Consumers Ask Court to Turn the Page on Amazon’s eBook Overcharges

A putative class of book buyers hopes to hold, Inc. and five co-conspiring publishers accountable for allegedly colluding to fix eBook prices, according to a complaint filed on Thursday. The restrictive agreements entered into by Amazon and its cohorts, the plaintiffs allege, had the intent and effect of injuring consumers by eliminating the price competition in the market for eBooks, partly by virtue of Amazon’s “stranglehold” over online book distribution.

The complaint states that Amazon’s retail platform is responsible for more than 50% of all retail books and almost 90% of all eBook sales nationwide. Purportedly, the plaintiffs are three consumers from different states who routinely purchase eBooks through booksellers’ online platforms, like Amazon, Barnes & Noble, Kobo, and Apple Books.

The complaint contends that Amazon and the “Big Five” publishers, Hachette Book Group, HarperCollins Publishers L.L.C., Macmillan Publishing Group, LLC, Penguin Random House LLC, Simon & Schuster, Inc., and Simon & Schuster Digital Sales, Inc. have engaged in a price-fixing conspiracy notwithstanding multiple investigations and reprisals by state attorneys general, the Department of Justice (DOJ), and abroad, the European Commission (EC).

The complaint recounts the history of pricing in the eBooks market, noting that after DOJ and EC investigations concluded with consent decrees, the Big Five’s eBook prices decreased substantially from 2013-2014. Allegedly, once the censure ended in 2015, prices began to climb. The complaint explains that a week after the Big Five renegotiated agency agreements with Amazon, Penguin increased its eBook prices by 30.4%, Co-conspirator HarperCollins by 29.3%, Co-conspirator Simon & Schuster by 15.8%, Co-conspirator Hachette Book Group by 8.3%, and Co-conspirator Macmillan by 10.7%.

In addition to agency agreements, the complaint also argues that Amazon increases the cost of selling eBooks by “tying its distribution services, i.e., helping customers find and purchase eBooks on the Amazon platform, collect payment, and deliver the book electronically, with its advertising services, which are designed to maximize the placement of advertisements to consumers at various points of the search and purchase experience.” Tying allegedly drives up the Big Five’s cost of doing business; if publishers do not purchase advertising, Amazon’s supposed manipulation of discovery tools makes eBook titles difficult to find.

The plaintiffs accused Amazon of violating Sections 1 and 2 of the Sherman Act and seek treble damages. They also asked for nationwide injunctive relief pursuant to the Clayton Act. They request that the Southern District of New York court certify a class of purchasers who bought one or more trade eBook sold by the Big Five through a domestic e-commerce retailer other than Amazon beginning on Jan.14, 2017.

The plaintiffs are represented by Hagens Berman Sobol Shapiro LLP.