June 24th, 2014

_The Widower's Tale_, Julia Glass (2/3rds read)

Once again, I read this for my book group in Mayberry, NH (<-- not its real name). This book generated a great conversation, but none of us really liked the characters and we felt the plot was sort of a catchall for a bunch of Issues (like _a lot_ of Issues) and the characters were marched through the plot with no real development. We thought it was long, altho we disagreed on whether Percy Darling was funny/appealing or not, initially and as the book progressed.

I have a general objection to books about ecoterrorism, because I just don't see it. Like facial recognition actually working, it occurs in fiction far more often than In Real Life.

I _thought_ there was a timeline problem with 4 year old Rico, adopted from Guatemala, however, if the book is set in 2007/2008, his existence as the adoptee of a 51 year old single mother is not a problem. The book was published in 2010, and books are generally largely complete a couple years before they are published through traditional publishers, so this is compatible. Mitt Romney is mentioned as being on his way to Utah, which is a little confusing, however, gay marriage and the Massachusetts health care laws are both components of the plot, so this all fits with a 2007/8 time frame. The fact that this novel really only makes sense if it is set within an approximately 36 month time frame is a little weird (references to Obama mean it can't really be pushed before 2006; Rico's presence and age makes it hard to push it much after 2009).

There were slightly more difficulties within the group keeping track of the characters and their relationships to each other, than is typically the case. There are always some problems (forgetting character names, etc.), but it was kinda bad with this book because of the character development problems, the huge size of the cast, the lack of well defined protagonist(s), etc.

It's kind of awful. I don't recommend it. I only read the first 2/3rds (or a bit more) of the book. I don't know why people love Julia Glass novels; presumably her audience is Not Me.

A Few Remarks on Germany's Competition Law

First: why?

http://the-digital-reader.com/2014/06/24/amazon-faces-antitrust-complaint-germany/

or

http://www.nytimes.com/2014/06/25/business/international/amazon-accused-in-Germany-of-antitrust-violation.html

or

http://www.spiegel.de/kultur/literatur/boersenverein-legt-beschwerde-beim-bundeskartellamt-ein-a-977153.html

All basically say the same thing: a publishers' trade organization has laid a complaint against Amazon for behaving badly, with the German agency regulating competition.

From NYT coverage: "The association, which counts 3,800 members, argues that while Amazon does not fit into traditional definitions of a monopoly, its sheer size and the dependence of publishers on the services that it offers to readers, gives it tremendous clout. The publishers contend that Amazon’s action should be considered “extortion.”" and "Further, the association argues, because many readers use Amazon as a modern card catalog to explore which books are available, if an author is not listed, a reader would assume that writer has not published any books. “Whoever is not listed on Amazon doesn’t exist in the eyes of a reader,” the association said."

Here is a summary of German competition policy:

http://www.thebhc.org/publications/BEHprint/v021/p0257-p0269.pdf

It is helpfully broken up into before and after our Occupation.

Like many developed and developing nations who were never England or the US, the German government encouraged vertical integration in firms to improve their position in the world economy. They also encouraged cooperation among firms for much the same reason. When we could write their law with a heavy hand, we forced Germany to unwind this vertical integration in the name of open/free trade (the article does not mention war-specific issues involving these large vertical enterprises, altho I suspect my husband will, because he read a book about Krup, which I've probably spelled wrong).

So the first point to notice here is that the German government inter-operates with German firms historically and today in a way that just doesn't happen in the good ole U.S. of A. The only thing that changed that was us, and it didn't exactly stick. The law we wrote was replaced by a different law in 1958. Under that law, cartels are prohibited but with exemptions (so that's different from the US, where cartels are just per se no go). As with US law, German law seems to recognize that in the early stages of a market, there might be a high degree of concentration. This law did not control mergers. After 1973, there was another law that did control mergers, but that would appear to not relate to Amazon, as a single firm. While the law attempts to curb abuse, it does so through merger control to prevent high degrees of concentration; I don't see anything obvious here relevant to the kind of market dominance which Amazon, er, enjoys.

There is also a pre-WW1 law that may apply, if Amazon's business practices are found to violate "good morals", including non-performance. That is, Amazon's failure to ship Bonnier or Hachette product promptly as part of a negotiation might be construed as non-performance and thus against this law. If this were found to be the case, Amazon might be subject to an injunction (hey, perform, you monkey!) or required to pay damages. I'd bet this is the legal theory that the complaint to the Bundeskartellamt is operating under.

I'm not a lawyer. I'm not German. My German is really not up to this task, but I'm gonna pursue it for a while anyway. Expect edits, or a follow-on post.

But I will say this.

What kind of damages do you think anyone might deserve as a result of a Bonnier published author not being listed in Amazon.de, or suffering from reduced sales over a period of time? Damages for lost sales at Amazon? Calculated how? Damages for lost sales ANYWHERE? Remember, the argument is that people would look it up, not find it, and assume it didn't exist, so lower than expected sales could be attributed to Amazon, even if the lost sale was at a bricks and mortar store. Or the putative lost sale. And should that be for the author or for the publisher or the bricks and mortar store?

Do you think Amazon should receive an injunction requiring them to list Bonnier books, even if they are unable to reach contractual agreement with Bonnier on the terms under which those books will be sold to Amazon and/or listed to the public? Should they be required to _sell_ books that they are unable to come to agreement with Bonnier on a price to be paid?

We have case law in the United States about whether a company can be required to continue to engage in business at which it cannot make a profit. The question arose completely legitimately (railroads, as my regular readers already know) -- this isn't some weird hypothetical. Back in our weak federal government days, local and state governments were fully prepared to _force_ corporations to engage in business that was guaranteed to be unprofitable at the rates those governments said they could charge. I don't know whether or not this dispute is generating a comparable situation, but it's at least possible.

At least here in the US, lots of people have the right to call up their State Attorney General or the FTC (or go to their website) and file a complaint. Human people and corporate people and NGO people and trade association people. I'm assuming that it works roughly the same way in Germany, altho I wouldn't be too surprised if you told me that the German government is a wee bit less open to random members of the general public clogging up the works with demands and requests and general craziness. I think that the trade association's complaint is exactly that: a complaint. I think the legal theory it is operating under is kinda suspicious (given that Amazon has essentially reverted to its earliest business model for fulfillment, I have a hard time construing that as "non-performance", and arguing that the catalog is somehow a public utility for looking up what books exist just blows my tiny little mind. I mean, I know I worked hard to make it that way. And every time someone told me they quit paying Bowker and just used Amazon instead warmed the cockles of my heart, whatever a cockle is. But regulating the catalog as a utility? Are you fucking kidding me?). I think the idea that anyone is going to like the possible remedies, even if the theory were accepted, is risible.

But hey. I'm not a lawyer. And I'm not German. We'll just have to watch this play out.

Okay, just _one more thing_, says the woman in the wrinkled coat. If the Bundeskartellamt did cough up a favorable opinion and an injunction or damages award, could Amazon appeal through WTO? Because _that_ would be hilarious.

A Pointer to Relevant EU Competition Policy

http://ec.europa.eu/competition/consumers/abuse_en.html

I have to say, Hovenkamp really provided a great base for which to understand this stuff.

Backing up a level:

http://ec.europa.eu/competition/consumers/what_en.html

On this list, the only one which would obviously apply to Amazon vis a vis Bonnier is abuse of a dominant position.

The abuse list has three categories: tying, charging too much, and predatory pricing. Amazon isn't doing any of those things in its dispute with Bonnier.

Just as virtually all of US case law involves abusive sellers (monopoly), apparently this is also true of European law. And just as the major accusations against Amazon in the US involve Amazon being a bully towards its suppliers (monopsony), apparently this is also true of European law.

Honestly, I will be surprised if the German publishers trade organization gets anywhere at all with their complaint. Very, very surprised.

_Amber Beach_, Elizabeth Lowell

I _think_ this is a reread, but honestly I am not sure.

In any event, set in the San Juans/Anacortes (wooot! Home turf, baby! My people, oh, fucking never mind, you do not care. But I like books set in the San Juans), Honor Donovan is trying to find her brother Kyle. She thinks he is hiding somewhere in the San Juans, on a tiny little island -- not sure which one -- not served by the ferry system. Alas, as a result of a traumatic boat ride as a young person, she never learned how to drive a boat, so she has to hire someone to teach her.

Jake Mallory is about to lose the business he worked so hard to build, because the Russian Federation thinks he stole something. Jake thinks it must have been his partner/liaison Kyle. Jake doesn't tell Honor this when he takes the job driving the boat for her.

Antics ensue. Lots of people show up looking for Kyle. They follow Honor and Jake around. Honor and Jake are attracted to each other but Honor is stressed and Jake figures Honor is gonna be way mad when she figures out he isn't just some random boat driver.

The thing which was stolen is possibly a panel from the Amber Room, or maybe a copy of same, so, basically a very similar plot to _Tell Me No Lies_, altho not identical. On a political level, identical: random groups of people sneaking around with weapons in the dark AND different parties benefit depending on whether the panel exists, where it is found and whether it is a fake or not. On a personal level, a little different: Honor isn't obsessed with honesty, and Jake lies to her at least through omission.

SPOILERS!

Yes, Honor gets to whack someone on the head with a half pound weight that she casts. All through the book, if you're like me, you're going, oh, please please please let her hit someone really hard with one of these things. And she gets to. Yay! I wish it had been a man instead of a woman; make of that what you will.

While this book is not as old as _Tell Me No Lies_, the date on it is pretty damn clear. R. and I are engaged in a discussion of how possible is it to date the time frame in which a novel is written vs. when it is putatively set, and the implications for teaching literature in a world in which there are approximately equal numbers of readily available historicals and "contemporaries" set in a given decade.

Buyer Power and EU Competition Policy

Expect edits.

http://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Fachartikel/Buyer%20Power%20in%20Competition%20Law.pdf

"However, the economic literature has developed some explanations on why, under certain circumstances, buyer power can also have investment incentive effects, and thus positive welfare effects. A large, powerful buyer could thus be prepared to share the high initial investment costs of a product because th
is could also increase his own profit; any free rider behaviour, which smaller buyers might possibly adopt, would be less likely in the case of large buyers. Furthermore, if they are faced with powerful buyers, suppliers might have a greater incentive to invest in the quality and brand of their product in order to increase their bargaining power vis-à-vis these buyers."

That could be considered a straightforward description of the development of kindle.

This seems relevant -- Amazon may dominate under this definition:

"According to the Berlin Higher Regional Court’s fundamental decision in the Coop/Wandmaker case, only actors who can influence the opposite side of the market as a whole can “dominate” the market 10. It therefore remains to be discussed to what extent the partial proof that a greater share of the supplier
depend on one powerful buyer can be used as an element for proving the existence of market dominance."

22% shows up in the next paragraph. Yeep.

The idea that a powerful buyer could be countervailing shows up, but then has problems itself.

Page 9, tho, is startling! "Purchasing agreements with exclusive purchase commitments were considered per se to be anti-competitive. The courts were of the opinion that even when there was no explicit purchase commitment, the freedom to act (and therefore competition) was restricted where a purchasing agreement resulted in a maximum price agreement. This case-law did not differentiate between a restriction of supply or demand competition. Consequently, it envisaged the one type of competition as a mirror image of the other. Accordingly, agreements between buyers on maximum prices and agreements between suppliers on minimum prices were to be assessed alike." Huh! But I don't know if it applies; Amazon is acting alone -- they are not coordinating with other buyers. I had no idea there were issues in Germany with minimum prices set by suppliers?

But then it turns out that buyer agreements aren't really a problem -- The Commission is only worried when a buyer fails to pass the savings along, and that hurts other purchaser competitors. Not what is happening here.

Heh heh on page 12: "Under the aspect of commensurability of advantages, it remains difficult to distinguish an anticompetitive advantage from a merely low price." Wow. Just like here!

I really sort of expected German law to be dramatically different and more protective of suppliers. Guess I was wrong!

"The European Commission pursues a competition policy which is aimed predominantly at maximising consumer welfare. Accordingly, it is distinctly more lenient of restraints of demand competition than it is of those that affect supply competition. With an eye on the end consumer, the Commission focuses in its assessment mainly on the effects in downstream sales markets. ... Detriment to suppliers caused by the exercise of buyer power does not necessarily go hand in hand with detriment caused to end consumers downstream of the relevant market."

Just 'cause some publisher gets harmed, doesn't mean the reader gets harmed, so Amazon is allowed to Behave Badly, for suitable definitions of Behaving Badly.

Wal-Mart shouldn't decide who gets to be a manager based on gender. Amazon should make sure its working conditions don't kill people. But buying it cheap and moving it in job lot is a-ok.\

Altho page 13 would appear to take some of this right back. Confusing.