Amazon and what have been termed the “Big Five” publishers – Penguin Random House, Hachette, HarperCollins, Macmillan and Simon & Schuster – have recently been accused of colluding with one another in order to fix ebook prices. This accusation comes in a class action suit filed by a law firm that successfully sued Apple and the Big Five on the same charge 10 years ago.
The lawsuit was filed in a New York District Court on behalf of consumers in several states. It names the retail giant as the sole defendant but has called the publishers “co-conspirators.” The suit alleges that Amazon and the publishers use a clause known as “Most Favored Nations” to keep ebook prices artificially high, and therefore force consumers to pay more for ebooks purchased through retail platforms that are not Amazon.
The lawsuit alleges that almost 90% of all ebooks sold in the US are done so on Amazon. The lawyers also say that ebook prices dropped in 2013 after Apple and the publishers were successfully sued for the same charge, but that they rose again when Amazon renegotiated their contracts in 2015.
“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,” the complaint states. “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 ebooks from the Big Five through an ebook retailer that competes with Amazon. That harm persists and will not abate unless Amazon and the Big Five are stopped.”
The suit is seeking compensation for consumers who purchased ebooks through competitor websites and aims to force Amazon and the publishers to “stop enforcing anti-competitive price restraints.”
This lawsuit came a day after the state of Connecticut announced it was launching an investigation into Amazon for possible anti-competitive behaviour in its sale of ebooks.
Amazon has thus far not released a statement in response to the New York lawsuit.