Professional Association versus Trade Association

Would the AMA be more like a trade association if they suddenly began admitting drug company representatives as AMA members with the full membership rights to vote, be committee members and become members of the executive board? Why not? It’s the “American Medical Association” not the American Doctor’s Association, right? So anybody interested in medical things ought to be able to join, right? So why can’t drug reps and medical supply reps join that organization? Interestingly, the doctors have begun to see the ethical problems posed by their longtime close relationship with the drug company reps, and painfully begun a separation process (see NY Times article from 2007).

Would the AALL be more like a trade association if we changed our bylaws so that vendor reps had all the membership rights that librarians have? Would the antitrust issues that the specialist lawyer spoke about, concerns over price-fixing and rigging markets become more of a concern with an association if the consumers as well as the providers were full members of the association? Maybe we already have become more like a trade association and just didn’t notice.

I don't know if we need a scandal or some big books to wake us up to the problems that we have between law librarians and our vendors and publishers. We depend on each other, just as doctors and drug companies do. But there needs to be a bit more arms' length, and bit more care about the appearance, as well. And it gets difficult to maintain both the arms length and the appearance when everybody is a member of the same association and everybody is on the decision-making, even when they can be pressured, subtly or not, by their employer, against their own better judgement.

I like and I respect as individuals many colleagues who work or have worked for vendors. It does not make a librarian (or non-librarian) a bad person to work for Lexis or Thomson-West or any other vendor or publisher. But I can see very easily that if I worked for one of these outfits and then I were on a committee at AALL, and my boss came to me to lay some pressure on me about an outcome, I might feel a lot of concern about my job and my family! How much more would this affect our association if the position were on the executive board?

Wait, just a darned minute... the sky isn't falling!

I was flipping through the May 1, 2012 issue of Library Journal, when I was amazed to see a very short item in News Desk (page 11 in print) about the Libraries Online Incorporated (LION) a consortium of 25 Connecticut public, academic and school libraries boycotting new purchases of e-books from Random House. There is actually a fuller story online at Library Journal's Digital Shift. On March 2, Digital Shift covered a huge price increase, of as much as 300%, imposed by Random House on libraries buying their e-books. An e-book that cost $40 one day jumped to $120 the next, while the print version remains at $20 with the library discount! Random House is the only large publisher to make its e-books available to libraries without onerous restrictions, according to the article, but this is their rationale for the price increase:

“We believe our new library e-pricing reflects the high value placed on perpetuity of lending and simultaneity of availability for our titles,” said Stuart Applebaum, a Random House spokesperson. “Understandably, every library will have its own perspective on this topic, and we are prepared to listen, learn, and adapt as appropriate,” he said.

“Simultaneity” here means that Random House’s titles are available to libraries on the same date the retail edition is put on sale. It is not referring to simultaneous, multiple user access. The model remains one book, one user.

The reader can see the entirety of the Random House spokesperson's statement at the end of the Digital Shift article linked above.

To return to the boycott. The LION boycott was voted unanimously by its members on March 20, and communicated to Random House by LION president Richard Conroy. This boycott follows a similar boycott by a consortium of public libraries in Nova Scotia the South Shore Public Libraries, which voted to boycott purchases of new e-books from Random House by April 3, when this article ran in the The Chronicle Herald News. I think the issue is nicely put by the chief librarian Troy Myers:

"I don’t want to pick a fight with them, but their pricing’s unfair and I think they need to change it," chief librarian Troy Myers said Monday. (snip)"It’s public money we’re talking about here, and for us as a board to be good stewards of that money, we can’t justify paying these prices,"

(snip)
Library board member Alan Wilson ... fully supports the boycott, saying it's important to take an early public stand.

"If this is a trend and not a single publisher, it’s something to be very concerned about," Wilson said.

"It’s a question of equity and fairness," he said, for both the authors and readers, and the publisher should have discussed the issues with the Writers’ Union of Canada and the Canadian Publisher’s Council.

"It seems ill-considered, it seems ill-timed and unilateral.""

I was quite surprised that these 2 groups were coming out as consortia, organizing a boycott against a publisher because of a pricing issue. Because, you know, we've always been told by our professional organization that if we acted as an organized group of librarians to act against a publisher on any issue of pricing, for instance, or other consumer issue, for instance, we might be accused of ...

ANTITRUST VIOLATION

That we, the consumers would somehow be organizing as a trust or bloc to somehow illegally manipulate pricing.


And that's why we, as AALL members, for instance, are supposed to sign some sort of agreement before we go on the AALL lists, right? That we won't discuss

THINGS that might violate ANTITRUST

or wait...

is that really just about

making some really big publishers

UNCOMFORTABLE?

E-book Market Shake-up as Justice Pursues Anti-Trust

The New York Times reports that the Justice Department has filed suit against Apple and six publishers of e-books on anti-trust grounds that they colluded to set pricing. Attorney General Eric Holder alleges that the group met at expensive restaurants and "double deleted" e-mails in an attempt to hide their efforts to fight back against Amazon.com's low pricing of e-books. Led by former Apple boss Steve Jobs, they agreed to set their e-book prices for the iPad between about $12.99 and $14.99 compared with the typical $9.99 Amazon e-book Kindle price. Using the popularity of the iPad, the group hoped to fight back against the low prices driven by Kindle's popularity and Amazon's pricing.

The complaint alleges that the collusion caused

“consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid.”

Three publishers that were investigated, the Hachette Book Group, Simon & Schuster and HarperCollins, have already agreed to a settlement that will most likely overturn their pricing model. Macmillan and Penguin Group USA, which were also named in the suit, have not settled. ... The publishers who have settled are required to end their e-book contracts with Apple and any other retailer with a “most favored nation clause,” which says that no other retailer can sell e-books for a lower price. For two years, the publishers are also prohibited from restricting any retailer’s ability to discount e-books.

Amazon appears poised to lower the prices for its e-books even further, which should be further pressure on the remaining competitors in the marketplace. There is a companion article in the Times about this, and concerns by some business analysts that Justice may be inadvertently setting up Amazon as a true monopoly in the e-book market.

AALL, Consumer Caucus, Transparency and Bad Advice

I have loved my association for more than 20 years. I joined in 1986, as a freshly minted, eager, hopeful (not quite so young) law librarian. And I have been a member of AALL ever since, as well as a member of whichever regional chapter I lived nearest. But, this is like a lot of marriages....

I have to say, honey, your bad habits are starting to really wear on me!

Were you always so damned conservative with your choice of counsel?!

And have you always been this sneaky?!

I hate to think you really meant to try to slip that little Antitrust Policy past me. But I just can't help but be a little hurt and yes, I have to say it, mistrustful.

I'm sorry, honey.

The magic is just not there any more.

The trust is gone. You blew it. When you started flirting so with those big vendors, I tried to laugh it off. You know, "AALL's just all excited with the annual meeting, and all...." And maybe I thought, "Well, we kind of need the extra dough." So, I was, I have to admit it, a little willing to let you, (ugly word) prostitute yourself with them.

Then, when the FTC folks came to ask you what you thought about antitrust problems if Thompson were to buy West Publishing, Oh, AALL, you sold your soul, not for silver or gold, but I think for the pleasure of shaking hands with somebody who told you they were important. Maybe they just bought you lunch.

You started turning your head when Thompson would rebuff the librarians who asked for pricing info for the AALL Price Index, and then, took Thompson's side against the librarians!

Lately, it sounded like we were getting some good from our counseling, babe! When the Executive Board okayed the (watered - down) mission for a AALL consumer caucus, I thought, "Hey, maybe the old magic is still there! Maybe I can get excited about my old association again!"

But then, ah, no! You pull this stunt with the secret Antitrust Policy. What am I to think, honey?

Let's think about the timing....

The Caucus was going to meet on July 25?

But the Executive Board was going to secretly vote on an Antitrust Policy on July 21. And what would that policy cover?

The following topics are some examples of the subjects which should not be discussed at Association meetings, either virtual or live:

1. Do not discuss current or future prices (be very careful of discussions of past prices).

2. Do not discuss what is a fair profit level.

3. Do not discuss standardizing or stabilizing prices or pricing procedures.

4. Do not discuss cash discounts or credit terms.

5. Do not discuss controlling sales or production or allocating markets or customers. (This applies to services as well as products.)

6. Do not complain to a competitor that its prices constitute unfair trade practices and do not refuse to deal with a company or individual because of pricing or distribution practices.

7. Do not discuss anticipated wage rates.

I fear our consumer caucus would be pretty much crippled, dear! And so slyly done!

And worst of all, I think this damn'd lawyer just copied and pasted out of the Antitrust treatise without stopping to think or find out any details about our relationship, honey. It looks like the fool just picked up the general law about trade associations very much like this blog post for Building Product Marketing Trade Associations. Take a look, sweetie, and see if the post doesn't look an awful lot like what that old attorney has been charging you an arm and a leg for advice!