Amazon Accused of Price-Fixing to Monopolize the EBook Business

The world’s largest online retailer, Amazon, has been accused of conspiring with the top five book publishers in the U.S. to inflate ebook prices on other platforms and push consumers to buy only off Amazon. 

In a class action lawsuit filed on Thursday by consumer Jordan Sacks, the tech giant was accused of putting a “stranglehold” on the ebook business, using its market power to prevent price competition, and resulting in consumers paying inflated prices for ebooks, according to the complaint. 

The retail giant has been named as the sole defendant, with the “Big Five” publishers HarperCollins, Hachette Book Group, Penguin Random House, Simon & Schuster, and Macmillan being labeled as “co-conspirators”.

The complaint states that Amazon and the “Big Five” entered into anti competitive agreements using a clause known as “Most Favored Nations” (MFN) with the intent of injuring consumers by eliminating price competition that Amazon would typically face, and raising ebook prices sold through Amazon’s retail rivals above competitive levels.

The law firm representing the case, Hagens Bergman, previously filed a similar lawsuit in 2011 against Apple Inc. and the “Big Five” over ebook prices, which resulted in Apple paying a $450 million settlement, according to The Verge. 

“Amazon’s behavior is astonishingly brazen, especially in light of past litigation and recent government actions in the U.S. and abroad,” Steve Berman, managing partner of Hagens Berman told PC Mag. “Time and again, Amazon’s response to competition is not to compete on a level playing field, but to try to eliminate the competition – and that’s not how things are supposed to work.”

The suit seeks to provide damages and injunctive relief for the represented class that includes consumers who bought ebooks from competitors at an increased price. It also requires Amazon and its conspiring publishers to stop enforcing anti-competitive price restrictions. 

TCA reached out to Amazon for a comment and will update the story when we hear back. 

Retail giant Amazon has faced a number of claims of deceptive practices recently. The lawsuit comes a few days after the state of Connecticut announced it was investigating Amazon’s sale of ebooks for potential anti-competitive behavior, according to the Wall Street Journal. In addition, a group of public interest advocates have told U.S. regulators they think Amazon deliberately makes it difficult to cancel an Amazon Prime subscription.

Have you bought an ebook off Amazon due to its seemingly lower prices? Share your experience in the comments below.

The Amazon Ebook Class Action Lawsuit is Fremgen et al. v. Amazon.com Inc., case number 1:21-cv-00351, in the U.S. District Court for the Southern District of New York.

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