December 17, 2013

Anti-corporate judge dismisses indie bookseller suit against Amazon


It's not a monopoly if you squint real hard!

It’s not a monopoly if you squint real hard!

Three indie bookstores had their lawsuit against Amazon and the Big Five dismissed, in every sense of the word, last week.

As we’ve discussed twice previously this suit, filed last February, has been subject to criticism from the start. The three booksellers—Book House of Stuyvesant Plaza in Albany, Fiction Addiction in Greenville, SC and New York City’s Posman Books—are claiming damages to themselves and to the market generally because of Amazon’s closed ecosystem ebook format, and because of publisher insistence that ebooks be wrapped in DRM, thus excluding smaller vendors from selling them at all, let alone at the terms offered to Amazon. (Those terms, of course, have been forcibly changed by the now-decided DOJ suit against Apple and the major publishers, meaning that Amazon is free to choose how much they feel like paying for anything at this point.) Indie bookstores are barred from selling the .mobi format or from selling most ebooks themselves at all without going through an intermediary—Kobo, by agreement with the ABA. At the heart of the suit’s argument was that these practices are non-competitive, and help to maintain a monopoly on ebooks for Amazon.

Soon after the suit’s filing, the publishers and Amazon both filed for dismissal. The Big Five claimed that Amazon was the real target of the suit, and Amazon claimed that, “Hey buy a Kindle, they’re real swell. U.S. District Court Judge Jed Rakoff granted that dismissal. In a nineteen page decision he called the suit as a whole “threadbare” and its claims “inadequate.”

But in a strange joke by the gods of publication schedule, the same Judge Rakoff has also just published a truly interesting and perhaps even rousing essay in the New York Review of Books examining why none of the principals involved with the Great Recession of the past years have been prosecuted.

In that piece, Rakoff essentially lays out how a successful case against these high-level bankers might be argued, essentially gassing up the car for the DOJ, tossing them the keys, and making chicken noises at them like something out of Teen Wolf, probably (it’s been a while since I’ve seen that one.) Judge Rakoff is careful to mention at the opening of his essay that “Every case is different, and I, for one, have no opinion about whether criminal fraud was committed in any given instance” followed immediately by a list organizations that can and have called the crisis a result of fraud.

Perhaps that essay casts his decision in the dismissal of the bookseller suit in a different light. Throughout the written decision Judge Rakoff points out what evidence he might have required for the suit to even continue, let alone succeed. Perhaps, instead of simply dismissing this case in a curt fashion, Rakoff is merely disappointed that this suit was not the one he might like to see.

Then again, he could, like so many others, be entirely willing to cast recriminations on banks, but have a blind spot for the monopolistic practices of Amazon.

Another strange note: while pointedly Amazon-friendly blogs like GigaOm were predictably incredulous about the suit, even Shelf Awareness inserted an uncharacteristic bit of pat editorializing, calling the suit “not well thought out.”

When asked about how the stores might proceed, Susan Novotny of Book House wrote, simply, “We are studying the opinion and applicable 2nd Circuit precedents to determine the merits of an appeal.”



Dustin Kurtz is the marketing manager of Melville House, and a former bookseller.