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Amazon and Big Five face price-fixing case – again

by | Feb 9, 2021 | News

There is a sense of déjà vu – or perhaps that should be déjà sue – in the law suit in the US brought against Amazon and the Big Five publishers: Hachette, HarperCollins, Macmillan, Penguin Random House, for anti-competitive behaviour with regard to e-books.

A class action initially filed against Amazon, and now including the publishers above as co-defendants, alleges that Amazon.com “agreed to price restraints” with the publishers leading customers to “overpay for e-books.

The filing asserts that Amazon uses MFNs – Most Favoured Nation clauses – which do not allow competitors to sell at a price cheaper than Amazon.  Quoting the House Judiciary Committee, the law suit from Hagens Berman alleges that the object of such clauses ‘is to prevent “publishers from partnering with any of Amazon’s competitors” and to reinforce “Amazon’s ‘stranglehold’ and ‘control’ over book distribution.” ‘

It continues: ‘Through these restraints, Amazon has acquired and maintained its monopoly power.  Competitors lack any incentive to offer promotional advantages or alternative business models, like eBook rentals, to gain a following because Amazon demands that the Big Five offer that same option on Amazon.com.  This results in fewer innovative products or business models and higher prices for eBooks consumers.’

Hagens Berman is the same law firm that sued Apple and major book publishers over the pricing of e-books back in 2011.  At the time there was plenty of colourful detail in the court filings with the New York Times reporting that in their defence against the law suit Penguin and Macmillan rebutted “the government’s charges that publishers had conspired [with Amazon] in e-mails, telephone conversations and over lavish dinners in Manhattan restaurants”.

 

 

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