Booklocker Files Amended-Complaint Against Amazon

April 16, 2009
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April 16 – April 23, 2009 Edition

Booklocker Files Amended
Complaint Against Amazon

While rumors abound on the Internet about Amazon’s removal of sales rankings from "adult" titles (which the company now claims was just a glitch), an even more far-reaching legal battle continues between BookLocker.com, Inc. and Amazon.com, Inc.

Amazon last February notified publishers that its bookstore would only directly sell to consumers Print-on-Demand books that are printed by its subsidiary, BookSurge, a “tying arrangement” that Booklocker says violates the Sherman Act and unfairly restricts competitors. BookLocker.com, Inc. an independent print-on-demand (POD) publishing company.

On March 19, Amazon quietly motioned the court to dismiss Booklocker’s class action case, filed last May in behalf of itself and all POD publishers and publishing companies in the U.S. who either had books listed for sale at Amazon or have had an application to have books listed for sale in the bookstore from February 2008.

In the March motion, Amazon argued that the Sherman Act “does not prohibit ‘tying’; it prohibits ‘contracts . . . in restraint of trade.”

This week, according to lawyers for Booklocker, Amazon withdrew its Motion to Dismiss in a court hearing. But Booklocker subsequently has filed an amended Complaint and Amazon has filed yet another Motion to Dismiss. Anthony D. Pellegrini of Rudman & Winchell, counsel for Booklocker, said his client has not yet replied to the renewed Motion to Dismiss and that the case is “in the earliest stages” with no information to provide at this time. Attorneys did not say what was in the newly amended Complaint form Booklocker.

Seth Klein, attorney withr Booklocker’s Lead Council Izard Nobel LLP said “We are currently in the process of responding to Amazon’s renewed Motion to Dismiss. We expect to file our brief within the next few weeks.”

The suit charges that Amazon is the dominant channel through which consumers purchase POD books in the online book market, accounting for a 70% share of that market.

Amazon last year notified publishers that its Direct Sales Channel, the preferred way consumers buy books, will be available only to publishers who print their books at BookSurge. On March 26, 2008, Amazon notified BookLocker that it would only continue to sell BookLocker's POD books through the direct channel if BookLocker agreed to print its books through BookSurge, rather than through Lightning.

Amazon's sale of books in the online book market is a separate service from the printing of POD books by BookSurge, the original suit says. Amazon has market power for the sale of books in the online market. The effect of the move on interstate commerce is substantial. "Amazon forces POD publishers to use BookSurge for printing services when they might otherwise prefer to purchase such printing services elsewhere," the suit says. The policy "unreasonably restrains trade and is unlawful per se under Section 1 of the Sherman Antitrust Act." Amazon has harmed competition for printing services and for consumers, the suit claims. BookLocker is asking for injunctive relief under the Clayton Act and wants the court to enjoin Amazon from continuing or engaging in the the alleged "unfair and anti-competitive activates" The suit asks for damages, penalties and other monetary relief including treble damages, and demands a trial by jury be held.

In related news dated June 2, 2008, the Long Riders Guild Press, publisher of Horse Travel Books, is seeking Government protection from Amazon. The Press says it is a victim of "an unprecedented bid to seize control of the world's POD publishing business."

The Press says Amazon.com has attempted to establish itself as the world's premier book printer. "This undeclared war against the world's authors began when Amazon purchased a second-tier Print-On-Demand company named BookSurge. Once Amazon acquired its own printing capabilities, it launched an extraordinary campaign to establish a global monopoly designed to control authorization, production, sale, distribution and profit from the planet's literature.

"To enforce this insidious crusade, any publisher who resisted Amazon's brutal offer to capitulate was punished by having their titles' "Buy Buttons" removed. One publisher alone had 70,000 books sabotaged in this manner.

"The American Society of Journalists and Authors, the US Authors Guild, the National Writers Union of America, the Small Publishers Association of North America and the Publishers Marketing Association have all condemned Amazon's tactics and asked the Federal Government to investigate what many believe is a clear violation of corporate monopoly laws."

He said developments in the case will be posted on BookLocker’s website at http://antitrust.booklocker.com/.

Wikipedia defines the Sherman act this way:

The Sherman Antitrust Act (Sherman Act,[1] July 2 , 1890 , ch. 647, 26 Stat. 209, 15 U.S.C. § 1–7 ) was the first United States Federal statute to limit cartels and monopolies . It falls under antitrust law .

The Act provides: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal".[2] The Act also provides: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony [. . . ]”[3] The Act put responsibility upon government attorneys and district courts to pursue and investigate trusts , companies and organizations suspected of violating the Act. The Clayton Act (1914) extended the right to sue under the antitrust laws to "any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws."[4] Under the Clayton Act, private parties may sue in U.S. district court and should they prevail, they may be awarded treble damages and the cost of suit, including reasonable attorney's fees. [5]

Meanwhile, the Internet is ablaze with outrage over Amazon’s removal of sales rankings for some of its’ adult content. Amazon has responded that it was a glitch in their system that will soon be fixed.

 

 

 

 

Amazon began notifying POD publishing companies in February that its online ookstore would only directly sell to consumers POD books that are printed by BookSurge

 

Amazon filed a motion March 19 asking the court to dismiss The public database of federal cases will show that, after both parties briefed Amazon’s Motion to Dismiss, and after a hearing before the Court, Amazon withdrew its Motion to Dismiss, Booklocker.com filed an amended Complaint, and Amazon filed a new Motion to Dismiss. The withdrawal, amendment, and refilling were all done pursuant to suggestions by the Court made at the hearing. Booklocker.com has not yet replied to the renewed Motion to Dismiss. We are therefore still in the earliest stages of this lawsuit with no information to provide at this time.

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