Plaintiff booksellers this week filed an opposition motion urging the court not to dismiss their lawsuit against Amazon and the big six publishers, arguing that there is indeed enough evidence of restraint of trade to keep the case moving forward. The filing comes in response to independent motions filed two weeks ago by Amazon and the big six publishers, in which both defendants asked the court to toss the suit as without merit. But the booksellers say a basic reading of the facts is more than enough to sustain their action.
“Having developed and successfully exploited its Kindle e-book reader, which dominates the e-reader market, Amazon entered into written contracts with the Big Six that facially blessed the use of an Amazon controlled digital rights management technology (“DRM”) on the Big Six’s e-books,” the bookseller motion notes. “The restrictive DRM, in conjunction with the contracts with the Big Six, operates to protect Amazon’s e-reader monopoly. In addition, independent brick-and-mortar bookstores have been foreclosed from effective entry into the e-book market. As a result, consumers of e-books have been deprived of the benefits of choice and of the innovations that would surely have evolved had Amazon’s monopolies been challenged.”
In their motions to dismiss, both Amazon and publishers argued that the booksellers could not show “any actual adverse effect on competition” and that the suit was based on “naked conclusions that Amazon’s use of ‘device specific’ DRM technology harms competition.”
The booksellers, however, reply that Amazon and the publishers are either misreading the complaint, or attempting to “rewrite” it for the court, in order to facilitate a dismissal. In fact, what the publishers deem “implausible,” they state, will be confirmed by contracts and documents once produced. “The big six do not, and cannot, deny that they each entered into agreements with Amazon, and then, with full knowledge of the market and the technology being used and available, renewed those agreements regarding the DRM technology that was to be used on all of the e-books published by the big six and distributed by Amazon,” the booksellers state. “Discovery will reveal that there was indeed a meeting of the minds between the Big Six and Amazon.”
The initial suit was filed in February in the U.S. District Court for the Southern District of New York, and contends that Amazon along with Random House, Penguin, HarperCollins, Simon & Schuster, Hachette Book Group, and Macmillan signed contracts “specifically designed to limit the use of digital content” to various Kindle devices, while the publishers have not entered into any agreements with independent bricks-and-mortar or independent collectives to sell e-books.
The three named plaintiffs (The Book House of Stuyvesant Plaza of Albany, N.Y.; Fiction Addiction of Greenville, S.C.; and Posman Books of New York City) seek to represent a class of independent brick-and-mortar independent bookstores, and are seeking an injunction prohibiting the publishers and Amazon from “selling e-books with device and app specific DRMs,” while also requiring the big six publishers to allow independent bookstores to directly sell “open-source DRM e-books.”
The next round of replies are due April 18, and oral arguments on the motions are set for April 25.
