Amazon class action alleges audiobook exclusivity restrictions block competitors from entering market

Amazon class action lawsuit overview:

• Who: Author CD Reiss filed a class action lawsuit against Amazon.com Inc.
• Why: Amazon allegedly stifles competition in the audiobook market by charging authors supracompetitive prices to distribute audiobooks and penalizing those who do not distribute titles exclusively through Amazon.
• Where: The Amazon class action lawsuit was filed in Washington federal court.

A new Amazon class action lawsuit claims the online retail giant stifles competition in the audiobook market and charges authors supracompetitive prices to distribute their audiobooks.

Plaintiff CD Reiss is an author who began producing audiobooks in 2016. She says Amazon.com Inc. charges her at least 60% of the audiobook’s sale price (set by Amazon) for exclusive distribution and at least 75% of the sale price for non-exclusive titles.

“No matter what authors choose, they are gouged by Amazon’s exercise of its monopoly power,” the Amazon class action lawsuit says.

Amazon charges these high prices despite its costs being only 5% to 10% of the audiobook sale price, Reiss alleges

Amazon restrictions prevent competition in audiobook market, plaintiff claims

The company can charge these allegedly supracompetitive prices because of its dominance in the domestic audiobook market, the Amazon class action lawsuit says. The online retailer reportedly accounts for more than 60% of consumer sales.

The Amazon restrictions leave authors with a difficult choice to distribute exclusively through Amazon to avoid the higher prices and other penalties the retailer imposes for non-exclusive distribution.

“These penalties coerce audiobook authors into not distributing their books on other sites, thereby preventing the emergence of rivals to Amazon who could acquire enough content to effectively compete and offer lower distribution fees to authors,” Reiss claims.

In addition to charging higher distribution fees to authors for non-exclusive distribution, Amazon also drops their audiobooks’ search rankings and allegedly uses other schemes to deter customers from purchasing them, such as not allowing preorders, Reiss claims.

The Amazon class action says the retailer’s tactics are not necessary to achieve any legitimate business goal and do not reflect any of the company’s actual costs, according to Reiss.

Reiss filed the Amazon class action on behalf of those who contracted with Amazon for audiobook distribution and paid a 60% or more fee for retail distribution on at least one audiobook since June 13, 2020.

Other recent Amazon class action lawsuits allege the company uses a biased algorithm when selecting items to show in the “Buy Box” on Amazon Marketplace.

What do you think about the Amazon restrictions on audiobook distribution? Join the discussion in the comments.

Reiss is represented by Steve W. Berman and Nathan Emmons of Hagens Berman Sobol Shapiro LLP and Phillip Cramer, Eamon P. Kelly and Barry Frett of Sperling & Slater LLC.

The Amazon restrictions class action lawsuit is CD Reiss v. Amazon.com Inc., Case No. 2:24-cv-00851, in the U.S. District Court for the Western District of Washington at Seattle.

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