The New Convergence: Securing the Freedom to Read in the eBooks Era
The dusty world of books is in turmoil. eBooks are shaking up the publishing industry, changing the way we publish books, acquire books, and read them. eBooks were first introduced in the beginning of the 2000s when Google debuted its massive book scanning project.1 Yet, it wasn’t until Amazon Kindle was announced in 2007 that eBooks finally evolved as real substitutes to printed books. Today, tablets, smartphones and other types of reading devices display books in a format that resembles printed books and mimics the book reading experience (i.e., pulling a book from a virtual bookshelf or flipping through the pages). Book publishing and bookselling are changing, too, and old players are being called on to adjust to this new digital environment. Publishers, retailers, distributors, and libraries are all searching for new models that would preserve their roles in the emerging new world of eBooks. If they fail, they might fade away.
The book industry is the most recent content industry to go through the digital shift. Digital text predated the visual images on the World Wide Web, followed by MP3 sound files and digital audiovisual content. The recording and movie industries faced similar shifts and were challenged by distributed production and distribution of content.2 These industries launched a legal campaign against file-sharing facilities and individual infringers, seeking to retain their dominant role in the emerging digital markets by relying on their copyrights.3 The case of eBooks is apparently another banal chapter in the digital wars, creating a large number of legal disputes.4 Rights holders are once again exercising their copyrights to retain their role in this emerging market. Yet, this chapter is different, and therefore could give us some insight on the challenges we are facing today in the information environment.
The eBooks case is interesting because the hundreds-of-years-old book industry is being challenged by online intermediaries who threaten to replace it. The emerging market of eBooks makes room for new players, such as Amazon, Google and Apple, each vying for dominance. These mega-platforms introduce new technological and business innovation and bring new opportunities for competition in an overly concentrated market.5 As these new mega-platforms continue to grow, however, publishers and booksellers might wither.6 eBook mega-platforms are also raising new concerns regarding competition and consumer welfare. Access to books is a classic case of access to knowledge (A2K), posing new challenges for policymakers, such as the freedom to read without surveillance, the intellectual freedom to access a wide range of books of different origin and perspectives, and equal access to educational materials.
The purpose of this essay is to explore some of these challenges. Part II describes the changing eBooks market, where content suppliers may exercise control over access, content and users. Part III analyzes the implications of this new convergence for A2K and freedom. Part IV focuses on legal strategy.
II. The New Convergence: Merger of Control over Content and Distribution Channels
The emergence of eBooks is not simply a new format, but a sea-change. It opens up new opportunities for authors to directly communicate with their readers.7 It also transforms the essence of books from a commodity—printed artifacts produced by publishers—into a service.8 Ownership of physical books guarantees perpetual access and secures the freedom to use the book in any way and for any purpose, subject to copyright limitations. The shift to services may, however, jeopardize the freedom of readers and libraries and increase their dependence on eBook providers. Overall the shift from products to services may carry significant implications for A2K.9
eBooks are also changing the structure of the book industry, marginalizing some roles of old intermediaries—publishers and bookstores—and introducing new players. Publishers were once the sole experts in identifying commercially successful manuscripts, producing a “master copy,” printing and managing a stock of printed copies, marketing books, and distributing them through various distribution channels. The radical reduction in the cost of producing and distributing eBooks is shrinking these roles of publishers and reducing their advantage as a one-stop-shop for authors seeking to publish a book.10
Online sales of digital content is the expertise of online retailers such as Amazon and Apple, who sell eBooks alongside other types of content, including music, movies, and apps. But online intermediaries are not simply offering new distribution channels. They are also playing a growing role in publishing. Mega-platforms such as Amazon, Google, and Apple have become publishers, producers, distributors, and marketers of eBooks.11 For example, Amazon’s Kindle Direct Publishing (KDP) offers authors a whole range of self-publishing options through the Amazon Kindle Store.12 Similarly, Apple offers self-publishing content with its iBooks and iBookstore apps.13 This is blurring the distinction between online retailers and publishers. Some services, such as Amazon Kindle book rentals are also blurring the distinction between a retailer, a publisher and a library.14
The rise of these eBook intermediaries is characterized by convergence of control—specifically, control over access, content and users. One type of convergence is the merger of publishing and distribution, which may affect which eBooks become available to the public and how. When mega-platforms act as both publishers and retailers, they are likely to have a vested interest in the books they publish and use their market power as distributors to give priority to their own published content.15 Similarly, a retailer that enjoys a dominant position may use publishing agreements to acquire exclusivity and push competing retailers out of the market.16 Free access to eBooks might be viewed as a threat to commercial interests and, therefore, an eBooks retailer that is also a publisher may further cut out libraries by refusing to sell them eBooks for e-lending.17
This merging of control over content and distribution channels may also be the outcome of partnerships. In recent years we have seen a growing partnership between content providers and online access providers.18 One example is the YouTube Content ID system, which allows copyright owners to monetize their content on Google.19 Another example is the settlement between Google and book publishers following the class action brought against Google for scanning millions of copyrighted books (the “Google Book proceedings”). According to the amended settlement agreement, publishers would share with Google online revenues connected to the display of scanned books. Partnerships between mega-platforms and copyright holders, who hold exclusive rights to use the books, may stifle competition. This concern was echoed by the court, in the Google Book proceedings, and among other reasons, led the court to reject the settlement.20 Recently, however, the parties reached an alternative agreement, which finally settled their legal dispute. Unfortunately, the details of this agreement remain confidential.21
A second type of convergence in the emerging online market of eBooks is the merger of content and access. Mega platforms not only control the distribution channel, but also the format in which eBooks become available. When retailers supply the reading devices (e.g., Amazon’s Kindle, Apple’s iPad), they determine how eBooks become available: whether it could be read in privacy, whether surveillance could be switched off, whether its format will be interoperable with other reading devices, and what license restrictions would apply.
Finally, mega platforms in the eBooks market often control both the supply and demand. Book publishers in the print world had no direct relationship with buyers and retailers knew very little about particular readers. By contrast, eBook retailers establish direct and ongoing relationships with their users. This ongoing relationship is established at the downloading point, when eBooks are purchased, and often continues through the ongoing connection of the reading devices. Kindles, iPads, tablets and smartphones are capable of collecting a large volume of data on users’ purchasing and reading habits.22 Such data might be used to better serve consumers’ preferences, but also to shape consumer preference. This data is invaluable for designing marketing strategies and promoting demand for particular books.
III. The eBook Market and the Freedom of Readers
The new convergence consolidates control over different aspects of supply and demand at the hands of a small number of mega platforms. eBook intermediaries may control the market at both ends: the push (signing authors) and the pull (managing demand by users). This shift has taken place in a market that is already relatively concentrated and dominated by a small number of global book publishers.23
Some consequences are obvious: controlling the supply chain, both production and distribution, enable platforms to exercise a high level of control over the price of eBooks. The lack of price competition in eBooks could be effectively addressed by antitrust law, as proven by the recent price-fixing proceedings against Apple and five major book publishers for price coordination.24
Other ramifications of this convergence are tied to the special character of books. Access to eBooks is a classic case of access to knowledge, raising concerns that go beyond the cost of access. Books are ancient carriers of knowledge. Limits on access to books may carry direct implications for fundamental civil rights, such as the ability to learn and acquire education, the ability to participate in the workforce, the ability to participate in politics and make political choices as informed citizens, or the ability to learn about one’s health and make informed decisions.
Competition law often focuses on consumer welfare. The focus on books as commodities views readers as consumers rather than as citizens, and therefore may overlook some important implications for A2K.
The cost of A2K matters, of course. High costs of scientific journals, for example, have become a real barrier to A2K, especially for bloggers and civil society activists who cannot benefit from academic or corporate subscriptions.25
Another issue that arises from the new convergence is the freedom to read without surveillance. Surveillance may cause a chilling effect on readers, as people may refrain from seeking specific information and reading particular materials, fearing that their interests might be monitored and recorded. Freedom of expression also involves the freedom to explore any cultural, religious, professional, political, or any other type of resource, without the knowledge of others.
Surveillance may harm the virtues of reading. Reading a novel, for example, involves an intimate interaction, where a reader is asked to rely on his or her own cognitive insights and emotional experience in order to make sense of the text. Readers are given the opportunity to engage in dialogue through the text with the intimacy of the other. Therefore, the ability to read in privacy could be important for constituting ones identity and for developing empathy to others. These processes are essential for developing an empowered and accountable citizenry.
Intellectual freedom is another concern. The freedom to access books of different origins and different perspectives pertains to fundamental liberties such as freedom of expression, intellectual freedom, and privacy.26
Access to books is essential for exercising citizenship in the twenty first century. As information becomes crucial to every aspect of everyday life, access to information may affect our ability to participate in modern life as independent, autonomous human beings. Therefore, there must also be some room for free (as in freedom) access to books, on a nondiscriminatory basis. If eBooks are not offered to libraries for e-lending, public libraries cannot facilitate appropriate public access.27
IV. Securing Freedom in the Digital Era
Regulators have not shied away from intervening in the eBook price-fixing battles.28 It remains to be seen, however, whether this type of intervention will promote competition in this fast-growing market, where Amazon enjoys dominance. At any event, antitrust laws cannot provide full coverage against the new threats to the freedom of book readers in the eBook era.
The eBook market is still evolving and doing so with many moving pieces: new players, dynamic business models, and emerging technologies. It is clear that any legal policy should facilitate the development of competitive business models that would support the commercial interests of authors, rights holders, and online facilitators. At the same time, however, legal policy should also safeguard the freedom of readers and secure public access to eBooks.
Constraints on the freedom of digital users may take different forms. There are constraints by design, such as built-in surveillance, the lack of control over a physical copy that may expire anytime, or the limited usability of eBooks to a particular device. Other restrictions are set by licenses. With the shift from commodity to service, the scope of readers’ rights is defined, for the most part, by a license. A license may define the expiration date or provide a right of perpetual use. A license may prohibit lending or resale of eBooks, restrict permissible use to designated devices, or permit the making of backup copies.29
The greatest challenge for legal policy is to address such limits on the freedom of book readers at all levels. Therefore, the focus of legal policy should move beyond attempts to regulate particular behavior of different market players, and refocus on the steps that are necessary to safeguard the rights of users of digital content.
First, it is necessary to articulate the rights of eBook readers. Access to books may not only involve consumer rights, but also civil rights such as autonomy, privacy, freedom of speech, and the right to education. Defining the scope of these rights would require exploring what it means to be a free person in the information era. For example, freedom of speech calls for protecting a right to read books free of surveillance. Readers should also have a choice of reading anonymously.30 eBook readers should have a right to privacy and, therefore, be offered a choice when data is collected on their purchasing and reading habits. Readers should also have a right of perpetual use and personal use with any other materials.
Second, it is necessary to design the institutions that would facilitate the freedom of readers. Standard End-User License Agreements should not override some rights, while other rights might be negotiable. Safeguarding readers’ freedom may also involve corresponding duties of content providers, such as giving appropriate notices or enabling technological measures necessary for readers to exercise particular rights. Public libraries may also secure some rights for eBooks readers by defining special privileges to libraries with respect to lending eBooks and offering a virtual space for freedom of access.
Finally, innovative technologies may protect users against some threats on their civil liberties and stimulate competition among online players. For example, some applications may enable data portability and self-help measures may protect against surveillance. Legal policy should focus on removing legal impediments to developing such technologies.
* Professor of Law and the founding director of the Haifa Center for Law and Technology, University of Haifa Faculty of Law. Thanks to Toval Kein and Julia Weinshenker for research assistance.
1 Project Gutenberg predates the Google Books Project, starting during the 1970s where full texts of public domain books were made available online.
2 The music and movies industries were challenged by distributed capabilities of the many: file sharers and user-generated content. The media was challenged by bloggers, and news forums, but also by mega-platforms, such as news aggregators (e.g., Google News) and social media such as Twitter. Neil Netanel, New Media in Old Bottles? Barron’s Contextual First Amendment and Copyright in the Digital Age, 76 Geo. Wash. L. Rev. 101, 113 (2008).
3 See Jessica Litman, Digital Copyright (2006); Niva Elkin-Koren, It’s All about Control, in The Commodification of Information 79 (2002).
4 For instance, the Authors Guild and five publishers brought a class action against Google, alleging copyright infringing for scanning copyrighted books. See Authors Guild, Inc. v. Google, Inc., No. 05 Civ. 8136 (DC), 2011 WL 986049 (S.D.N.Y. Oct. 28, 2008). The Authors Guild also brought a lawsuit for copyright infringement against the HathiTrust repository, a shared digital preservation facility that includes in-copyright books digitized by Google and serves more than sixty universities and higher education consortia. See Authors Guild, Inc. v. HathiTrust, 11 CV 6351 (HB), 2012 WL 4808939 (S.D.N.Y. Oct. 10, 2012). Academic publishers brought lawsuit against Georgia State University for copyright infringement in placing excerpts from their copyrighted textbooks in electronic reserves (e-reserves). See Cambridge Univ. Press v. Becker, No. 1:08-CV-1425-ODE, 2012 BL 119127 (N.D. Ga. May 11, 2012).
5 The book publishing industry went through a process of consolidation, from about ten dominant publishers in 2010 to the big six in 2012 and, following the merger between Random House and Penguin, big five in 2013. Adam Davidson, How Dead Is the Book Business?, N.Y. Times, Nov. 13, 2012, http://www.nytimes.com/2012/11/18/magazine/penguin-random-house-merger.html?_r=0; see also Claudia Leobbecke, The Emergence of eBooks: Just Another Media Industry Joining the Converging Digital World? An Explorative Study on User Preferences and Industry Structure Change (2010), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1986386
6 But also the rise of new publishers like Smashwords.
7 Niva Elkin-Koren, The Changing Nature of Books and the Uneasy Case for Copyright, 79 Geo. Wash. L. Rev. 1712, 1714–25 (2011).
8 This shift from selling commodities (books, records, CDs, DVDs) to services takes place in other sectors, too, such as in music (e.g., Spotify) and movies (e.g., Netflix and YouTube).
9 See infra Part III.
10 Elsewhere I have described the decline of publishers, arguing that some of the traditional functions of publishers were disentangled by the introduction of eBooks. See Elkin-Koren, supra note 7, at 1725–28. With digital copies and print-on-demand, the function of publishers in managing large stocks and inventories and in allocating risk is declining. The need to make risky investments upfront also forced publishers to serve as gatekeepers—selecting which manuscripts would be published. But the economic logic of online distribution provides incentives to make everything available.
11 On Google as a publisher, see Eugene Volokh & Donald M. Falk, First Amendment Protection for Search Engine Search Results, 8 J.L. Econ. & Pol’y 883 (April 20, 2012), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2055364 (arguing that Google is a publisher).
12 See Kindle Direct Publishing, Amazon, https://kdp.amazon.com/self-publishing/signin (last visited Feb.12, 2013). Authors earn seventy percent of the royalties from the sale of such books.
13 See iTunes Partner Programs–Book Publishers, Apple, http://www.apple.com/itunes/content-providers/book-faq.html (last visited Feb. 12, 2013).
14 Kindle Textbook Rental offer access to an eBook for a limited time, paying a lower price only for the duration of the rental. See Save up to 80% with Kindle Textbook Rental, Amazon.com, http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000702481 (last visited Feb. 12, 2013).
15 For instance, see the allegations against Google for creating a “search bias” by unfairly promoting its own content over those of its competitors (such as Yelp). The FTC conducted an extensive investigation into these allegations and recently concluded that “[t]he totality of the evidence indicates that, in the main, Google adopted the design changes that the Commission investigated to improve the quality of its search results, and that any negative impact on actual or potential competitors was incidental to that purpose.” See Google Agrees to Change Its Business Practices to Resolve FTC Competition Concerns in the Markets for Devices Like Smart Phones, Games and Tablets, and in Online Search, Fed. Trade Comm’n (Jan. 3, 2013), http://www.ftc.gov/opa/2013/01/google.shtm.
16 See, e.g., Mark Coker, Amazon Is Playing Indie Authors Like Pawns, Self Publishing Advice (2012), http://selfpublishingadvice.org/blog/amazon-plays-indie-authors-like-pawns/ (warning against Amazon’s use of exclusivity agreements with self-published authors).
17 See Civic Agenda, Libraries, eLending, and the Future of Public Access to Digital Content (2012), available at http://www.ifla.org/node/7447.
18 Innovative IT companies were one of the main defenders of open access in the information environment and played a key role in safeguarding free flow of information and civil liberties in the digital environment. Merging the interests of content owners and content distributors might weaken the ability of the later to promote online freedom.
19 See Content ID, YouTube, available at http://www.youtube.com/t/contentid (last visited Feb. 12, 2013).
20 See Settlement Agreement, Authors Guild, Inc. v. Google, Inc., No. 05 Civ. 8136 (DC), 2011 WL 986049 (S.D.N.Y. Oct. 28, 2008).
21 Claire Cain Miller, Google Deal Gives Publishers a Choice: Digitize or Not, N.Y. Times, Oct. 4, 2012, http://www.nytimes.com/2012/10/05/technology/google-and-publishers-settle-over-digital-books.html?_r=0.
22 Alexandra Altery, Your E-Book Is Reading You, Wall St. J., July 19, 2012, http://online.wsj.com/article/SB10001424052702304870304577490950051438304.html (arguing that eBooks have “prompted a profound shift in the way we read, transforming the activity into something measurable and quasi-public.”).
23 See supra note 5.
24 The U.S. Department of Justice (DOJ) filed a suit against Apple and five major publishers for anti-competitive agreements and conspiring to raise the price of eBooks. This lawsuit was recently settled with all five publishers, leaving only Apple to fight the case in court. See United States v. Apple, Inc., No. 12-CV-2826 (DLC), 2012 U.S. Dist LEXIS 127034 (S.D.N.Y. Sept. 5, 2012).
25 Sandra Porter, How Much Does It Cost to Get a Scientific Paper?, ScienceBlogs (Jan. 9, 2012), http://scienceblogs.com/digitalbio/2012/01/09/how-much-does-it-cost-to-get-a/.
26 See generally Julie E. Cohen, Configuring the Networked Self: Law, Code, and the Everyday Practice (2012).
27 See Civic Agenda, supra note 17, at 2–3. This could also result from charging a prohibitively high price for eBooks. See a recent study by the Douglas County Libraries, comparing the cost of the most popular print books and eBook editions (showing that the price of eBooks for libraries is much higher than print, even though for the print edition, libraries are typically charged a few cents less per copy than consumers). See Douglas County Libraries, Pricing Comparison as of February 1, 2013, http://evoke.cvlsites.org/files/2013/02/DCLPricingReport2-1-13.pdf.
28 See supra note 24.
29 Licenses may also set limits on public e-lending by libraries, thus undermining their ability to serve their public function and securing free access guided by a professional code of ethics, committed to diversity, pluralism and freedom of speech. See Civic Agenda, supra note 17.
30 See Julie E. Cohen, A Right to Read Anonymously: A Closer Look at “Copyright Management” In Cyberspace, 28 Conn. L. Rev. 981 (1996).