Amazon and a number of major book publishers are facing a potentially very costly class-action lawsuit after being accused of colluding to inflate ebook pricing on retail platforms other than Amazon's own.
As Reuters reports, Amazon is accused of working with the five largest US book publishers, collectively referred to a the "Big Five," which includes Hachette, HarperCollins, Macmillan, Penguin-Random House and Simon & Schuster. The lawsuit has been brought by law firm Hagens Berman, who filed a similar lawsuit back in 2011 against Apple and the Big Five.
In the 2011 lawsuit, Apple settled for $400 million and the Big Five agreed to not interfere with retailers' discounts for two years. Now Hagens Berman says Amazon has stepped in to the same role Apple played back in 2011 while the Big Five "failed to learn anything from the experience." The result is a collusion that has seen the price of ebooks rise when sold though Amazon's retail competitors, while at the same time protecting Amazon against such increases. Consumers could be paying as much as 30 percent more for their ebooks because of this.
“Amazon’s behavior is astonishingly brazen, especially in light of past litigation and recent government actions in the U.S. and abroad,” said Steve Berman, managing partner of Hagens Berman. “Time and again, Amazon’s response to competition is not to compete on a level playing field, but to try to eliminate the competition – and that’s not how things are supposed to work.”
Amazon accounts for 90 percent of ebook sales according to the lawsuit, but has declined to comment on the action being taken against it. Seeing as Hagens Berman brought a similar class-action lawsuit and won against Apple, it will at least have got Amazon's and the Big Five's attention and their lawyers preparing.
Hagens Berman is hosting an Amazon E-Books Price Fixing form and is requesting anyone who has purchased an ebook though Amazon.com to enter their details because, "You likely overpaid due to an illegal price-fixing scheme."