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POD Publisher Files Class Action Lawsuit Against Amazon

On his blog Morris Rosenthal reports on a class-action lawsuit filed today against Amazon by POD publisher BookLocker.com:

Today a class action lawsuit was filed in response to Amazon’s threat to remove the "Buy" buttons of publishers who refuse to sign up with their on-demand printing subsidiary, Booksurge. If certified, the class action will most likely include all publishers who use on demand printing to print their books for distribution. If it functions like the class action lawsuits involving credit card or telephone billing that we all find ourselves party to on a regular basis, publishers will automatically be included unless they opt out. The primary plaintiff in the suit is BookLocker.com, Inc., the company that first broke the silence about the heavy-handed tactics Booksurge was using against Lightning Source’s larger publisher customers.

The full complaint is available as a PDF, but I’ve taken the liberty of posting it here via SlideShare as well (click here if you don’t see the embedded doc below):

Essentially, the complaint alleges Amazon is in violation of the Sherman Act by engaging in "tying":

An arrangement whereby the seller of some product or service requires, as a condition to the sale of that product (the tying product), that the buyer purchase some additional product (the tied product). The tying arrangement is unlawful when the seller has some power over the market for the tying product. Tying arrangements are generally per se illegal, assuming that the selling firm has the market power to force the arrangement upon its customers.

The meat of the complaint is in paragraphs 38 and 39:

Amazon forces POD publishers to use BookSurge for printing services when they might otherwise prefer to purchase such printing services elsewhere.

Amazon’s practice of tying printing services to sales in the Online Book Market unreasonably restrains trade and is unlawful per se under Section 1 of the Sherman Act.

In light of recent moves by Amazon (including reports of bullying in the UK), litigation was an inevitability. And this isn’t the only pending lawsuit Amazon’s involved in (it’s not even the only anti-trust lawsuit Amazon is involved in — Gerlinger v. Amazon.com is still under appeal). Amazon lists seven items in the "Legal Proceedings" section of its 2007 annual report, among them patent infringement and breach of contract, fairly standard for a public company of their size (and they’re on the plaintiff side of the aisle against New York State on sales taxes). It will be interesting to see whether other POD publishers join the fray.

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  • Dr. Donald Thronburg

    I have great idea!! Why doesn’t everyone just be a good guy, and don’t pull any “fast ones” on the public.

    Be an honest “good buy” who creates a win-win for everyone…we would all feel better, and have a better world!! That can’t be that hard.

    Dr T

  • -karl

    Hey Doc,

    I don’t know if your idea is so great. Most of your post involves relative terms (great,good,better,hard) mixed with all-inclusives (all,everyone) which, like opinions, can never be argued, universally defined or resolved.

    Besides the inherent impossibility of the concept, if every transaction was win-win for everyone all the time, would we (everyone) feel better?

    I’d be bored silly. Why bother doing anything? What’s the incentive? How would the world be “better”? for whom would it be better?

    What is “feeling” and what is “better”? Ask ten people get ten definitions. Ask “everyone” get “every” definition. It can’t be that hard to find a solution that everyone will agree with, right?

    Sounds like a case of capitalism vs. communism and we’ve seen the results of those great ideas.

  • Nick

    Hey Karl loosen up man! Dr T was speaking tongue in cheek! What’s up? your girl run off with another guy as she couldn’t take the politics? Have a beer and forget it.

    DrT, we’re all gonna get ripped off, the only way to deal with it is just stop buying crap! Yes, let’s all stop buying all this junk that only ends up in a car boot sale anyway. Does anyone actually read the books they buy? Do they have time in between shopping? Let’s start a revolution and only buy what we need.

  • Dr T. Nice idea… albeit somewhat unrealistic within the current state of human consciousness. I’ll go with Nick and assume it was said in jest.

    Karl… dude… looks like Dr T. has given you a dose of medicine that you didn’t see coming. Quite some reaction you’ve had there. Nice one.

    Nick… you’ve also had a relatively big reaction… this time to Karl. Great going.
    Actually for me books are a luxury item that I buy when it’s important to me, as opposed to something I frivolously purchase and don’t read. On the contrary, I only buy books I want to read and then I do proceed to read them. As they are just about always non-fiction very few of them end up in car boot sales (or anything like that) as I keep them on hand as reference material and for lending to people.

    You say “we’re all gonna get ripped off”. This is contrary to my experience, so “all” simply does not apply. I don’t spend much time shopping. I have plenty of time for it and for other activities.
    What junk are you buying that you’d rather not buy?

    Regards…
    Jonathan