Revisiting the Class Action Suit Against Amazon

All the interest in Amazon backing down on the text-to-speech initiative (boy, don't you know the folks at Audible.com had a thing or two to say to their boss Jeff Bezos?) reminded me to do an update on the class action lawsuit filed by Booklocker.com against Amazon.

This goes back to last year when Amazon informed publishers who used print-on-demand technology (POD) that they would need to use Amazon's BookSurge POD unit if they wanted to sell their books directly on Amazon.com. You can read my post from last March here.

Two months later, on May 19, 2008, BookLocker.com filed a federal class action lawsuit against Amazon.com in the U.S. District Court of Maine, claiming improper conduct on the part of Amazon. The lawsuit alleged:

Amazon’s improper conduct has presented Plaintiff and members of the Class with an untenable choice: either continue to lose business due to the improper restriction of the Direct Amazon Sales Channel or be forced into signing with BookSurge.

Earlier this month, on February 10, BookLocker's attorneys filed an amended complaint to address issues the judge raised and to reiterate their request for a jury.

I found the new complaint much more direct in its language:

Plaintiff BookLocker.com, Inc. (“BookLocker” or “Plaintiff”), on its own behalf and on behalf of the class defined herein, brings this antitrust action to obtain injunctive and monetary relief against Amazon.com, Inc. (“Amazon”) with regard to an anticompetitive tying arrangement that violates section 1 of the Sherman Act, 15 U.S.C. § 1 . . .

Amazon’s practice of requiring POD publishers to use BookSurge’s printing services in order for Amazon to sell those books through the Bookstore constitutes an illegal tying arrangement that has caused, and will continue to cause, damage to Plaintiff and the Class. Specifically, Amazon’s unlawful tying arrangement prevents POD publishing companies, such as Plaintiff, from selecting a printing service on a competitive basis, but rather coerces publishing companies into using BookSurge’s printing services, even though those services are both more expensive and result in an inferior product than the printing services offered by BookSurge’s competitors.

Last spring I took a lot of grief from other authors and bloggers because of my extreme negative reaction to this move by Amazon. A common response was that this was only going to affect the small POD publishers and why should anyone else care?

I tried to point out in a post here that I saw this initiative as the first of a series of moves Amazon would take in what I believe is a much larger scheme to dominate the publishing industry.

Two weeks after that post, Tim O'Reilly wrote the following on his blog here:

Amazon has seemingly embarked on a number of strategies to lock-in both consumers and publishers.

It is a free-market economy, and competition is the name of the game. But as Amazon's market power increases, it needs to be mindful of whether its moves, even those that may be good for the company in the short term, are ultimately destructive of the ecosystem on which they depend.

I'll be watching this lawsuit with enormous interest.