Home 9 Uncategorized 9 Legally Speaking — States Unsuccessful in Providing Financial Relief of eBook Terms for Libraries

Legally Speaking — States Unsuccessful in Providing Financial Relief of eBook Terms for Libraries

by | Jul 18, 2022 | 0 comments

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Column Editor:  Anthony Paganelli  (Western Kentucky University) 

Against the Grain v34#3

Due to consumer behaviors during and post-pandemic, as well as high economic inflation, available electronic resources are in high demand, which includes eBooks.  While libraries are a financially viable resource for lower income consumers to access information, eBook providers continue to make access to eBooks difficult for libraries.  Currently, publishers are setting extreme prices and terms for eBook purchases by libraries.

For example, Amazon withholds eBook titles published within the Amazon publishing department from libraries that includes such popular authors as Mindy Kaling, Trevor Noah, Andy Weir, and Michael Pollan, who all have a publishing agreement with Amazon.  This means that libraries cannot purchase an eBook of these authors for their patrons (Statt, 2021). 

Amazon’s global marketing chief of Amazon Publishing, Mikyla Bruder stated in an email to the Washington Post’s Geoffrey Fowler, “It’s not clear to us that current digital library lending models fairly balance the interests of authors and library patrons.  We see this as an opportunity to invent a new approach to help expand readership and serve library patrons, while at the same time safeguarding author interests, including income and royalties” (Statt, 2021).  Based on the statement, Amazon is noting that revenues received from electronic resources is an important decision for excluding eBooks from libraries, as many online businesses seek to increase revenues through online services, as evident during and following the Covid-19 Pandemic.

For instance, the pandemic had an inequality impact on offline and online businesses.  According to Bloom, et al. (2021), “offline firms are much more negatively impacted than online firms as the online economy has been largely able to escape the worst of the pandemic.  Large employers have likewise fared much better than small employers and non-employers.  In particular, small offline firms are significantly worse off than their larger online counterparts:  non-employer firms who receive less than 50% of their revenue online lost over 45% of their sales while 20+ employee firms with at least 50% of their revenue online lost only 10%.  This highlights the great inequality of the economic impact of Covid-19.”

Despite the demand and increase of revenue for online services in larger corporations, eBook providers and publishers continue to make it difficult financially for libraries to purchase and provide eBooks and information to their patrons, which has gained the attention of government agencies.  For instance, the U.S. House of Representatives on the Judiciary (2019) began an investigation into the digital markets regarding antitrust.  The committee investigated three main areas:  “Documenting competition problems in digital markets;  Examining whether dominant firms are engaging in anti-competitive conduct; and Assessing whether existing antitrust laws, competition policies, and current enforcement levels are adequate to address these issues.” 

In a statement by the chair of the committee Jerrold Nadler (D-NY) on November 13, 2019, the chairman noted that specific tech businesses control a significant portion of businesses, which included Google, Facebook, and Amazon.  The statement stated, “Google controls over 90% of the global search market and Facebook captures over 80% of all global social media revenue.  By some estimates, Amazon controls about half of all online commerce in the U.S.” (Nadler, 2019). 

As per request of the committee, the American Libraries Association (ALA) made a statement to the U.S. House of Representatives Committee on the Judiciary on October 15, 2019.  They noted that the demand for digital content is growing among library patrons, which libraries are trying to maintain the demand.  ALA (2019) stated, “However, unfair behavior by digital market actors — and the outdated public policies that have enabled them — is doing concrete harm to libraries as consumers in digitals markets.”  The statement also noted that “if these abuses go unchecked, America’s competitiveness and our cultural heritage as a nation are at risk.”  (ALA, 2019). 

Furthermore, ALA mentioned that libraries have spent over $40 billion on digital content over the past 10 years.  However, they provided an example of how eBook providers and publishers are setting the prices and terms for libraries.  The statement noted the eBook The Codebreakers by David Kahn is priced to consumers for $59.99 for a lifetime.  Yet, the same eBook cost the library $239.99 for one copy, which can only be lent to one person at a time and the library can only keep the eBook for two years.  Furthermore, if the library would like to extend the term for four years, the library would pay $479.98 or for 20 years the library would pay $2,399.90.  ALA also addressed the terms excluding libraries from titles or allowing accesses to titles after release dates, “Denying or delaying new content to libraries certainly is a market failure.  It also prevents libraries from accomplishing their democratizing mission of providing equal access to information to American citizens” (ALA, 2019).

The indifferences between the libraries and the public consumers of eBooks by the eBook providers is significant, as indicated by the ALA statement to the U.S. House of Representatives.  This is also evident in lawsuits against Apple, Amazon, and other leading publishers regarding eBook price fixing a few years ago, which is encouraging state lawmakers to intervene on behalf of libraries.

State Legislation

Maryland, New York, and Rhode Island are the first states to lead the initiative against eBook publishers and providers on behalf of the libraries.  On January 26, 2021, the New York Senate introduced a bill (S2890B, 2021) to address the different agreements between publishers and libraries.  The bill titled “An act to amend the general business law, in relation to requiring publishers to offer licenses for electronic books to libraries under reasonable terms” addressed several issues with the terms set forth by eBook providers.  First, “A limitation on the number of users to whom the libraries may simultaneously provide access to the electronic books.”  Second, “A limitation on the number of days the libraries may provide a user with access to the electronic books.”  Third, “The use of technological protection measures that would prevent a user from (A) maintaining access to the electronic books beyond the access period set forth in the license, and (B) providing other users with access to the electronic books.”  In addition, the bill stated, “such reasonable terms shall not include a limitation on the number of licenses for electronic books libraries may purchase at the same date available to the public.” 

Despite the bill being passed unanimously in the New York Assembly and strongly supported by the New York Library Association, the bill was vetoed by the New York Governor Kathy Hochul (D).  The president of ALA Patty Wong noted the disappointment in the governor’s veto, “Governor Hochul’s decision to veto S2890B/A5837B is unfortunate and disappointing.  Protecting New Yorkers’ access to digital books through the library is critical to ensuring equitable access to information for all” (ALA News, 2022).  The statement from ALA also noted that they will continue to negotiate directly with publishers regarding eBooks, while they continue to work with federal and state agencies to advocate for libraries. 

While New York was the second state to introduce an eBook regulation bill in support of libraries, Maryland was the first state to create similar legislation, which was approved by the legislators and Governor Larry Hogan (R).  However, even before the bill was passed, the Association of American Publishers (AAP) provided written testimony in opposition, which they later filed a lawsuit against Brian E. Frosh (the Attorney General of the State of Maryland) on December 9, 2021.  The AAP’s argument was that the law was mandating any eBook licensed to a consumer in Maryland also had to provide a license to the Maryland libraries for a “reasonable term,” which was forcing a transaction and therefore unconstitutional due to their right to distribute copyrighted works.  

Judge Deborah L. Boardman ruled in favor of the publishers and was noted in the opinion that granted the injunction, because the publishers challenged the Maryland Law “that requires publishers who offer to license ‘electronic literary products’ to ‘the public’ to offer to license the same products to Maryland public libraries on ‘reasonable terms.’” (Price, 2022).  The preliminary junction was issued and became permanent in April 2022, as the Maryland Attorney General concluded that the state would no longer pursue the lawsuit any further, which officially ended the law.  

Rhode Island is another state that is attempting to create a law regarding eBooks and libraries, but with the addition of schools and educational institutions within the bill.  As of May 18, 2022, the Rhode Island Senate is moving forward with the Senate Bill S2842 that addresses eBook reasonable terms.  The bill also has similar language as the New York and Maryland bills, which included the statement, “Any publisher who offers a contract or license for acquisition of electronic books and digital audiobooks to the public in Rhode Island shall offer to license such books to libraries and to elementary and secondary schools and educational institutions in the state on reasonable terms that would permit libraries, schools and educational institutions to provide their users and students with access to such electronic books.”

According to Albanese (2022), the Rhode Island bill has also included a significant change “that explicitly mandates that any e-book and digital audiobook license ‘that limits the rights of a library or school under the U.S. Copyright Act shall not be enforceable’ under Rhode Island state law.”  Of course, this bill will be debated the same as the New York and Maryland bills.  As for other states, Albanese (2022) was not optimistic that states with similar bills will be successful.  Those states include Connecticut, Illinois, Missouri, and Tennessee. 

However, until a governmental policy is established, eBook publishers and providers will continue their business models that will remain costly to libraries and the patrons that rely on access to literary information electronically.  Hopefully, the state’s initiatives will gain the attention of federal agencies to create a policy nationwide that will establish a new business model to satisfy the publishing industry, while supporting the libraries. 

References

ALA (2019).  U.S. House of Representatives Committee on the Judiciary Competition in Digital Markets.  Retrieved from https://www.ala.org/news/sites/ala.org.news/files/content/mediapresscenter/CompetitionDigitalMarkets.pdf.

ALA News. (2022).  ALA disappointed in New York Governor’s rejection of ebook equity legislation.  Retrieved from https://www.ala.org/news/press-releases/2022/01/ala-disappointed-new-york-governors-rejection-ebook-equity-legislation.

Albanese, A. (2021).  New York Legislature passes library E-Book bill.  Publisher Weekly.  Retrieved from https://www.publishersweekly.com/pw/by-topic/industry-news/libraries/article/86637-new-york-legislature-passes-library-e-book-bill.html.

Albanese, A. (2022).  Rhode Island advances its library E-Book bill.  Publisher Weekly.  Retrieved from https://www.publishersweekly.com/pw/by-topic/industry-news/libraries/article/89385-rhode-island-advances-its-library-e-book-law.html.

Bloom, N., Fletcher, R.S., & Yeh, E. (2021).  The impact of Covid-19 on US firms.  National Bureau of Economic Research: Working Paper Series.  Retrieved from http://www.nber.org/papers/w28314.

Handler, S. (2022).  Publishers win preliminary injunction in library E-Book fight.  Bloomberg Law.  Retrieved from https://news.bloomberglaw.com/ip-law/publishers-win-preliminary-injunction-in-library-e-book-fight.

Nadler, J. (2019).  Chairman Nadler statement at subcommittee hearing on “Online Platforms and Market Power, Part 4: Perspectives of the Antitrust Agencies.”  U.S. House of Representatives on the Judicary: Press Release.  Retrieved from https://judiciary.house.gov/news/documentsingle.aspx?DocumentID=2148.

NY Senate Bill S2890B. (2021).  An act to amend the general business law, in relation to requiring publishers to offer licenses for electronic books to libraries under reasonable terms.  Retrieved from https://www.nysenate.gov/legislation/bills/2021/s2890/amendment/b.

Price, G. (2022).  Court rules in favor of publishers in Maryland E-Book lawsuit, preliminary junction granted.  InfoDocket.  Retrieved from https://www.infodocket.com/2022/02/17/judge-rules-in-favor-of-publishers-in-maryland-e-book-lawsuit-preliminary-injunction-granted/.

RI Senate Bill S2842 (2022).  Electronic book licenses to libraries.  Retrieved from https://webserver.rilegislature.gov/BillText22/SenateText22/S2842.pdf.

Statt, N. (2021).  Amazon withholds its ebooks from libraries because it prefers you pay instead: Amazon’s publishing arm has refused to sell digital books to libraries.  The Verge.  Retrieved from https://www.theverge.com/2021/3/10/22323434/amazon-publishing-library-lending-access-refuse-overdrive-libby.

U.S. House Committee on the Judiciary. (2019).  Digital Markets Investigation.  Retrieved from https://judiciary.house.gov/issues/issue/?IssueID=14921.  

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