For more than a year now, one of the worst kept secrets in the publishing world has been that Amazon shares information with publishers and authors that allegedly paints library e-book lending in a negative light. But in a message sent to library customers on August 27, Tom Mercer, senior v-p of digital products for library e-book vendor Bibliotheca, urged librarians to recognize and take that practice seriously, and to confront the challenges Amazon poses to libraries in the digital realm.

Citing Amazon's growing, decade-old publishing division, Mercer's message connects "evidence to suggest that in recent years, authors and agents have come to feel that the library market is eroding their revenue," with the recent negative developments in the library e-book market, suggesting the changes are likely due, at least in part, to "external pressures" being applied to publishers.

"I think it’s telling that Macmillan CEO John Sargent addressed his letter about the library model change to Macmillan Authors, Macmillan Illustrators and Agents," Mercer wrote. “If authors and agents are voicing concerns about library lending, where are they getting their data from? I doubt it’s from publishers, since a report on library lending is not part of an author’s royalty statement. There is only one company that has access to readers' digital retail purchases as well as library users’ digital library borrowing habits, and that is Amazon,” Mercer writes, concluding that it is “highly probable” that Amazon is using its data to suggest to authors and agents that libraries are bad for their retail sales.

“This is a major concern that we need to understand and face together as an industry," Mercer writes. "As long as data is shared with Amazon by library users, Amazon will spin that data to create concern, and publishers will be forced to alter their digital library lending models or risk losing key authors.”

Librarians have long long voiced their concern over Amazon's push into publishing, as Amazon digital content is generally not available to libraries; Amazon e-books are exclusive to the Kindle, and Amazon digital audiobooks are available exclusively through its Audible division. Further, Audible has been aggressively pursuing exclusive deals with major authors, as well as other publishers, such as Blackstone Audio, which recently struck a deal that denies public libraries access to new release audiobooks for three months.

In response to recent developments in the market, Mercer is urging librarians to “pressure their existing vendors” to terminate relationships, or to refuse to share data with Amazon.

“If Amazon won’t sell their content to libraries," Mercer argues, "then why should libraries share their data with Amazon?”

Though Mercer doesn’t mention any specific library vendors by name in in his message, the obvious inference is to market leader OverDrive, the only major library vendor that currently offers Kindle compatibility for e-books. Via OverDrive’s Kindle partnership, when a library user wants to read a library e-book on the Kindle platform, the user is delivered to Amazon, which takes over and manages the loan, and, of course, captures the usage data generated. Amazon also charges OverDrive a fee for the transaction, though OverDrive officials could not comment or confirm any details of their business arrangement with Amazon.

In a recent interview, OverDrive CEO Steve Potash told PW that he was sensitive to the growing concerns about Amazon’s market power, and was aware of critical comments from OverDrive "competitors" that lack similar access arrangements with Amazon. But Potash stressed that OverDrive’s Kindle compatibility was implemented at the request of librarians, who, Potash said, specifically asked for the ability to serve the “significant” percentage of U.S. readers who use the Kindle platform. And, he added, Kindle compatibility is opt-in at the patron-level, meaning that the choice of whether to read via the Kindle, or via another platform, including OverDrive's free Libby app, rests with the reader.

As long as data is shared with Amazon by library users, Amazon will spin that data to create concern, and publishers will be forced to alter their digital library lending models or risk losing key authors.

Mercer's message to librarians builds on previous statements he made at the 2019 ALA Annual Conference, in which he told Library Journal that Amazon was putting "pressure on publishers by sharing data with authors indicating libraries are the cause of lost digital retail sales." In response to those comments, an Amazon spokesperson conceded that Amazon does shares data (including OverDrive e-book lending data) with publishers and authors, but denied the company was seeking to torpedo the library e-book market. “We believe that public library lending is very important to society,” an Amazon spokesperson told LJ. “Publishers make their own business decisions regarding library lending.”

In a separate conversation at the ALA Annual Conference, however, Mercer told PW that Bibliotheca did at one point try, unsuccessfully, to secure Kindle compatibility for its CloudLibrary service (as have other vendors for their services) and that Amazon's resistance to cutting deals with more library vendors suggests that Amazon does not, in fact, support library lending. “If they really did think library lending was a great model for them," Mercer told PW, "clearly they would want to add a second player, like us, or they would have expanded [Kindle lending] into Canada.”

At ALA, Mercer acknowledged librarians' desire to serve patrons who prefer the Kindle platform, but suggested that sending public library patrons to Amazon—and the blurring of the line between library users and paying consumers that represents—has proven to be too fraught to justify. “[OverDrive] is providing information that is being used to directly undermine the industry,” Mercer told PW. “They are paying for the privilege of giving data to the competitor who is going to use that data to try to destroy their business. I don’t get it.”

Librarians, meanwhile, reacted coolly to the idea that they pressure OverDrive to cut ties with Amazon.

“Short answer, no, I wouldn’t want OverDrive to give up their Amazon connection—even though I think Tom Mercer’s views have enough merit that I might wish OverDrive would,” said St. Mary’s County (MD) Library director Michael Blackwell, an organizer of the ReadersFirst Coalition. “Amazon users know this way of getting content, so they continue to use it even though there are more private and I would argue better options on their devices. Tom is probably right about Amazon, but I’m not sure most libraries are going to follow his advice and lose users.”

Carmi Parker, ILS Administrator for the Whatcom County Library System (WA), who recently organized a response to Blackstone Audio after the publisher signed an Audible exclusive deal that denies libraries access to new release Blackstone audiobooks, also expressed reluctance. “My consortium’s Kindle usage hovers around 23% to 24%,” she told PW. “Kindle users are part of the reason we pay a premium to OverDrive. Why would we want them to disable that scenario?”

PW library columnist Sari Feldman, former executive director of the Cuyahoga County Public Library, and an ALA senior fellow for e-books and digital content, also urged caution. “While [Mercer's] statement may or may mot be accurate, library users often prefer accessing content through the Kindle app,” she told PW. “Before jumping to conclusions, it would be important for public libraries to better understand the value that app brings to users, and what perceived data analysis is enabled by Amazon."

In addition to asking librarians to pressure vendors in the digital library space, Mercer offered librarians two more recommendations in his message: to engage directly with authors on the ways "digital lending contributes to the discovery and accessibility of their works.” And, to consider “joining the efforts of the Association of American Publishers” in urging the Federal Trade Commission to look into Amazon's business practices.

“We unconditionally support the ability for libraries to acquire content on publication date, and we will persist in advocating on their behalf,” Mercer concludes. “Our collaborative approach of open discussion with both publishers and libraries has helped create the market we have today, and I am confident we will be able to improve access again as the market evolves.”