Richard Brown’s letter of May 4 to the Wall Street Journal highlights the problem of narrow market definition when considering anti-competitive behavior. Brown suggests that the e-book publishing business would become a price-setting cartel if their agency agreement with Apple were allowed to stand. Cartels, he rightly claims, reduce the ease of market entry for potential competitors and, thus, harm consumers.
The question is, how much protection do consumers of books really need? We can buy books at bookstores, where a variety of chains and individually-owned stores aggressively compete. We can buy books online. We can buy used books on Amazon. We can trade books with friends. We can borrow books for free from the library. Is the “e-book industry” so critical to our reading habits that we must be protected from its hungry maw? What if the e-book industry consisted of only one publisher? Would that publisher be an illegal cartel subject to anti-trust action?
At the root of the issue is simply Apple trying to compete with Amazon. Isn’t that a good thing?
I applaud Brown’s concern with anti-competitive behavior, but hope that the Justice Department is wise enough to see the forest, not the trees. It will save us all a lot of money.