Amazon and the ‘Big Five’ publishers in the United States – HarperCollins, Penguin Random House, Simon & Schuster, Macmillan, and Machete – are suspected of covertly fixing the prices of E-books. The Seattle law firm Hagens Berman has filed the class-action lawsuit. They also filed the same lawsuit ten years ago, against the ‘Big Five’ and Apple, and won.
This time, the lawsuit is mainly accusing Amazon and considering the ‘Big Five’ as co-conspirators with the company. They state that Amazon is using a loophole within the system that is known as the ‘Most Favored Nations’ (MFN). It is a clause that lets Amazon monopolize the price restraints of E-books, making them more expensive on other retail sites that have no correlation with Amazon.
“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 lawsuit also states that almost ninety percent of all E-books that are sold within the U.S. are sold on Amazon, with fifty percent of print books sold there as well. Though E-book prices dropped between 2013 and 2014 because of the initial lawsuit, after renegotiating their contracts in 2015, Amazon regained control and raised the prices again. The lawsuit asks for compensation for the customers who bought E-books from other retailers with damage and injunctive relief which would require Amazon to “stop enforcing anti-competitive price restraints.”