Amazon accused of price fixing system in book publishing

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A small independent Chicago bookseller is face Amazon with a new class action lawsuit alleging that e-commerce The giant conspired with major publishers to keep prices high and competition low.

Current combination, which was filed last week, alleges that Amazon colluded with the Big Five in book publishing — Hachette, HarperCollins, Macmillan, Penguin Random House, and Simon & Schuster — to set prices for wholesale books. The lawsuit goes on to say that Amazon has a series of contracts with these publishers to prevent, say, Hachette from giving independent bookstores better wholesale prices than they give Amazon.

“I, along with most independent bookstore owners in America, feel incredibly frustrated because we have seen that the playing field is not level,” Nina Barrett, the bookstore owner at the head of the case, Recount The Chicago Sun-Times.

“We have to constantly discuss with our customers why we can’t match Amazon’s prices,” she continued. “It has been very frustrating watching the growth of Amazon and thinking, ‘Me, just a little old man on my own, I can’t stop this, but I can see it’s unfair.’”

As the lawsuit points out, Amazon has spent the past decades building its book-selling business from a small online showcase in massive market power. Today, a lot of estimation that the company sells about 90% of all e-books and 50% of paperbacks and hard covers worldwide. Barrett’s lawsuit specifically calls Amazon’s practices in the “commercial book” space, what publishers refer to as the kinds of fiction and non-fiction books that do not fall into the category of textbooks or references. .

As Ars Technica points out, this is not the first time that Amazon’s bookstore activity has been suspended. The five edition mammoths who are the accused in the ongoing trial are members of large professional publishing groups who written directly to Representative David Cicilline, Chairman of the House of Representatives Antitrust Subcommittee, on this particular topic. At the time, the groups argued that Amazon’s predatory pricing structures and opaque market algorithms are designed to “direct consumers to Amazon’s own product every time. The result? Amazon market share keep growing, and small publishers are struggling to keep up.

The letter to Cicillin and the current Amazon case dispute what is known as the “most favored nation” clauses ”, or MFN, in its contracts with publishers. In the August letter, the group’s reproach (which you can read here) claims that these MFN were designed to ensure that Amazon enjoys such a good price for books if not better than the other retailers on its platform.

In the new lawsuit, the claim is that these same MFNs not only benefit Amazon, but force the Big Five to keep their wholesale prices artificially high in order to create those Amazon-only prices. Overall, the alleged ploy doesn’t just give Amazon a leg up on rival booksellers. but means more money in the pocket of the big publisher.

It should be noted that one of the companies representing Barrett in the new suit for follow-up Apple and the same five publishers a decade ago for similar reasons, this time on Apple’s iBook store. Apple lost and had to settle for around $ 450 million in 2015.

We contacted Amazon about the new costume and will be updated here when we get a response.

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