Amazon, Booklocker Trade Motions in POD Antitrust Case
by Jim Milliot -- Publishers Weekly, 8/6/2008 11:34:00 AM
The legal skirmishing between Booklocker.com and Amazon in Booklocker’s antitrust lawsuit filed against the giant e-tailer got a bit heated last month as Amazon filed a motion to dismiss the case and Booklocker filed its response to keep the lawsuit alive. The case stems from Amazon’s decision to make print-on-demand publishers use its BookSurge subsidiary to manufacture POD titles if they want to sell their titles on Amazon directly (publishers that don’t use BookSurge will have their buy button removed). In May, Booklocker filed suit, charging that Amazon’s action was in violation of antitrust laws.
In its motion to dismiss, Amazon says that Booklocker is unhappy because it wants to use Amazon’s services “but doesn’t want to agree to the purchase terms announced by Amazon.” The company further argues that “there is no federal antitrust claim here. It has been well established for nearly a century that a retailer such as Amazon is free to decide unilaterally which suppliers’ products it will purchase, stock or resell, and the terms on which it will do so.” Amazon contends that its changes to its POD policy are aimed at improving the efficiency of its supply chain as part of its vertically integrated business, and that “antitrust laws simply do not prevent Amazon.com from making unilateral changes to its supply chain.”
In its response, Booklocker reiterates its position that the Amazon’s action constitute an antitrust violation because Amazon “began a scheme to illegally take advantage of its undisputed dominance in one service--the sale of book over the internet through Amazon’s online bookstore--in order to obtain greater market share with a wholly separate service--the printing of print-on-demand books.” This so-called tying argument “forces POD book publishers who wish to sell POD books through Amazon’s highly successful sales channel service to also pay Amazon to use its POD printing service. By doing so, Amazon is destroying the competitive market for POD printing services.”
Amazon rejects that stance, saying the compliant must be dismissed because other than “conclusory labels,” the complaint does not allege concerted action by Amazon, a tying violation or other reasonable restraint of trade, or antitrust injury. Booklocker seeks to buttress its tying claim in its response by arguing that Amazon’s book sales and book printing services are separate; that Amazon ties those services by requiring POD publishers to pay Amazon to print the POD publishers’ books as a condition to the purchase of Amazon’s sales service; and that Amazon’s dominance in the online book sales field is large enough to distort a POD book publishers choices with respect to POD book printing services.
Booklocker counters Amazon’s contention that by permitting POD publishers to sell their titles on Amazon using other options such as Amazon Advantage that it is not blocking POD houses from Amazon’s service. According to Booklocker, however, features like Amazon Advantage “are not viable for POD publishers” because of the program’s terms, which include a 55% discount plus the requirement to send Amazon five pre-printed copies of each book. Such a requirement, Booklocker argues “defeats the entire economic purpose of POD printing,” and notes that it would cost Booklocker tens of thousands of dollars to supply printed copies of its books to Amazon to comply with the Advantage program.
The judge is expected to rule on the motion to dismiss some time after Labor Day. (Both motions, as well as Booklocker’s original complaint, can be viewed in their entirety at www.writersweekly.com).
