The American Booksellers Association, Open Markets Institute, and the Authors Guild sent an open letter to the Federal Trade Commission (FTC) and Justice Department asking the agencies to investigate Amazon for dominating the book market. The letter attempts to reframe Amazon’s success story as anticompetitive, But it is a perfect example for why abandoning the consumer welfare standard results in the FTC being used to protect select competitors rather than consumers.
This letter comes in the context of a broader change in antitrust regulation. From the 1970s to the beginning of the Biden administration, antitrust enforcement was guided by the consumer welfare standard. That standard sets an objective criterion for antitrust action when industry conduct is shown to harm consumers by restricting services or raising prices.
Since the appointment of Lina Khan to head the FTC, the commission has led the way in attempting to expand antitrust law beyond consumer welfare. This change has not succeeded in court thus far and the FTC has suffered a series of losses with no sign of reevaluating its approach.
The letter focuses on the impact on bookstores and authors trying to compete and reframes the impact on prices as a negative one, stating “to publishers and authors, however, it represented a ruthless effort to drive down the value of books in readers’ minds and undercut the viability of the entire industry.”
Read the full Hill article here.
Steve Pociask and Trey Price work on a wide range of policy issues for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.theamericanconsumer.org or follow us on Twitter @ConsumerPal.