How copyright law gives Amazon too much power over the book industry

I mostly agree with my colleague Matt Yglesias’s argument that Amazon is doing the world a favor by crushing book publishers. But there’s at least one way US law gives Amazon excessive power, to the detriment of publishers, authors, and the reading public: ill-conceived copyright regulations lock consumers into Kindle’s book platform, making it hard for new e-book platforms to gain traction.

To see why this is a big deal, it’s useful to remember how things worked before Congress changed the law in 1998. In the late 1990s, before the iPod, a variety of startups were experimenting with portable digital music players. None of these companies were big enough to get licensing deals with major music labels. But that didn’t matter, because customers didn’t need anyone’s permission to rip the music CDs they already owned onto their hard drives, and from there to their MP3 players.

This situation was good for innovation — it was easy to move from one MP3 player to another, and take your music with you — but music publishers hated it. They didn’t get an opportunity to sell the same music to customers over and over again. They also argued that the ease of copying promoted piracy.

So in 1998 they got Congress to pass the Digital Millennium Copyright Act, which made it a federal crime to unscramble encrypted content without the permission of copyright holders.

The law didn’t affect music CDs because it was too difficult to add copy protection to the well-established CD format. But all of the major media formats developed since the DMCA passed have taken advantage of the law. That’s why iTunes won’t let you rip your DVD collection the way it will rip CDs. Because DVDs are copy-protected, adding a “rip DVD” feature to iTunes would be a felony.

And while the law was passed at the behest of content creators, it also gave a lot of power to platform owners. If you buy a movie on iTunes, you’re effectively forced to continue buying Apple devices if you want to keep watching the movie. Tools to transfer copy-protected movies you’ve purchased from iTunes onto another platform exist, but they’re illegal and, accordingly, not very user-friendly.

Amazon has taken advantage of the DMCA too. Kindle books come copy-protected so that only Amazon-approved software can read it without breaking the law. Of course, software to convert it to other formats exists, but it’s illegal and accordingly isn’t very convenient or user-friendly.

And that creates a huge barrier to entry. People who want to create new e-reader apps or devices can’t do what MP3 startups did in the 1990s and offer to automatically import your existing e-books from Kindle, iTunes, or other major platforms. Instead, they have to start from scratch, creating their own e-book store and convincing all the major publishers to sign up for it.

Even more daunting, they have to convince customers to toss their existing e-book libraries and buy new copies of their e-books on the new platform — or split their time between multiple platforms.

Hence, the DMCA is increasing the already significant market power conferred by Amazon’s control of the most popular e-book platform. So if you’re worried that the company has too much control over the publishing industry, a good place to start would be to change the DMCA and give consumers the freedom to move content they purchased from one device to another.