Class suit filed against Amazon for e-book price fixing in US

Class suit filed against Amazon for e-book price fixing in US

Amazon is being sued for anti-competitive behaviour in the US by the same law firm that successfully sued Apple and five major publishers for colluding to fix e-book prices in 2011.

A class action lawsuit was filed by the firm Hagens Berman in district court in the southern district of New York on Thursday (14th January), claiming Amazon.com (the defendant) and five "co-conspirators" — Hachette, HarperCollins, Macmillan, Penguin Random House and Simon & Schuster — agreed to price restraints that led to consumers overpaying for e-books.

In the lawsuit, the use of various forms of Most Favoured Nation (MFN) clauses, shielding Amazon from competition from other e-book distributors, falls under scrutiny for keeping e-book prices artificially high.

"In violation of Section 1 of the Sherman Antitrust Act, Defendant and the Big Five Co-conspirators agreed to various anti-competitive MFNs and anti-competitive provisions that functioned the same as MFNs," reads the complaint. "Amazon’s agreement with its Co-conspirators is an unreasonable restraint of trade that prevents competitive pricing and causes Plaintiffs and other consumers to overpay when they purchase e-books from the Big Five through an e-book retailer that competes with Amazon. That harm persists and will not abate unless Amazon and the Big Five are stopped."

It follows a case that Apple and other major publishers lost almost 10 years ago, resulting in a $400m payout. In 2012, it was found by both the US District Court and European Commission that Apple and major publishers colluded in artificially raising e-book prices and, as a result, it was agreed that for two years retailers should not be restricted from reducing the price of e-books or offering discounts. 

In the new complaint, it is claimed that while e-book prices decreased "substantially" in 2013-2014, the Big Five immediately increased their prices in 2015 after renegotiating agency agreements with Amazon and have continued to maintain "supracompetitive" prices. 

After Amazon agreed not to enforce its MFN provisions in Europe in 2017, following a two-year investigation by the European Commission, it is remarked on further in the lawsuit that continued use of MFNs in the US by Amazon and the big five publishers is "astonishingly brazen". 

Almost 90% of all e-books are sold through Amazon's online retail platform, the lawsuit claims, while the the big five's books account for around 80% of all trade books sold in the US.

Alleging Amazon’s agreement with the publishers is "an unreasonable restraint of trade that prevents competitive pricing", the lawsuit seeks both compensation for consumers and injunctive relief to stop Amazon and the publishers enforcing price restraints.

Amazon declined to comment when approached by The Bookseller, as did Penguin Random House US, Hachette Book Group US and HarperCollins US. Macmillan and Simon & Schuster in the US have yet to respond to a request for comment.