Amazon.com and ‘Big Five’ publishers – Penguin Random House, Hachette, HarperCollins, Macmillan and Simon & Schuster – have been accused of colluding to fix the prices of e-books, in a class action lawsuit filed by the law firm that successfully sued Apple and the Big Five on the same charge 10 years ago.
The lawsuit, filed Thursday in New York district court by Seattle-based Hagens Berman, on behalf of consumers in several US states, names the retail giant as the sole defendant but calls publishers “co- conspirators ”. It alleges that Amazon and publishers use a clause known as “Most Favored Nations” (MFN) to keep e-book prices artificially high, by agreeing to price restrictions that force consumers to pay more for them. eBooks purchased from non-Amazon.com retail platforms.
The lawsuit claims that nearly 90% of all e-books sold in the United States are sold on Amazon, in addition to over 50% of all printed books. The lawsuit alleges that e-book prices plummeted in 2013 and 2014 after Apple and major publishers were successfully prosecuted for conspiracy to fix e-book prices, but rose again after that. Amazon renegotiated their contracts in 2015.
“In violation of Section 1 of the Sherman Antitrust Act, the Respondent and the Big Five Co-Conspirators agreed to various anti-competitive MFN clauses and anti-competitive provisions which functioned the same as MFNs,” the complaint states. “Amazon’s deal with its co-conspirators is an unreasonable restriction on trade that prevents competitive pricing and causes plaintiffs and other consumers to overpay when they purchase Big Five e-books through a retailer. competitor e-books from Amazon. This evil persists and will not subside until Amazon and the Big Five are stopped. “
The lawsuit seeks compensation for consumers who purchased e-books through competitors, damages and an injunction that would force Amazon and publishers to “stop enforcing anti-competitive price restrictions.”
The lawsuit comes a day after the state of Connecticut announced it was investigating Amazon for potential anti-competitive behavior in its e-book sales. A spokesman for Connecticut Attorney General William Tong confirmed Wednesday that Amazon had cooperated with a subpoena seeking documents relating to its dealings with the Big Five.
Amazon declined to comment on the New York lawsuit when approached by Reuters.
Hagens Berman sued Apple and the Big Five for setting e-book prices in 2011, in a case that eventually led to lawsuits from several US states and the Department of Justice, which accused Apple of collusion. in order to break Amazon.com’s dominance in the eBook market.
In that case, the five publishers settled $ 166million (£ 120million), while Apple lost at trial and was ordered to pay $ 450million in 2016, after a lengthy legal process that took place. ended when the United States Supreme Court refused to hear the company’s challenge. .