Ebook firms sued for antitrust conspiracy

An antitrust class action case against Hachette, Harper Collins, Macmillan, Penguin, Simon & Schuster, Random House, Apple, Amazon and Barnes & Noble started in a New York district court.

The suit, filed by Rhonda Burstein, alleges the defendants engaged in a horizontal conspiracy consisting raising, fixing, stabilising and maintaining the retail prices of Ebooks at an artificially high level.

It’s alleged the publisher defendants, along with Apple, Amazon and Barnes & Noble “agreed to adopt a new, so-called agency distribution method that prohibits online retailers from deviating from the retail prices dictated by the publishers”.

It continues: “Because these agreements unequivocally foreclose price competition with regard to Ebook content, they constitute unreasonable restraints of trade that violate federal and state antitrust laws”.

The alleged conspiracy raised the price of best seller Ebooks from $9.99 to an average of $12-$15, the filing alleges – that’s an increase of between 33 percent to 50 percent.

“The price of an Ebook in many cases now approaches – or even exceeds – the price of the same book in paper even though there are almost no incremental costs to produce each additional Ebook unit.”

The introduction of the Apple iPad and Barnes & Noble’s Nook allowed the defendant publishers to collude with retailers to up the price of Ebooks.

While Amazon had originally defied joining the alleged cartel, it “quickly entered the conspiracy and formed agreements with five Publisher Defendants to set prices through the agency model”.

The plaintiffs are demanding a jury trial.