A federal judge in New York has officially dismissed price-fixing claims against Amazon and the Big Five publishers following a magistrate judge's finding that the cases lacked sufficient evidence to continue. But in dismissing the suits without prejudice, Judge Gregory Woods left open the slim chance that one or both of the potential class action complaints could be amended and re-filed.

The first case was filed in the Southern District of New York on January 14, 2021 by Seattle-based firm Hagens Berman (the first firm to sue Apple and five major publishers for colluding to fix e-book prices in 2011). It alleged that the Big Five publishers—Hachette, HarperCollins, Macmillan, Simon & Schuster, and Penguin Random House—were co-conspirators in a hub-and-spoke scheme with Amazon to suppress retail price competition and to keep e-book prices artificially high —specifically through the use of Most Favored Nations clauses (MFN).

A second suit was filed in March, 2021 (and later amended in July) on behalf of Evanston, Ill.-based Indie bookseller Bookends & Beginnings (on behalf of a potential class of booksellers). That suit accused Amazon and the Big Five publishers of a conspiracy to restrain price competition in the retail and online print trade book markets.

In a marathon hearing in New York on July 27, Magistrate judge Valerie Figueredo heard motions to dismiss in both cases. On August 3, less than a week after the hearing, Figueredo issued a report recommending that Woods, the presiding judge in the case, dismiss the e-books suit. And in a separate report on August 15, Figueredo recommended that Woods toss the bookseller case as well.

In two brief September 29 orders, Woods accepted Figeuredo's "well-reasoned" and thorough reports, dismissing the cases without prejudice, and giving the plaintiffs 30 days to file amended complaints.

The dismissals were largely expected. In filings and at the July 27 hearing, lawyers for Amazon and the publishers insisted the suits were nothing more than an ill-fated fishing expedition in the wake of the publishers' 2012 price-fixing conspiracy with Apple.

"I would submit to your honor that it is absolutely irrational for the publishers to enter into a conspiracy to make Amazon a monopolist in the retail market," Amazon lawyer John Schmidtlein told the court at the hearing, with Scott Lent, arguing for the publishers, noting that there was simply no evidence beyond similar contracts to suggest the publishers had colluded with Amazon and no “coherent theory” behind the case.

In her thoroughly reasoned 54-page reports, magistrate judge Valerie Figueredo agreed.

“The mere fact that the Publishers entered into those agreements with Amazon is not direct evidence of a conspiracy to fix eBook prices and eliminate retail competition,” Figueredo concluded in her 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."

For industry observers, the filing of the cases in early 2021 came with a feeling of déjà vu—the second publisher price-fixing suit in a decade. But the initial complaint was noticeably thin, observers pointed out, and was based largely on claims made in an October 2020 congressional subcommittee report on competition in the digital market which, among other things, detailed some of Amazon’s hardball practices in the e-book market.

But as lawyers for Amazon and the publishers have maintained from the outset, the claims made little sense: After scheming with Apple to blunt Amazon's market power, why would the publishers then collude to essentially hand monopoly power to Amazon? And the most significant challenge facing the plaintiffs, legal experts told PW at the time, was to show some kind of evidence of a joint agreement between Amazon and the publishers beyond the presence of parallel terms in their agreements. In the end, no such evidence ever materialized.