal at 9002, Amazon will rank at about 4 to 6, depending on how you look at them. That is super-nice when compared to Hitler, but still pretty evil when compared to little fluffy bunnies.

    Jeff Bezos has decided that he is going to make money off his customers, not his suppliers, employees and competitors, and hence he does everything to make the customers happy (unlike Paypal, who have decided that they will scam their customers whenever they feel they get away with it). But for publishers, Amazon squeezes margins without mercy, to the point where they kill small indie publishing houses. Amazon also messes badly with professional sellers on its market place, and is has been known to intentionally ruin IT startups to hire their talent after they go bankrupt. And I am sure that you are aware of the working conditions of people working in Amazon’s fulfillment centers, too.

    That being said, Amazon is probably one of the most visionary companies on that little planet of ours, right there with Google. No-one plans so far ahead and executes so well.

  7. You’re stilling misunderstanding what’s going on here. Amazon didn’t initiate the requirement for a DRM system, the publishers did. This conspiracy didn’t start in 2007, it started in 1997. Amazon did not go to the publishers and say “Hey, let’s lock everyone else out of the market.” The publishers quietly agreed that they would not let anyone publish their titles in electronic form unless that company could provide a Digital Rights Management system that would give the publishers a degree of confidence that their titles couldn’t be stolen wholesale, as was going on with popular music.

  8. @Jack: “Amazon is not required to be nice to competitors.” Unless they’re a monopoly, which is what is being alleged. And in recent times, the courts have added further conditions: “a monopoly that not only drives out its competitors but prevents new competitors from entering the market, to the detriment of the consumer.”

    Personally, I’m skeptical that the 60% share that the complaint assigns to Amazon is monopoly-level to begin with. And Amazon isn’t using its proprietary DRM to drive its biggest e-book competitor, B&N, out of the market. If the current indies are forced to abandon the e-book market, prospective new entrants will find very few barriers to selling e-books — except for having to compete against Amazon, but of late the courts have seen fit to ignore the chilling effects of a “not a monopoly” company having obliterated its competition and being quite ready to do it again. Finally, I think it’ll be impossible to show that consumers would have benefited if indies could have sold DRMed e-books for Kindles.

    This particular lawsuit strikes me as ill-advised, but that’s because of the specific circumstances.

  9. Once again: Amazon does not require DRM. Some publishers require DRM. Not ALL publishers require DRM. I have purchased many many e-books from amazon. I’d guess about a third of them are DRM-free. Some of these are from small publishers. Some are from authors selling titles from their backlists. Amazon does use a non-ePub format (mobi) and a non-Adobe method of applying DRM, both of which I think amazon owns. This is known as vertical integration and, presumably, helps amazon keep costs down.

  10. @joscha – My partner and I started a small publishing operation last year (and bought another larger one, so we’re suddenly a “big” tiny publisher), and I think you’re pretty close, but I don’t feel squeezed by them– they offer among the best splits of the royalties (there are others that offer less), an easy to use interface, and they do have actual customer service for both front door customers and publishers. I’d even rate them better then you did because of that by itself.

    As far as the bookstores and ebooks– the bookstores needed to move on this a lot earlier (3-5 years ago) to try to find a way to sell ebooks in the bookstores, though the big publishers likely wouldn’t have participated, and won’t until Amazon has them over a barrel, too. We’re offering our ebooks in bookstores (we offer the same discount as for paper, a really simple display and checkout process, and some nice incentives) and bookstores tend to look at us and act like we’re space aliens when we say “ebooks in bookstores”.

  11. What stands out about the latest lawsuit is, the plaintiffs don’t know enough about technology to write a realistic complaint. As others have said, DRM “yes or no” is a publisher’s decision on the Kindle platform. And I have plenty of non-DRM’d books from non-Amazon sources on my Kindle. So, what they are saying in effect, is that they want to keep DRM on ebooks, but force competing companies to support each others’ DRM. Presumably, Kobo, Nook, and iBooks would then be required to support Amazon’s DRM if Amazon offered epub-format as an option? Good luck getting that one past Apple.

  12. @carmen Apple already supports everyone elses DRM, and they do it without having to root or jailbreak anything. I have free Kindle, Nook, and Kobo apps on all my iOS devices, plus Overdrive for reading library books. The only restriction they apply is that they don’t allow in-app purchases– you have to use the browser and then go read it in your app. There are plenty of other things I might complain about regarding Apple, but locking other booksellers out of their devices isn’t one of them. It would probably be harder to get them to allow Apple DRM on Android devices (via an app)– they’re primarily a hardware company and use iBooks to sell premium hardware. The others are all content companies that use their reading devices to sell content. That said, the variety of formats and DRM restrictions can be very frustrating for readers, and we sell DRM-free for their convenience.

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