Class Action Claims Barnes & Noble Textbooks Conspiracy

A Barnes & Noble textbooks class action claims several large companies are conspiring to monopolize the college textbook market.

Florida resident Julio Lopez alleges that college bookstores run by Barnes & Noble and Follett are charging students exorbitant prices for textbooks “with no legitimate justification” through a program called Inclusive Access.

Nearly two-thirds of U.S. college and graduate school students attend institutions where one of those retailers operates the campus bookstore, according to the Barnes & Noble textbooks class action lawsuit. In addition, the three publishers named as defendants — Cengage Learning, McGraw Hill and Pearson Education — hold a combined share of between 80 percent and 90 percent of the textbook market.

Until recently, college students have had numerous options for purchasing textbooks. They could choose new or used books, or even electronic versions, from a variety of sources including on- or off-campus bookstores, mail order, Amazon, eBay, and others.

Facing ever-increasing competition from those secondary sources, the defendants allegedly developed and implemented Inclusive Access as a scheme to boost their profits. This plan has unfolded over the course of several years, according to the plaintiff.

In 2016, the three publishers named in the suit formed the Educational Publishers Enforcement Group. While its supposed purpose was to fight textbook counterfeiting, the group has served as a way for the three publishers to collude in imposing Inclusive Access, the Barnes & Noble textbooks class action lawsuit argues. For example, it states, guidelines set by EPEG limit which retailers are allowed to sell textbooks, thus limiting the supply. This, in turn, allegedly gives the three publishers “a captive market” where they can charge higher prices.

Adding to this, in April 2019, the National Association of Collegiate Stores reportedly voted to exclude any textbook retailers that operate off-campus. This effectively disqualified all booksellers except Follett, Barnes & Noble, and the colleges themselves, the class action lawsuit maintains. As a result, NACS no longer represents the interests of all textbook retailers — only the defendants’.

And now, with the Inclusive Access program taking hold at colleges nationwide, the defendants are benefiting in a big way, the plaintiff claims.

Students taking Inclusive Access courses are not given any choice as to acquiring their textbooks. Instead, they are allegedly required to purchase access to electronic versions of those books, at a set price, from their on-campus bookstore, the Barnes & Noble textbooks class action lawsuit states. This means they can get the materials they need only from the Follett or Barnes & Noble college bookstore on campus, the lawsuit reports — and the cost is often billed directly to the student as part of their tuition.

The defendants ensure their monopoly by excluding all other booksellers from the Inclusive Access program, according to the plaintiff.

“When retailers other than the Retailer Defendants or on-campus bookstores run by universities have approached the Publisher Defendants and asked to purchase Inclusive Access materials to sell to students, they were refused,” the Barnes & Noble textbooks class action lawsuit maintains.

“The Publisher Defendants either stated that they had an exclusive arrangement with the Retailer Defendant or college-run on-campus store, or that the Inclusive Access materials could not be made available in a format that would allow those off-campus or online retailers to resell them.”

This practice prevents competition and thus keeps the textbook prices inflated, the filing argues — even in cases when exceptions had to be made.

“In the few instances where the Publisher Defendants did sell Inclusive Access materials to off-campus retailers, often only after legal intervention, the materials were sold at a substantially higher price than they were sold to the Retailer Defendants or to college-run on-campus bookstores,” states the Barnes & Noble textbooks class action lawsuit.

“This resulted in the off-campus retailers being unable to sell the materials at a competitive price and unable to compete with the Retailer Defendants or college-run on-campus bookstores for sales.”

The plaintiff is claiming unlawful agreement to restrict trade; monopolization; attempted monopolization; and conspiracy to monopolize. He is seeking treble damages and injunctive relief, as well as court costs.

“Inclusive Access does not have any advantages for students,” he states. “Students pay higher prices, are forced to purchase electronic materials even if they prefer print, and they receive access to online materials with an expiration date as opposed to being able to save course materials for future reference or sell them for money after the class is over.”

Have you been forced to purchase Inclusive Access for a college course? Share your thoughts in the comment section below.

Lopez is represented by James C. Shah and Eric L. Young of Shepherd, Finkelman, Miller & Shah LLP.

The Barnes & Noble Class Action Lawsuit is Julio Lopez, et al. v. Barnes & Noble College Booksellers LLC, et al., Case No. 3:20-cv-06152, in the U.S. District Court of New Jersey.

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