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Two Lawsuits Probe Amazon Pricing Practices

Two Lawsuits Probe Amazon Pricing Practices

Online sellers aren’t the only ones sensitive to Amazon pricing policies and practices, as two lawsuits against the company demonstrate, one by California District Attorneys, the other a class action filed by an Illinois bookseller.

According to the District Attorney in Riverside County, California, it obtained a civil judgment in a consumer protection lawsuit against Amazon, which it says will pay a total of $2 million in penalties, costs, and restitution to the state’s Consumer Protection Trust Fund.

The District Attorneys’ complaint alleged that some Amazon “reference price” advertisements were either misleading or potentially misleading, writing, “Amazon.com commonly uses reference prices – often called “Was” or “List” prices – to advertise savings to consumers.”

The District Attorneys said they determined there were issues with how Amazon determined reference prices, adding that Amazon worked promptly and cooperatively throughout its investigation.

Meanwhile, a bookseller sued Amazon and five major publishers in Federal Court, accusing them of restraining competition in the sale of print trade books (hardbacks, paperbacks, and mass produced).

The lawsuit alleges that Amazon willfully acquired monopoly power in the US online retail trade book market, where it accounts for roughly 90% of all print book sales, by entering into agreements to fix the wholesale price of books and prevent Amazon’s competitors from competing on price or product availability,

“We believe we have uncovered a classic antitrust price-fixing scheme akin to exactly what Amazon and the Big Five book publishers have been accused of in the past,” said Steve Berman, managing partner of Hagens Berman and attorney representing the proposed class of booksellers.

“The Big Five and Amazon have sought to squeeze every penny they can from online and retail booksellers through a complex and restrictive set of agreements, and we intend to put an end to this anticompetitive behavior,” Berman said.

The Seattle Post said Hagens Berman has filed other class-action lawsuits alleging price-fixing, reporting that in 2011, the firm sued Apple over e-book prices and this year sued Amazon over similar allegations about its e-book division.

In a press release, the law firm said the five publishers named in the lawsuit control 80% of the trade book market and said Amazon accounts for about half of all books sold, including 90% of all print books sold online.

The publishers being sued alongside Amazon are Hachette, HarperCollins, Macmillan, Penguin Random House and Simon & Schuster.

Bookends & Beginnings LLC, which operates a bookstore in Illinois and sells books online through its website, filed the lawsuit. It purchases books directly via wholesale from each of the five publishers named in the lawsuit.

Hagens Berman law firm said, “the proposed classes of online and brick-and-mortar retail booksellers seek monetary damages under the Sherman Act, as well as an order from the court that terminates the ongoing monopoly and price-fixing.”

It provided a link to more information on its website.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

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