June 5 – 12, 2008 Edition

BookLocker Files
Class Action Suit
Against Amazon Bangor,Maine/6/2/2008–, Inc., an independent print-on-demand (POD) publishing company, filed a class action antitrust suit against, Inc. and its printing subsidiary, BookSurge on May 19 in the U.S. District Court of Maine.

Amazon began notifying POD publishing companies in February that its online bookstore would only directly sell to consumers POD books that are printed by BookSurge. BookLocker contends that the practice constitutes “an illegal tying arrangement that has caused, and will continue to cause, damage to the Plaintiff and the Class. BookLocker uses BookSurge’s main competitor, Lightning Source, to print its 1200 currently available titles. Amazon is the world’s largest online retailer. BookLocker charges that Amazon’s practice violates Federal antitrust laws and will have substantial anti-competitive effect upon the market.

BookLocker is bringing the suit in behalf of itself and all POD publishers and publishing companies n 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.

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.

The Class in the law suit is comprised of thousands of publishers across the U.S. who “have been or will be damaged by the same wrongful conduct” of Amazon, and who may not have the finances to bring individual suits. The suit questions whether Amazon’s “tying arrangement” violates the Sherman Act, and whether Amazon’s and BookSurge’s contract unfairly and improperly restricts them.

Lightning Source is BookSurge’s chief competitor, printing more than one million books each month on behalf of 4,300 publishers. Amazon has 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 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.

Attorney for the case is Anthony D. Pellegrini, Esq. RUDMAN & WINCHELL, in Bangor, Maine,

In related news, 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 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.”