Following an amended complaint filed this week, the Big Five publishers are now named as defendants in a consumer class action lawsuit that alleges a conspiracy with Amazon to fix prices in the e-book market.
The news comes after the initial complaint, first filed in the Southern District of New York on January 14 by Seattle-based firm Hagens Berman, portrayed the Big Five publishers—Hachette, HarperCollins, Macmillan, Penguin Random House, and Simon & Schuster—as "co-conspirators" in a bid to restrain competition in the e-book market, but had named only Amazon as a defendant. The amended complaint, filed on February 4, now pulls the publishers into the suit.
The claim in the suit remains unchanged: an allegation that "Amazon and the Big Five agreed to price restraints" that caused consumers to "overpay" for e-books. Specifically, the suit alleges that the use of most favored nation clauses in Amazon's contracts with the publishers effectively ensures that Amazon can’t be underpriced in the e-book market—a “contractual stranglehold,” lawyers argue, that prevents existing retail competitors from expanding their market share and dissuades new competitors from entering the e-book market.
Among the relief requested, the suit seeks monetary reimbursement for a proposed consumer class made up of people who purchased e-books through Amazon’s competitors, as well as damages, and injunctive relief that would require Amazon and the publishers to “stop enforcing anti-competitive price restraints.”
Hagens Berman was the first to sue Apple and five of the then six major publishers for e-book price-fixing in 2011, in a case that would eventually draw suits from a number of states and the Department of Justice. The five publishers settled their claims for some $166 million in consumer credits, while Apple lost at trial and paid some $400 million in to consumers.