Template:ConsultCE2014:A preventive competition policy against distribution monopolies and their abuse

8. A preventive competition policy against distribution monopolies and their abuse
Digital technology has enabled powerful non-market distribution channels and it has given an easier acces to publishing and distribution to individuals and small-size organizations. Meanwhile, one has witnessed a considerable reinforcement of distribution monopolies or oligopolies that appeared during the cultural industry era. If the fusion between Universal and EMI is authorized, the resulting group will control 60% of licensing for distribution in volume for musical recordings in the large European countries. Apple controls 70% of the digital distribution for musical recordings. Amazon and Apple hold each a monopolistic control on one of the two segments of eBooks distribution. Netflix has a strong dominant position in the digital distribution of movies in those countries where it is active. Often integrated vertically from publishing to final distribution, entering in agreements with telecommunication operators, these groups:
 * impose the economic terms and the conditions of distribution to authors and small publishers,
 * restrict usage terms for the public often beyond what is desired by authors and artists,
 * block in part the evolution towards an increased diversity of attention to works which should develop in the digital era.

Monopolies or dominant positions in physical distribution or live performance programming, such as LiveNation's for concert tours or Amazon's for paper book, record and DVD sales restrict the ability of artists and authors to cash on the notoriety they have obtained on the Internet.

This situation has developed through a major failure of competition policy. Efficient competition policy must be preventive, in particular in the digital world where once installed, dominant positions are incredibly difficult to challenge, due to network effects. In particular, it is important that any distribution platform can distribute contents under terms that are as favourable than those conceded to its largest competitors. Compulsory collective licensing for digital distribution is the natural instrument to obtain this result. However, one can not stop there. In France, a recent law has been adopted to impose a unique price for eBooks, that can be set by the publisher. It is incredible that the government advisers and the MPs did not understand (or feign to not understand) that this would lead to results exactly opposite to those that were claimed to be aimed at. It will permit publishers to agree among themselves on keeping the price of eBooks high and implementing a policy of higher prices for big sellers. This will institutionalize an unfair competition between these large publishers and their smaller competitors. By presenting the eBook as a substitute to the paper book and not a complement, one will undermines their potential synergy, that rests on a low price for eBook and on combined offers. Concerning the positive effects on bookstores that had motivated an earlier law on the unique price of paper books, they are non-existent for eBooks, despite efforts of some alternative publishers to reintroduce bookstores in the value chain of eBooks.