Three US booksellers claim contracts between Amazon and other publishers ‘unreasonably restrain trade’ in ebook market
In a case of David against Goliath, three independent US bookshops are taking on Amazon and six of the biggest publishers in America in a class-action lawsuit accusing the internet giant of creating an ebook monopoly that is destroying other booksellers.
The lawsuit, posted online by the Huffington Post, was filed last Friday by the New York bookseller Book House of Stuyvesant Plaza, the South Carolina-based Fiction Addiction and New York City’s Posman Books “on behalf of themselves and … all independent brick-and-mortar bookstores who sell ebooks”. The case was filed against Amazon and the “big six” publishers – Random House, Penguin, Hachette, Simon & Schuster, HarperCollins and Macmillan – and alleges that contracts between Amazon and the publishers “unreasonably restrain trade and commerce in the market for ebooks”.
The lawsuit alleges that contracts between the publishers and Amazon established that Amazon would use digital rights management technology (DRM) to prevent unauthorised sharing or copying of ebooks. Amazon uses its own DRM system for every ebook it sells, the suit continues, obliging customers to read those ebooks on an Amazon device, and prevents Amazon devices from reading ebooks with any other form of DRM.
“Currently, none of the big six has entered into any agreements with any independent brick-and-mortar bookstores or independent collectives to sell their ebooks,” say the booksellers, and “consequently, the vast majority of readers who wish to read an ebook published by the big six will purchase the ebook from Amazon.”
These technological restraints combine with the dominant positions of Amazon and the big publishers so that independent booksellers “have been restrained from selling ebooks in the United States” as a result. This, they say, has not only deprived consumers of choice, but has also led to the loss of sales.
The contracts were entered into by Amazon in order to “injure, suppress, destroy and irreparably harm” independent booksellers, says the lawsuit, “to monopolise the market for the sale of ebooks” in the US, to control prices and to “reduce the variety of offerings that would otherwise be available to consumers”.
The booksellers are asking for an injunction stopping Amazon and the publishers from releasing and selling ebooks with device- and app-specific DRM, and requiring the publishers to let independent booksellers sell ebooks with alternative DRM systems.
This case is only the latest to confront publishers over ebooks, after the Department of Justice (DoJ) launched a case against five of the big six publishers and Apple alleging price-fixing. All of the five publishers have since settled, leaving Apple to face the DoJ alone in June.
Alyson Decker of Blecher & Collins PC, acting for the booksellers, told the Huffington Post that DRM was “a problem that affects many independent bookstores”.
“We are seeking relief for independent brick-and-mortar bookstores so that they would be able to sell open-source and DRM-free books that could be used on the Kindle or other electronic readers,” she said. “We wouldn’t have filed it if we weren’t hopeful [of winning].”
The writer Cory Doctorow is less optimistic, suggesting in a piece on Boing Boing that the bookshops are misusing the term “open source”.
“For some reason,” he writes, “they’re using ‘open source’ as a synonym for ‘standardised’ or ‘interoperable’. Which is to say, these booksellers don’t really care if the books are DRM-free, they just want them locked up using a DRM that the booksellers can also use.”
Doctorow’s sympathies may be with the independent booksellers, he continued, but “grossly misusing” technical terms and proposing a solution that “no customer wants … bodes poorly for the suit”.
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