Amazon sued for alleged e-book price-fixing with Big Five publishers

Amazon sued for alleged e-book price-fixing with Big Five publishers

A nationwide class action lawsuit has been filed against Amazon in the District Court for the Southern District of New York alleging complicity and unlawful e-book price-fixing with certain publishers. Law firm Hagens Berman is representing the petitioners; in 2011 it brought a similar case against Apple Inc. and is a recurrent mole on e-book price-fixing.

The complaint states that Amazon has nearly 90 per cent of all e-books sold through its platform and is currently the largest retail e-book seller in the US. Amazon has entered into price-fixing agreements for e-books with the "Big Five" as per the complaint. The Big Five are Hachette Book Group, HarperCollins Publishers LLC, Macmillan Publishing Group LLC, Penguin Random House LLC and Simon & Schuster. Together, they make up 80 percent of the trade books in the US which include both general interest fiction and non-fiction.

Reportedly, the contracts contain stipulations for promotion price parity, agency price parity, selection parity and business model parity owing to which publishers have to offer Amazon the same material terms and conditions for distribution of e-books, the same content variety at the earliest date available to other e-book retailers, fix a sale price which is not higher than other platforms, and offer it promotions being offered to other platforms.

Amazon allegedly also charges high prices for advertising and commission causing publishers to sell e-books at higher prices and consumers not getting the benefits of cost reduction from low distribution and printing expenses of the e-book market.

Consumers buying from other platforms are forced to pay higher prices and market innovation is being smothered. There isn't much inducement for rivals to invest in the development of alternate models which might otherwise have challenged the monopoly enjoyed by Amazon in terms of distribution of e-books.

As per the complaint, Amazon's conduct causes "an unreasonable restraint of trade" and constitutes monopoly power abuse under section 2 of the Sherman Antitrust Act. The price-fixing conspiracy by Amazon and the Big Five violates section 1 of the Sherman Act.

Under the Clayton Act, the petitioners seek injunctive relief on behalf of the class of "all persons who, on or after January 14, 2017, purchased in the United States one or more e-books sold by the Big Five Publishers through any other retail e-commerce channel in the United States other than the Amazon.com platform."