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Amazon and the United States’ top five book publishers have been hit with yet another nationwide class action lawsuit alleging they teamed up to fix prices on eBooks, giving the tech giant a “stranglehold” on the market that forces readers to pay more.
In the latest suit filed Wednesday in the Southern District of New York, Arizona’s Jeffrey and Susan Cook are accusing Amazon and HarperCollins Publishers, Simon & Schuster, Macmillan Publishing Group, Hachette Book Group and Penguin Random House of violating the Sherman Act.
Similar to another class action lawsuit filed in January, the complaint states Amazon and the “Big Five” entered into anti-competitive contracts that allowed Amazon to sell eBooks at a lower price than other retailers.
The class action claims consumers are harmed because they pay prices fixed by Amazon and the Big Five without the benefit of discounts, promotions, and potentially lower-cost alternative business models that would exist in a competitive market.
“In a competitive market, the Big Five could sell eBooks at a lower price on their own websites or through Amazon’s retail competitors that offer lower commissions and fees, but the Big Five agree not to sell their eBooks at a price lower than the price they sell on Amazon.com in order to maintain supracompetitive prices,” the class action states.
The contracts allegedly require the publishers to notify Amazon of their eBook distribution, give Amazon access to the same books in the very same time frame that other retailers had access and set eBook prices on Amazon no higher than the prices charged by its retail competitors.
The lawsuit says that this contractual “stranglehold” prevents Amazon’s eBook competitors from expanding their market share and makes it harder for competitors to enter the market, allowing Amazon to set the price of eBooks.
“Defendants’ anticompetitive agreements have the intent and effect of injuring consumers by eliminating the price competition,” the lawsuit states.
Amazon sells more books than any other single retail outlet in history, currently accounting for 90 percent of eBook sales, giving it massive bargaining power, the suit states. It argues that the tech giant has swallowed the independent bookstore industry, and not out of CEO Jeff Bezos’ love of books.
“Shel Kaphan, Bezos’s former deputy, explains that Mr. Bezos’s decision to start Amazon as a bookstore “was totally based on the property of books as a product”,” the class action contends. “One distinct difference between Amazon and its rival booksellers is that Amazon treats books as a commodity, like toothpaste or tennis rackets.”
The class action claims that 25 years ago there were around 4,000 independent bookstores in the U.S. with many operating as “local cultural centers, where people browsed and exchanged ideas.”
Now, the lawsuit contends, there are fewer than two thousand independent bookstores in the country, and “the economic power is concentrated in the hands of one bookseller.”
The Cooks are seeking to represent anyone who bought an eBook sold by the Big Five through any retail e-commerce channel in the United States other than Amazon.com from Feb. 17, 2017.
Formally, the Cooks are accusing Amazon and the five publishers of violating Sections 1 and 2 of the Sherman Act and are asking for treble damages.
Do you use Amazon to purchase eBooks? Let us know in the comments below.
The Cooks are represented by Gregory B. Linkh, Brian P. Murray and Lee Albert of Glancy Prongay & Murray LLP, Eugene A. Spector, Jeffrey J. Corrigan, William G. Caldes and Jeffrey L. Spector of Spector Roseman & Kodroff PC, Steven A. Kanner, Douglas A. Millen and Brian M. Hogan of Freed Kanner London & Millen LLC and W. Joseph Bruckner, Heidi S. Silton, Brian D. Clark and Jessica N. Servais of Lockridge Grindal Nauen PLLP.
The Amazon Big Five eBook Cooks Class Action Lawsuit is Jeffrey Cook et al. v. Amazon.Com Inc. et al., Case No. 1:21-cv-01369, in the U.S. District Court for the Southern District of New York.
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