A group of three independent bookstores have filed an anti-trust lawsuit against Amazon and the "Big Six" book publishers over Amazon's confidential agreements with these publishers, and Amazon's used of a closed, proprietary DRM system that is not accessible or inter operable with non Amazon devices and software.
The plaintiffs, the Book House of Stuyvesant Plaza, based in Albany, N.Y., Fiction Addiction in Greenville, S.C., and Posman Books of New York City, argue that deals made between Amazon and the Big Six (Hachette, HarperCollins, Macmillan, Penguin, Random House and Simon & Schuster) amount to a monopolization of the eBook marketplace, and Amazon's use of proprietary DRM ensures that purchases made on Amazon can only be used on Amazon devices and Amazon software, and purchases made outside of Amazon cannot be readily used on Amazon devices.
The plaintiffs further suggest that the confidential agreements made between Amazon and the publishers may constitute a violation of the Sherman Act and unfairly restrains trade and commerce, especially given that these publishers have refused to enter into similar agreements with smaller booksellers. Publishers generally prefer the use of DRM to protect their eBooks from piracy, which may put smaller booksellers, without their own DRM system, at a disadvantage. Independent booksellers can implement their own DRM of course, but it is usually prohibitively expensive, and the DRM would most likely not be supported by popular devices like Amazon's Kindle, or other common eBook readers.
This allows Amazon to protect their market dominance, some 60% of the eBook market, by ensuring the smaller players cannot sell the most popular eBooks, not allowing them to sell content which uses Amazon's DRM, and not allowing the books the smaller bookstores do sell to be easily used on Amazon devices, the booksellers claim.
The solution, the plaintiffs argue, would be for Amazon and publishers to start using inter-operable DRM or for publishers to allow booksellers to sell DRM-free copies.
"We are seeking relief for independent brick-and-mortar bookstores so that they would be able to sell open-source and DRM-free books that could be used on the Kindle or other electronic ereaders," said Alyson Decker, lead counsel for the bookstores, in a phone interview with The Huffington Post.
Amazon did not issue a comment, citing that the company does not comment on active litigation.
A copy of the class action complaint can be read below: