DRM Lawsuit Filed By Independent Bookstores Against Amazon, 'Big Six' Publishers

TO GO WITH AFP STORY BY ANDREA GRAELLS  A person uses, on October 5, 2011 at Amazon France headquarters in Paris, the US onli
TO GO WITH AFP STORY BY ANDREA GRAELLS A person uses, on October 5, 2011 at Amazon France headquarters in Paris, the US online retail giant Amazon's Kindle electronic reader released in France on October 7, 2011. AFP PHOTO ERIC PIERMONT (Photo credit should read ERIC PIERMONT/AFP/Getty Images)

Three independent bookstores are taking Amazon and the so-called Big Six publishers (Random House, Penguin, Hachette, HarperCollins, Simon & Schuster and Macmillan) to court in an attempt to level the playing field for book retailers. If successful, the lawsuit could completely change how ebooks are sold.

The class-action complaint, filed in New York on Feb 15., claims that by entering into confidential agreements with the Big Six publishers, who control approximately 60 percent of print book revenue in the U.S., Amazon has created a monopoly in the marketplace that is designed to control prices and destroy independent booksellers.

The complaint centers on digital rights management, or DRM, the technological lock that prevents consumers from transferring any ebook they buy on an Amazon Kindle onto, say, a Nook or Kobo ereader.

DRM comes with all ebooks sold by the major publishers, with the exception of Macmillian's Tor and Forge imprints, and it means that if a consumer decides to switch to another company's ereading device, he or she would lose access to any already purchased ebooks. DRM used to be a feature of digital music sold on iTunes, until Apple abandoned the practice in 2009.

The bookstores making the complaint are the Book House of Stuyvesant Plaza, based in Albany, N.Y., Fiction Addiction in Greenville, S.C., and Posman Books of New York City, though the suit states that these stores are suing on behalf of "all independent brick-and-mortar bookstores who sell e-books."

Alyson Decker of Blecher & Collins PC, lead counsel acting for the bookstores, described DRM as "a problem that affects many independent bookstores." She said the complaint is still in the process of being served to Amazon and the publishers and declined to state how it came about or whether other bookstores had been approached to be party to the suit.

"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," Decker explained to The Huffington Post by telephone.

Such a move would lead to a reduction in Amazon's dominant market position, and completely reshape the ebook marketplace.

A spokesman for Fiction Addiction declined to comment as legal proceedings are ongoing. The other plaintiffs and Amazon did not respond to a request for comment. Update: A spokesman for Amazon said that they do not comment on active litigation.

The case comes against a backdrop of a Department of Justice lawsuit against Apple and five of the Big Six publishers over ebook price-fixing, a move that was widely seen as benefiting Amazon's dominant position among ebook retailers. Four of the publishers in that case have since settled with the Justice Department.

Though the independent booksellers' complaint is likely to be popular among many who follow the book industry, the three plaintiffs face a huge battle against such major players. Still, Decker said, "We wouldn't have filed it if we weren't hopeful [of winning]."

UPDATE: Cory Doctorow points out that the complainants' use of DRM terms is somewhat confused.

A copy of the class-action complaint is embedded below:



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