Consumers say the world’s largest retailer partnered with Big Five publishers to raise prices
According to Hagens Berman, consumers today charged Amazon.com with a nationwide class action lawsuit alleging the world’s largest retailer of artificially increasing the retail price of e-books through anti-competitive agreements with the country’s five largest book publishers.
If you’ve bought an e-book from retailers that compete with Amazon, learn more about the lawsuit and your rights.
The lawsuit, filed in the US District Court for the southern borough of New York, states that Amazon, which controls approximately 90% of the US e-book market, worked with the nation’s “Big Five” book publishers to set the price of e-books and increase the price of e-books sold through Amazon’s e-book retailer’s competitors higher than in a legally competitive market.
The complaint states that Amazon’s co-conspirators have been involved in similar litigation – and appear to have learned nothing from the experience. In 2011, Hagens Berman filed a lawsuit against Apple and the Big Five, accusing them of fixing e-book prices at artificially high levels in response to the threat to their profits from retailers’ discounted e-book prices . As part of this program, the Big Five – Hachette, HarperCollins, Macmillan, Penguin-Random House, and Simon & Schuster – have signed agreements with Apple that allow all publishers to adopt a wholesale model (where the e-book retailer sets retail prices for e) -books) to an agency model (in which the publisher sets the retail prices and the e-book dealer acts only as an intermediary). As part of their conspiracy, the Big Five agreed to a Most Favored Nation (MFN) clause to avoid discounts to retailers and to sell their e-books through Apple’s online store at the same inflated prices as any other e-book retailer.
Hagens Berman’s successful class action lawsuit led Apple to settle for $ 400 million and publishers to settle for millions more. Hundreds of millions of dollars flowed back into the pockets of e-book users who fell victim to the program. As the current complaint suggests, Amazon has now stepped into Apple’s anti-competitive role and its monopoly actions have been condemned by US and European regulators.
The story goes on
“Amazon’s behavior is surprisingly bold, especially given previous litigation and recent government action in the US and abroad,” said Steve Berman, managing partner of Hagens Berman. “Time and again, Amazon’s reaction to competition is not to compete on an equal footing, but to try to eliminate competition – and that’s not how things should work.”
NEW ECONOMY, SAME OLD PRICE DETERMINATION
According to the complaint, consent regulations enacted in the previous lawsuit prevented the Big Five from affecting retailer discounts for two years, resulting in lower, more competitive e-book prices in 2013 and 2014. Instead of allowing e-books to be competitively priced, Amazon and the Big Five struck up price-fixing agreements in 2015 that allowed the Big Five publishers to increase their e-book prices by up to 30%, and Amazon – much like the Apple conspiracy – to protect against price competition from other e-books. Bookseller.
As a result of this alleged collusion, all plaintiffs share a similar experience: when they searched for cheaper prices for a particular e-book title, they found uniform, anti-competitive prices on the internet instead.
In a report published on October 5, 2020, the Justice Committee of the US House of Representatives criticized Amazon’s “past use of MFN clauses for anti-competitive purposes”. Although Amazon has changed the name and specific mechanisms over the years, the committee found that Amazon has continually imposed contract provisions on book publishers that effectively act as MFNs. Furthermore, the report compared Amazon to “the kind of monopolies we last saw in the era of oil barons and railroad tycoons.”
“Amazon’s abuse of power proves once again that the new economy is up to the same old tricks when it comes to violating antitrust laws,” said Berman.
The lawsuit against Amazon states that the e-book retailer violated antitrust and consumer protection laws by imposing fraudulent price increases on consumers through illegal pacts with its Big Five co-conspirators. The lawsuit seeks financial reimbursement for consumers who purchased e-books through e-book retailers that compete with Amazon, and calls for injunctive relief that would require Amazon and its co-conspirators to cease enforcing anti-competitive price restrictions.
Learn more about the class action lawsuit against Amazon on behalf of US consumers.
About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer litigation law firm with 10 offices worldwide. The firm’s tenacious pursuit of plaintiffs’ rights has earned it numerous national awards, prizes and titles for “Most Feared Plaintiff’s Firm,” MVPs and pioneers of collective rights. For more information on the law firm and its achievements, please visit www.hbsslaw.com. Follow the company for updates and news at @ClassActionLaw.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210114006057/de/