The thesis of the conspiracy between Amazon and the publishers deemed not very credible

A gigantic trial was on the way, but the observations of the American judge Valerie Figueredo rather suggest a vast misunderstanding, and a soufflé which should fall quickly. In its conclusions, it considers that the thesis of a conspiracy between the five largest American publishers and Amazon to artificially fix the price of digital books is not plausible, and suggests to Gregory H. Woods, responsible for judging the case, to file complaints without follow-up.

Mentioned in a complaint in January 2021, then taken up in three other proceedings, the agreement between Hachette, HarperCollins, Macmillan, Simon & Schuster, Penguin Random House and Amazon would have harmed consumers, by making them pay more for their digital books. A form of agreement, therefore, hindering free competition and for which compensation was expected.

The law firm Hagens Berman, which had filed a complaint with a New York court, took the case very seriously, and for good reason: the firm had led the class action against Apple, in 2011, for the same facts of agreement on the prices of digital books, where Hachette, HarperCollins, Simon & Schuster, Penguin and Macmillan were already cited. Apple was ordered to reimburse consumers $400 million when the publishers reached an agreement with the courts for $166 million.

Simple distribution agreements

In her report, Judge Valerie Figueredo considers that the mere existence of distribution agreements between Amazon and each of the publishers cited in the complaint does not constitute proof of an agreement between the various players. The contractual terms “are not illegal in themselves” and “are not direct evidence of a conspiracy to determine the prices of digital books and eliminate competition”, she assures.

According to Figueredo, the distribution agreements with Amazon were only intended to give publishers some control over the sale of their own digital books, given the retailer’s dominant position in the sector. In short, it was better to take the lead and define acceptable conditions rather than being overwhelmed later.

READ: Four complaints accuse Amazon of conspiring with publishers

In exchange, Amazon obtained for its part “most favored nation” clauses, which allow a reseller to obtain the guarantee that he will always obtain the most favorable conditions offered by a supplier – publishers, in this case .

Figueredo concludes, in his report, that the publishers did not agree among themselves to define the terms of these distribution agreements: [C]Every publisher should have rationally expected other publishers to put in place similar agreements with Amazon, whether or not a pre-existing agreement between the publishers exists.

Replace Apple with Amazon

Amazon and the five publishers implicated, of course, are going in the direction of a classification without follow-up to the complaints, and are thus supported, in a way, by the judicial authority. The decision, however, depends on Gregory H. Woods, now informed by the elements gathered by Valerie Figueredo.

On the plaintiffs’ side, lawyer Steve Berman sticks to his experience in the Apple case: “Replace Apple with Amazon and it’s the same situation, with the same publishers as in the case we have. won,” he explained to Law360. For him, the conclusion is therefore clear: publishers and Amazon have obstructed lower selling prices for digital books.

After Apple’s conviction in 2013, a two-year period was imposed during which resellers could freely set the selling price of ebooks marketed. It was only at the end of this period that new agency contracts, revised, could be signed, with Amazon as the main beneficiary, as advanced by the new complaints now being examined by the American courts.

There remains therefore the interpretation of the judge, and the documents at his disposal, to determine whether the contracts fall under reasonable commercial agreements or agreement to the detriment of free competition…

Photography: illustration, Kristina Alexanderson, CC BY-NC-ND 2.0

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