Magistrate Calls For Dismissal Of Amazon Ebook Antitrust Suit

Plaintiffs’ lawyers in an antitrust class action alleging that Amazon conspired with five leading US publishers to fix the price of ebooks argued in a new brief that a Manhattan federal magistrate erroneously disregarded obvious evidence of collusion when she recommended the dismissal of their case last month.

The basic facts presented in their amended complaint, in combination with elementary economic principles, are enough to justify their allegations, wrote plaintiffs’ lawyers from Hagens Berman Sobol Shapiro and Sperling & Slater. Within the course of several months in 2014 and 2015, the plaintiffs’ firms said, the five big publishers – Penguin Random House LLC; HarperCollins Publishers LLC; Hachette Book Group Inc; Macmillan Publishing Group LLC; and Simon & Schuster Inc – each signed a pricing agreement with Amazon that allowed publishers to set ebook prices but locked in Amazon’s 30% “agency” fee for every ebook sale and guaranteed that Amazon’s prices could not be undercut by other ebook sellers.

Those deals, according to plaintiffs’ lawyers, accomplished what both Amazon and the publishers wanted: They cemented Amazon’s overwhelming dominance of the ebooks market while allowing publishers to jack up prices.

“Those allegations are sufficient under the Sherman Act to set forth a prima facie antitrust claim against Amazon, regardless of any horizontal agreement among the publisher defendants,” plaintiffs’ lawyers argued to U.S. District Judge Gregory Woods of Manhattan, who will decide whether to adopt the Aug. 3 report and recommendation from U.S. Magistrate Judge Valerie Figueredo. “The expected result under basic economic theory (and the result in fact) is what plaintiffs plead here: supracompetitive consumer prices.”

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