Last month, the “big six” book publishers – Hachette, Holtzbrinck, Penguin, Harper Collins, Random House, and Simon & Shuster – managed to extricate themselves from a lawsuit over allegations of conspiring with Apple to price fix its eBook releases. Now, they’ve found themselves faced by another lawsuit over the possibility that their digital practices broke anti-trust laws. This time, the lawsuit may end up changing the eBook market in unexpected ways.
The New York Times has a report about a lawsuit filed at the end of last week in Federal District Court for the Southern District of New York by three small bookstores claiming that they were being forced out of the digital market by an agreement between the large publishers and, ironically, Amazon – the company that the earlier anti-trust-breaching agreement was reportedly designed to hurt. The complaint argues that the existing agreements between the publishers and Amazon – agreements that will have to be replaced as a result of the publishers’ settlements with the Department of Justice – “unreasonably restrain trade and commerce in the market of e-books sold within the United States.”
According to the Times report, the lawsuit’s argument revolves around the somewhat nebulous idea that the publishers in question have all entered into a secret agreement with Amazon that requires them to code their eBooks in a way that make them only readable on Kindles or devices with Kindle apps. The method, the small stores argue, unfairly trains the eBook audience to conflate digital publishing with Amazon and the Kindle specifically. While this is clearly true for Kindle editions of the digital releases, it’s blatantly untrue of, say, Apple iBooks editions of the same titles or other digital editions, which makes the complaint somewhat confusing.
The lawsuit argues that the publishers should instead offer their eBooks with open-source coding that makes them readable on any device using any software, pointing to Apple eventually moving to offer music free of Digital Rights Management-software after a series of legal challenges. That comparison feels false, however; surely the more appropriate Apple analogy would be the fact that it offers iTunes downloads as mp4 files locked to Apple devices instead of mp3s playable on other devices. The legal action seeks an immediate injunction to the practice, as well as damages resulting from the estimated lost sales it may have induced.
Presuming that this lawsuit isn’t immediately dismissed by the court, especially in light of the new agreements required by the DOJ settlements each of the publishers have agreed to, it’ll be interesting to see what effect this will have on eBooks and the digital market on the whole. The aim is clearly to open the market up to more retailers, but it’s not unimaginable that a legal order to remove DRM from eBooks may change publishers’ attitudes towards the format for fear of accidentally facilitating piracy with every new release.
The three booksellers behind the suit – Posman Books, the Book House of Stuyvesant Plaza, and Fiction Addiction – report that the lawsuit is a class action filed on behalf of other independent booksellers in addition to themselves. In response to the lawsuit, Amazon says, as matter of company policy, it will not comment on ongoing litigation.