Amazon hit with class action antitrust lawsuit claiming it colluded with major publishers to illegally drive up ebook prices by 30%

GettyImages 151364869 SANTA MONICA, CA - SEPTEMBER 6: Amazon CEO Jeff Bezos holds up the new Kindle Fire HD reading device in two sizes during a press conference on September 6, 2012 in Santa Monica, California. Amazon unveiled the Kindle Fire HD in 7 and 8.9-inch sizes, with prices starting at $199. (Photo by David McNew/Getty Images)
Amazon CEO Jeff Bezos holds two Kindle Fire HD devices during a press conference on September 6, 2012 in Santa Monica, California.

  • Amazon is facing fresh antitrust scrutiny after consumers filed a lawsuit Thursday accusing the company of illegally colluding with major book publishers to drive up prices for ebooks.
  • The lawsuit claimed that Amazon negotiated anticompetitive deals in 2015 with the “big five” publishers — Hachette, HarperCollins, Macmillan, Penguin Random House, and Simon & Schuster — that allowed them to “inflate” prices by up to 30%.
  • Amazon, which controlled nearly 90% of the ebook market as of 2018, was able to benefit immensely from the higher prices by charging consumers more, according to the lawsuit.
  • Apple was found guilty in 2013 of colluding with the same five publishers — using a similar pricing practice — to illegally fix ebook prices, and lawmakers in the US and EU have previously criticized Amazon’s alleged use of the so-called “most favored nations” clauses.
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Several ebook customers on Thursday filed a lawsuit against Amazon accusing it of violating antitrust laws by illegally colluding with the “big five” publishing houses to drive up the prices of ebooks.

The lawsuit alleged that Amazon entered into anticompetitive pricing agreements in 2015 with Hachette, HarperCollins, Macmillan, Penguin Random House, and Simon & Schuster that allowed the companies to artificially increase prices by as much as 30%.

Amazon, which controlled 89% of the ebook market as of 2018, according to a Bloomberg analysis cited in the suit, then used its dominance to benefit from those prices hikes by charging consumers more.

“Time and again, Amazon’s response to competition is not to compete on a level playing field, but to try to eliminate the competition – and that’s not how things are supposed to work,” Steve Berman, managing partner of Hagens Berman, the law firm that brought the suit, told Business Insider in a press release.

Amazon and Hachette declined to comment. The other publishers did not respond to requests for comment.

The lawsuit alleged that Amazon illegally inflated prices using a tactic called as “pricing parity,” which relies on “most-favored-nation” clauses. MFNs are, in the business context, agreements between buyers and sellers that ensure a buyer gets as good of a deal on that seller’s products as any other buyer in the market.

But the lawsuit – similar to previous investigations by lawmakers in the US and EU – accused Amazon of using MFNs to instead prevent publishers from selling their ebooks to consumers at a lower price on websites that compete with Amazon.

“Amazon’s behavior is astonishingly brazen, especially in light of past litigation and recent government actions in the US and abroad,” Berman said.

The EU reached an agreement with Amazon in 2015 over its use of MFNs, saying at the time that the practice “may have made it more difficult for other e-book platforms to innovate and compete effectively with Amazon.” That agreement barred the practice for five years, but only in the EU.

In its landmark antitrust report in October 2020, the House Judiciary Committee also slammed Amazon over the issue, saying: “Amazon has a history of using MFN clauses to ensure that none of its suppliers or third-party sellers can collaborate with an existing or potential competitor to make lower-priced or innovative product offerings available to consumers.”

Amazon previously used a similar pricing tactic to prevent other third-party sellers on its online marketplace from charging customers more on competing sites, ending the practice in March 2019 amid heightened antitrust scrutiny.

The scheme Amazon and the big five publishers are accused of employing isn’t new to the ebook industry, either.

In 2013, a federal court ruled that Apple illegally colluded with the same publishers to raise the prices of ebooks, sending the price skyrocketing virtually overnight, and the company eventually had to pay a $450 million penalty.

The court also barred publishers from colluding with each other or using MFNs for five years. According to Thursday’s lawsuit, that led to lower ebook prices in 2013 and 2014, before Amazon’s renegotiated deals in 2015 caused prices to surge again.

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An analysis of Amazon ebook prices included in the lawsuit that claims prices spiked after Amazon signed contracts with “big five” publishers.

The lawsuit, filed in the Southern District of New York, is seeking class-action status, and the plaintiffs are asking the court to reimburse consumers who were overcharged by Amazon competitors as a result of the alleged price-fixing as well as force Amazon and the publishers to abandon the practice.

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How to get library books on your Kindle for free and borrow the latest titles

Kindle in library
If you have a library account, you can borrow ebooks and read them on your Kindle.

  • You can get library books on a Kindle device through Amazon’s partnership with OverDrive, as long as you have a library membership with a participating institution.
  • You can download library books on your Kindle through your library’s website or using the OverDrive website. 
  • Not all libraries offer Kindle support, and some titles might be restricted and thus unavailable to download on your Kindle. 
  • Visit Business Insider’s Tech Reference library for more stories.

While Amazon’s Kindle allows owners to purchase or rent ebooks from the company itself, some people may not know that access to your latest favorites on your e-reader is only a library card away. Those with a membership at their local library can access electronic books for free, thanks to Amazon’s partnership with OverDrive. 

It should be noted that not all libraries support the OverDrive lending system, so you’ll need to verify that yours does before proceeding. Additionally, some Kindle Books such as picture books, read-alongs, and graphic novels will not be supported by the Kindle app or some devices. 

When checking out a book, whether through your library or the OverDrive site, you’ll want to find a “Device restrictions” link, or something similar, under the “Available formats” section to confirm compatibility. You can also read the book, once borrowed, within the OverDrive app if you don’t have your Kindle handy.

Once all of that is in place, you’re ready to get started. Here’s how to read library books on your Kindle. 

What you need to read library ebooks on your Kindle 

Checking out ebooks through OverDrive is a relatively straightforward process, but you will need a few things in addition to your library membership before proceeding. 

  • A Kindle device, the Kindle Cloud Reader, or the Kindle app, which is available for iOS and Android devices.  
  • An access pin to the OverDrive catalog, which can be obtained from your library. 
  • A Wi-Fi connection or a computer and USB cord through which to load your borrowed books onto your Kindle device

How to check out library books on a Kindle through your library’s website

1. Visit the website of your local library and log into your account. 

2. Use the library website’s search tool to find eBooks or Kindle books. 

how to get library books on your kindle 2
You can browse your library’s digital collections for Kindle ebooks the same way you browse for other titles.

3. Follow the website’s instructions for checking them out. This will usually involve going to a title’s details page and hitting the “Borrow” link. 

how to get library books on your kindle 1
You will need to use the “Borrow” link to begin the process for loaning out the ebook to read on your Kindle.

4. During checkout, there should be an option to sign in to your Amazon account with your username and password. Follow the process, including selecting the Kindle device you would like your book(s) to be sent to. 

5. Check that your Kindle is connected to WiFi. 

6. Finally, download the library book via the device’s Archived Items or Cloud section, both of which can be accessed through your Kindle’s settings. 

How to check out library books for your Kindle through the OverDrive website 

1. Go to www.overdrive.com and sign in. 

2. Open your library’s digital collection. 

3. Search for and find the book you want to borrow using the site’s advanced search, format filter, or by visiting an ebook’s details page and verifying that Kindle is an available format.  

4. Titles will appear in two different formats. One will feature only an image of the book cover with the title and author. The other will feature the book cover, title, and author, with a designation that it’s an “Ebook” and a link to “Borrow” it.  

5. If the format you see has the “Borrow” link, click it. 

6. If prompted, sign in to your library account. 

7. If a lending period is available, select it now. 

8. Choose “Borrow” again.

9. If the format only features the cover, author and title, click or tap the “More” option to be redirected to the ebook’s details page. 

10. Select “Borrow” before signing in to your library account, if prompted. 

11. Go to your Account dashboard and access the Checkouts page. 

12. The process for both formats should now be the same, and you should see the option to “Read now with Kindle.” Click that link. 

13. You’ll be redirected to Amazon’s site. If you aren’t signed in, do so. 

14. Choose “Get Library Book” and verify that the “Deliver to:” device is your Kindle if prompted. 

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