In separate court filings this week, lawyers for Amazon and the Big Five publishers said that a revived class action suit accusing them of colluding to fix e-book prices is not significantly different from the case that was dismissed in September for lack of evidence, and should not be allowed to go forward.
“Defendants’ actions remain better explained as independent, self-interested business decisions than as an illogical conspiracy to entrench Amazon at the publisher defendants’ expense,” reads a letter from the publishers’ lawyers, requesting a pre-motion conference ahead of filing a formal motion to dismiss. “To state a claim, plaintiffs must—but fail to—allege concerted action and a specific intent to monopolize.”
“While the [second amended complaint] has swelled plaintiffs’ allegations by more than 30 pages and 100 paragraphs, those additions overwhelmingly consist of repetitions of the same alleged facts from the [complaint] that the Court has already determined do not state a claim,” reads a letter from Amazon lawyers. “[The second complaint] should be dismissed with prejudice for all of the same reasons that the [case] was dismissed, plus additional reasons created by plaintiffs’ change in legal theory.”
The e-book case was first filed in the Southern District of New York on January 14, 2021, by Hagens Berman, the first firm to sue Apple and five major publishers for colluding to fix e-book prices in 2011. In addition, a second, associated suit was filed in March, 2021 (and later amended in July) on behalf of Evanston, Ill.–based indie bookseller Bookends & Beginnings, accusing Amazon and the Big Five publishers of a conspiracy to restrain price competition in the retail and online print trade book markets.
Amazon and the publishers have insisted from the outset that the suits are baseless and "irrational," and, crucially, that there is simply no evidence to suggest that the Big Five publishers coordinated to hand monopoly power to Amazon. And after a marathon July 27 hearing, magistrate judge Valerie Figueredo agreed, recommending that the presiding judge, Gregory Woods, toss both cases for lack of evidence. In two brief September 29 orders, Woods accepted Figeuredo's "well-reasoned" and "thorough" reports, and dismissed the cases.
But in a twist, Woods dismissed the cases without prejudice, giving the plaintiffs a chance to file amended complaints. And in a 125-page Second Consolidated Amended complaint, filed on November 21 in the Southern District of New York, lawyers led by Hagens Berman once again accused Amazon and the Big Five publishers—Hachette, HarperCollins, Macmillan, Simon & Schuster, and Penguin Random House—of a hub-and-spoke agreement to eliminate price competition from the e-book market in violation of the Sherman Act, specifically through the use of a "most-favored nation" clause and other contract terms.
The revived complaint adds details about the "supracompetitive" profit margins on e-book sales Amazon is able to reap and invokes Florence Pan’s October 31 decision to block Penguin Random House’s acquisition of Simon & Schuster, in which Pan suggested the major publishers showed signs of “coordinated” behavior. Still, it is unclear whether this new amended complaint can overcome the key deficiency of its predecessor, specifically the lack of any direct evidence suggesting coordination among Amazon and the publishers.
“The mere fact that the publishers entered into those agreements with Amazon is not direct evidence of a conspiracy to fix e-book prices and eliminate retail competition,” Figueredo concluded in her initial August 3 report. “Because the publishers compete in a concentrated market with a single dominant retailer, each publisher could have rationally expected that the other publishers would have reached the same conclusion about the need to secure an agreement with Amazon."
Figueredo has set a pre-motion conference for January 5.
