Amazon and six major publishing houses are using software designed to protect copyrighted electronic books to stifle competition among smaller “brick-and-mortar” retailers, according to a class action lawsuit joined by a local bookstore.
The Book House of Stuyvesant Plaza in Guilderland is among three independent retail shops that filed the lawsuit in a federal court in New York City earlier this month. The complaint accuses Amazon and its six publishing partners of using digital rights management access control technology to prevent retailers from selling so-called e-books, thereby creating a monopoly for the online behemoth.
The coding included with e-books purchased for Amazon’s popular e-book readers — Kindle and the Kindle Fire — initially prevented them from being read or transferred to other devices. Applications have since been released letting users install a program that allows them to decode e-books sold through Amazon.
The lawsuit accuses Amazon of entering into a private contract that would allow the company to use digital rights management technology to prevent e-books produced by the six publishers from being sold by independent retailers. In short, only e-books with the digital rights management coding used exclusively by Amazon can be read on Kindles, meaning anyone using the device is forced into buying the digital literature from the company.
“This means that if a consumer would like to read an e-book published by any of the big six and they choose to buy it from Amazon, they must read it on a Kindle device or via a Kindle app,” the lawsuit states. “And if a consumer owns a Kindle device and wants to read an e-book on their Kindle that was published by any of the big six, they must buy the book from Amazon.”
Susan Novotny, the owner of the Book House, deferred comment to the Los Angeles law firm representing the three retailers. An attorney for the company did not return a call for comment this week.
Amazon and the six companies haven’t responded to the lawsuit. A spokesman for Simon & Schuster released a statement this week pledging the company would fight what it considers a legal action without merit and questioning why the retailers wouldn’t work to grow their business with the company rather than resort to a lawsuit.
The lawsuit claims the six publishers generate 60 percent of all the revenue made from print books in the United States. They also collected 85 percent of the revenue generated by the sales of titles from the New York Times Best Seller’s List, according to the lawsuit.
Amazon’s Kindle has roughly 60 percent of the e-book reader market, with Barnes & Noble’s Nook presenting the only real competition, the lawsuit states. Amazon also boasts that it carries more than 180,000 “exclusive titles” not available in e-book from any other retailer.
“Competition, including price competition at the consumer level for e-books has been and will continue to be restrained, suppressed or eliminated as a result of the monopoly described herein,” the lawsuit states. “Competitors, actual and potential, have been and will continue to be restrained from vigorously competing with one another for selling e-books as a result of the monopoly described herein.”