Independent bookseller suit against Amazon tossed, while Barnes & Noble faces SEC investigation
December 10, 2013 | 11:44 am
Pro tip: if you’re going to file a lawsuit alleging "conspiracy," have more evidence in hand than just "they did something I don’t like." Andrew Albanese reports at Publishers Weekly that Federal Judge Jed Rakoff just tossed out a lawsuit filed by independent booksellers alleging a conspiracy between the Big Six publishers and Amazon to restrain trade and lock rivals out of the Kindle platform. (Gosh, those publishers sure are busy, to be involved in one conspiracy with Apple against Amazon, and then another conspiracy with Amazon against everybody else at the same time! How did they ever keep everything straight?) We also covered this lawsuit when it was filed back in February.
The problem was the accusers did not have much in the way of evidence to support their claims, and Rakoff was wary of permitting a random fishing expedition to let them see if they could dig anything up. (Sorry, guys, no fishing in the Amazon!) He noted that publisher contracts call for DRM to “prevent copyright violations,” which is a different kettle of fish (from the Amazon!) than intending it to restrain competition, and that it wouldn’t make any sense for publishers to try to create such restrictions when it’s in their interest to sell as widely as possible.
He also mentions that there are other platforms, such as Kobo, that those locked-out competitors can sell through. (Oddly, there’s no mention that it’s also possible to sell books that are Kindle-compatible without DRM, as Baen’s been doing for years.) In the end, Rakoff noted, “no business has a duty to aid competitors.” Amazon’s platform is its own, and if you don’t like it go and make a different one.
I can’t say I’m terribly pleased with Amazon’s DRM myself, but filing suit with scanty evidence is not the way to go about getting rid of it. Being really good at competing is not a crime, and so far nobody’s been able to pin any crimes on Amazon yet.
But you can’t say the same about poor Barnes & Noble. The SEC is investigating allegations that B&N improperly shifted expenses between the Nook and Retail segments of the business. B&N’s Retail segment has been doing pretty well, while its Nook segment has been sinking like a stone. B&N might be considering trying to sell the Nook side of the business to another company, and it would not be surprising if they tried to make it look a little better than it actually was so they might have better luck finding a sucker to take it off their hands. (Found via The Digital Reader—and while I was writing this, Paul covered it, too.)
The publishers must be beside themselves. I can just imagine the execs standing there, tearing their hair out, going, “No! No! Don’t investigate Barnes & Noble, they’re the good guys! Investigate Amazon! Amazon, dammit!”
The publishers and their advocates, such as Bob Kohn, sure do talk a good game about how Amazon is the true evil anti-competitive predatorily-pricing trust-meister. But so far, it seems like talk is all it is. Have they even tried to file anti-trust complaints against Amazon? Or sue Amazon for its malfeasance? Doubtful. After all, they still have to do business with Amazon, and they’re afraid Amazon might retaliate. And Amazon accounts for most of their sales.
Of course, Amazon cutting them off wouldn’t exactly be good for its business, either, since people come to Amazon in the first place because they want those publishers’ books. But Amazon has enough money that it could probably hold the stare longer than the publishers without blinking. So in the end, what we have is a sort of Mutually-Assured Destruction of the book world. The publishers grumble a lot about Amazon, just like the Soviet Union grumbled about the US in the Cold War days, but apparently actually trying to do anything about it wouldn’t accomplish anything constructive.
Still, you would think that if Amazon were doing something illegal, someone would call them on it. Law-enforcement agencies don’t need a complaint from someone else to investigate a crime; they can look into it if they think there is one. And not only did the DoJ look at Amazon’s practices when gathering evidence for the publishers/Apple anti-trust suit, but they’ve gotten enough attention over the last couple of years that if an investigation were going to happen, you would think it would have. Germany did investigate Amazon earlier this year over its Marketplace lowest-price clause, but that came to a conclusion after Amazon agreed to drop the clause. If Amazon is doing something wrong, where’s the investigation of it?