Judge recommends dismissing lawsuit accusing Amazon and Big Five of US e-book pricing fix

A class action lawsuit accusing Amazon and the Big Five US publishers of conspiring to fix e-book prices should be dismissed, a judge has said.

The lawsuit had been filed by the firm Hagens Berman in district court in the southern district of New York last year claiming Amazon.com and five "co-conspirators" — Hachette, HarperCollins, Macmillan, Penguin Random House and Simon & Schuster — agreed to price restraints that led to consumers overpaying for e-books.

In the lawsuit, the use of various forms of Most Favoured Nation (MFN) clauses, shielding Amazon from competition from other e-book distributors, came under scrutiny for allegedly keeping e-book prices artificially high. 

However, lawyers for the publishing firms and Amazon had branded the allegations “implausible” and pointed to a lack of evidence for any conspiracy.

US magistrate Judge Valerie Figueredo has now recommended a motion to dismiss the case brought by Amazon and the Big Five should be granted, Publishers Weekly reported.

She said: “Each publisher could have rationally concluded that it was in its own self-interest to reach an agency agreement with Amazon, a crucial bookselling partner, to preserve its ability to distribute e-books through the largest retailer in the United States, even if it required acceding to Amazon’s request for an MFN clause.

“And, because the publishers compete in a concentrated market with a single dominant retailer, each publisher could have rationally expected that the other publishers would have reached the same conclusion about the need to secure an agreement with Amazon.”

The recommendation to toss the case will now go to presiding judge Gregory H Woods.