News broke this week that Amazon is being sued for colluding with five major publishers to inflate prices. The case was filed by the same law firm that lead the lawsuit against the Price Fix Six back in 2011.
The law firm of Hagens Berman is accusing the world’s largest retailer of colluding to artificially inflate the retail price of e-books through anticompetitive agreements with the nation’s five largest book publishers.
This is a fancy way of saying that the Agency 2.0 contracts, which gave publishers control over their ebook prices, were negotiated conspiratorially, and that the MFN clauses in those contracts illegally helped keep Amazon in a dominant position in the US ebook market.
This case has been well-covered elsewhere, so I will merely link to various sources before getting into a discussion.
- Here’s the press release.
- Here’s the actual filing.
- Coverage in The Guardian.
Here’s the biggest problem with this lawsuit:
Five independently negotiated contracts does not a conspiracy make.
That, folks, is the Achilles heel of this lawsuit. I agree that consumers were harmed by these contracts, yes, but this lawsuit makes a big deal about a conspiracy without presenting any evidence that Amazon conspired.
Sure, that information could come out later, but it probably does not exist. Amazon is well-known for keeping its negotiations so secret that parties are not even allowed to talk about the process, much less the terms agreed to or the information exchanged.
And these lawyers think Amazon conspires with publishers?
Pull the other one, it has bells on.
Furthermore, while I want this lawsuit to be decided in favor of consumers, it probably won’t result in the contracts getting tossed. That is my desired goal, but I don’t see it happening. (Unless of course Amazon also wants the contracts thrown out, so it settles the suit and switches sides in the lawsuit.)
In any case, we are in for a very entertaining 6 to 8 months.
image by luckypines via Flickr
You just finished reading Amazon Sued Over Its Dominance of the eBook Market (Finally) which was published on The Digital Reader.