February 21, 2013

Indie booksellers sue Amazon and the Big Six over DRM


Amazon: your one-stop shop for things that maintain the hegemony of Amazon

Three independent booksellers are looking to change the lines of engagement over e-books and DRM this week with a new lawsuit against Amazon and the Big Six publishers both.

Booksellers Fiction Addiction of Greenville, S.C., Book House of Stuyvesant Plaza in Albany, and New York City’s own Posman Books filed the class action lawsuit on February 15th. In the suit, which is posted in its entirety (DRM free, of course) on the Huffington Post, the stores claim they are filing the complaint “on behalf of themselves and all other similarly situated brick and mortar bookstores.” Why these three stores in particular are filing the suit together is as yet unclear, though the fact that they are doing so outside the umbrella of the American Booksellers Association is notable.

In the suit the stores make the case that Amazon holds a monopoly on e-book sales in this country, maintained in part by their use of a proprietary DRM format, and that the Big Six publishers are complicit with Amazon in establishing contractual terms by which those DRM-wrapped e-books are sold exclusively through Amazon.

What they’re seeking is “relief,” including an injunction against Amazon and the Big Six from selling e-books with device-specific DRM and an injunction against the sale of such locked-down devices — namely, the Kindle.

As Alyson Decker, a lawyer for the booksellers, said to the Huffington Post,

“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.”

There are more than a few points of interest here. First, though the Department of Justice has turned an indifferent (or complicit) eye to the fact, Amazon surely does have a monopoly on e-book sales in this country — controlling about 90 percent of the market, by most accounts. Indeed, the Amazon e-book monopoly and their proprietary format are a sort of reinforcing feedback loop, like Jeff Bezos astride an amplifier, crowing into a microphone, his fuzzed out laughs growing ever louder and more shrill until you can make out nothing but wail and pain.

This suit’s most important aim might be simple, legal recognition of that fact. But when it comes to questions of DRM and e-book sales, things get a bit strange. As Cory Doctorow points out over on Boing Boing, while the suit’s claim that DRM hinders bookstore e-book sales might be true, and their proposed solution — the abolishment of proprietary DRM formats — a laudable one, it is not synonymous with a move toward abolishment of DRM entirely, and their use of the phrase “open source” is misplaced.

In addition, as ABA member stores, all three of the plaintiffs currently sell e-books in epub formats — with or without accompanying DRM — through an agreement with Kobo. They of course cannot sell books in the Amazon proprietary mobi format, even if they perversely wished to. Selling readers a book that can only be read on a device tied so closely with a company hellbent on choking out all remaining bookstores would be the pinnacle of idiocy. Amazon’s maintenance of such an exclusive environment and device is anti-competitive in the extreme. And the Big Six, as in all monopoly environments, have been forced to go along with it. They could hardly have done otherwise. But, as part of the suit claims:

“Currently none of the BIG SIX have entered into any agreements with any brick-and-mortar bookstores or independent collectives to sell their e-books. 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.”

This is true. The Big Six have contracts with Amazon (dictated at the whim of Amazon since the settlement of the DoJ suit against publishers) and with Kobo, but not with the stores themselves, and Amazon most decidedly buys e-books published by the Big Six at a different rate than stores. The Big Six have individual contracts with booksellers to sell their paper books. Why isn’t the same true of their e-books?

(I should note that Melville House books are distributed by Random House, and so the method by which many of our own e-books are sold and read would be decided in this suit. But it should also be noted that it’s the accounts Random House sells our books to — Amazon, Barnes & Noble, Kobo or whomever, that add their brand of DRM. They do not come from the publisher with DRM “protection.” And those accounts do this for all the ebooks they sell, not just the ones from the Big Six. So the case has wide-ranging implications for all publishers selling ebooks in the mainstream marketplace.)

I was a bookseller when some of the Big Six unrolled their agency model, and I cheered at the announcement. It infringed on our rights as retailers to set our own prices, but then we were hardly setting out to lose money on e-books and recoup it on refrigerators and weed whackers. If it meant that publishers were taking back some, well, some agency from Amazon I was all for it. (And what I didn’t know at the time was that publishers actually made less money on agency pricing; they were willing to take the loss to prevent the complete devaluation that was the result of Amazon’s under-pricing.)

Well the agency model is dead for now, and if, as the Department of Justice and courts have perversely decided, it is not within the publishers’ rights to set even basic terms, then it falls to a few brave booksellers to take a different tack. Leaving aside questions of the ineffectiveness of DRM and its hindrance to culture, the use of Amazon’s DRM to further a monopoly is clearly counter to the law. It’s too early to say what success the suit will have, but we’ll be watching eagerly.



Dustin Kurtz is former marketing manager of Melville House.