Three indie bookstores file lawsuit against Amazon and Big Six publishers

The stores charge that secret agreements made between the publishers and Amazon give Amazon the advantage in selling e-books, but some industry observers find flaws in their logic.

Three independent bookstores are suing online bookseller behemoth Amazon and the publishers known as the Big Six, claiming that the group has created a monopoly in the sale of e-books.

Fiction Addiction, a store based in Greenville, S.C.; Posman Books, a New York City store which has three locations; and Book House of Stuyvesant Plaza of Albany, N.Y., filed the class action lawsuit.

The suit, which was filed in New York, takes aim at Amazon, Hachette, Penguin, Simon & Schuster, HarperCollins, Random House, and Macmillan.

The stores that filed the suit say that they represent “all independent brick-and-mortar bookstores who sell e-books."

The root of the complaint centers on digital rights management, which makes it difficult for a reader to switch an e-book from one e-reading device to another – for example, to move a book from a Kindle, the Amazon e-reader, to a Kobo, the one sold by indie bookstores.

The indie bookstores are saying that’s hurting their business.

"We are seeking relief for independent brick-and-mortar bookstores so that they would be able to sell open-source and DRM-free books that could be used on the Kindle or other electronic ereaders,” Alyson Decker of Blecher & Collins PC, who is serving as lead counsel for the bookstores, told the Huffington Post.

The suit claims that Amazon entered into confidential agreements with the six publishing houses. E-books sold by all six publishers come with the digital rights management lock that makes it difficult to move them to different devices. 

“Currently, none of the Big Six have entered into any agreements with any independent brick-and-mortar bookstores or independent collectives to sell their e-books,” the plaintiffs write in their suit. “Consequently, the vast majority of readers who wish to read an e-book published by the Big Six will purchase the e-book from Amazon.”

In addition to damages, the three indie bookstores also want an injunction which would “prohibit ... Amazon and the Big Six from publishing and selling e-books with device and app specific DRMs and further require ... the Big Six to allow independent brick-and-mortar bookstores to directly sell open-source DRM e-books.”

Simon & Schuster representative Adam Rothberg told The New York Times, “We believe the case is without merit or any basis in the law and intend to vigorously contest it. Furthermore, we believe the plaintiff retailers will be better served by working with us to grow their business rather than litigating.”

As industry newsletter Shelf Awareness pointed out, the lawsuit is somewhat baffling because the six publishers require digital rights management on e-books no matter who’s selling them – including indie bookstores selling e-books for the Kobo device. In addition, the bookstores state that only e-books sold to users by Amazon will work on Kindle devices, which is not the case – users can read e-books from other sellers on their Kindles. (Transferring books from a Kindle to another device is tricky, though the technically savvy may be working on a solution not sanctioned by the companies.)

Another confusing point, wrote Shelf Awareness, is that while the bookstores charge that "the vast majority" of readers purchase e-books from Amazon, they fail to point out that Kobo, the company that produces the device sold by indie bookstores, also sells e-books obtained from the Big Six publishers.

In addition, Cory Doctorow, a writer for the blog Boing Boing, points out that the bookstores incorrectly used the term “open source” to describe what they want, which is e-books that would work across e-readers. “Open source” is defined as a computer program whose original code is made available to users, allowing them to change the program.

“For some reason, they're using ‘open source’ as a synonym for ‘standardized’ or ‘interoperable,’” Doctorow writes. “Which is to say, these booksellers don't really care if the books are DRM-free, they just want them locked up using a DRM that the booksellers can also use. There is no such thing as ‘open source’ DRM – in the sense of a DRM designed to run on platforms that can be freely modified by their users.... I wish they'd actually bothered to spend 15 minutes trying to understand how DRM works and what it is, and how open source works, and what it is, before they filed their lawsuit.”

The suit from the three independent bookstores follows after the Department of Justice sued several major publishers, stating they had worked with Apple to make e-books more expensive. Hachette, Simon & Schuster, Penguin, Macmillan and HarperCollins all agreed to settle, leaving Apple as ithe only defendant in the suit. The trial is scheduled for June.