Case 1:21-cv-02584 Document 1 Filed 03/25/21 Page 1 of 48
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`Plaintiff,
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`No.
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`CLASS ACTION COMPLAINT
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`DEMAND FOR JURY TRIAL
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`Defendants.
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`BOOKENDS & BEGINNINGS LLC, on behalf
`of itself and all others similarly situated,
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`AMAZON.COM, INC.; HACHETTE BOOK
`GROUP, INC; HARPERCOLLINS
`PUBLISHERS L.L.C.; MACMILLAN
`PUBLISHING GROUP, LLC; PENGUIN
`RANDOM HOUSE LLC; SIMON &
`SCHUSTER, INC.,
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`v.
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`I.
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`II.
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`III.
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`IV.
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`Case 1:21-cv-02584 Document 1 Filed 03/25/21 Page 2 of 48
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`TABLE OF CONTENTS
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`Page
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`INTRODUCTION ................................................................................................................ 3
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`JURISDICTION ................................................................................................................... 6
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`VENUE ............................................................................................................................... 8
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`PARTIES ............................................................................................................................. 8
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`A.
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`B.
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`Plaintiff ................................................................................................................... 8
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`Defendants ............................................................................................................... 8
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`1.
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`2.
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`3.
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`4.
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`5.
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`6.
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`Amazon ....................................................................................................... 8
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`Hachette ...................................................................................................... 9
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`HarperCollins ............................................................................................... 9
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`Macmillan .................................................................................................... 9
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`Penguin ..................................................................................................... 10
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`Simon & Schuster ....................................................................................... 10
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`V.
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`STATEMENT OF FACT .................................................................................................... 11
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`A.
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`B.
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`C.
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`Defendants’ agreements raise wholesale prices and prevent any
`meaningful competition in the sale of trade books. .................................................... 11
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`Courts and enforcement agencies have repeatedly found that Defendants’
`MFNs harm competition. ........................................................................................ 15
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`Defendants’ MFNs harm competition and hurt consumers. ........................................ 19
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`VI.
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`INTERSTATE TRADE AND COMMERCE ....................................................................... 23
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`VII. DEFENDANTS’ MARKET POWER IN THE RELEVANT MARKET ................................. 23
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`A.
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`The online market for print trade books is the relevant product market. ...................... 23
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`1.
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`2.
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`Trade books are not interchangeable with other books. .................................. 23
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`Print books are not reasonably interchangeable with eBooks or
`audio books. ............................................................................................... 24
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`3.
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`The online market for sale of print trade books is a well-defined
`submarket, representing a distinct group of competitors that do
`not overlap significantly with brick-and-mortar booksellers. .......................... 26
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`The United States is the relevant geographic market. ................................................. 33
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`The Big Five dominate the production and sale at wholesale of print
`trade books in the U.S. market. ................................................................................ 34
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`Amazon dominates the retail market for print books. ................................................. 35
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`B.
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`C.
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`D.
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`VIII. CLASS ACTION ALLEGATIONS ..................................................................................... 35
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`IX.
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`X.
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`ANTITRUST INJURY ....................................................................................................... 38
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`CAUSES OF ACTION ....................................................................................................... 39
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`VIOLATION OF THE SHERMAN ACT ......................................................................................... 39
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`FIRST CAUSE OF ACTION VIOLATION OF 15 U.S.C. § 1 ............................................... 39
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`SECOND CAUSE OF ACTION VIOLATION OF THE SHERMAN ACT –
`MONOPOLIZATION (15 U.S.C. § 2) ..................................................................... 43
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`THIRD CAUSE OF ACTION VIOLATION OF THE SHERMAN ACT –
`CONSPIRACY TO MONOPOLIZE (15 U.S.C. § 2) ............................................... 44
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`JURY TRIAL DEMANDED ........................................................................................................... 45
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`PRAYER FOR RELIEF .................................................................................................................. 45
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`Case 1:21-cv-02584 Document 1 Filed 03/25/21 Page 4 of 48
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`Plaintiff alleges the following upon personal knowledge as to itself and its own acts, and
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`as to all other matters upon information and belief, based upon the investigation made by and
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`through its attorneys.
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`I.
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`INTRODUCTION
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`1.
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`Plaintiff is a bookseller that operates online and as a physical store. Plaintiff
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`directly purchases print books1 published and sold at wholesale by the five largest publishers in
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`the United States: Defendant Hachette Book Group, Inc. (“Hachette”); Defendant HarperCollins
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`Publishers L.L.C. (“HarperCollins”); Defendant Macmillan Publishing Group, LLC
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`(“Macmillan”); Defendant Penguin Random House LLC (“Penguin”); and Defendant Simon &
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`Schuster, Inc. (“Simon & Schuster”), otherwise known collectively as the “Big Five.” The Big
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`Five publish and sell “trade books,” a term of art referring to “general interest fiction and non-
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`fiction books,” as “distinguished from ‘non-trade’ books such as academic textbooks, reference
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`materials, and other texts.”2 Collectively, the Big Five account for about 80% of the trade books
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`sold in the United States.3
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`2.
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`Plaintiff also competes with Defendant Amazon.com, Inc. (“Amazon”), the
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`largest retail bookseller in the United States. Amazon sells over half of all books purchased at
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`1 This lawsuit concerns the sale of print books (hardbacks, paperbacks, and mass produced).
`Defendants’ conduct with respect to the sale of electronic books is the subject of a separate
`lawsuit. In Re Amazon.com, Inc. eBook Antitrust Litigation. Case Number: 1:21-cv-351-GHW-
`DCF (S.D.N.Y.).
`2 United States v. Apple Inc., 952 F. Supp. 2d 638, 648 n.4 (S.D.N.Y. 2013).
`3 Constance Grady, Milo Yiannopoulos’s book deal with Simon & Schuster, explained, Vox
`(Jan. 3, 2017), https://www.vox.com/culture/2017/1/3/14119080/milo-yiannopoulos-book-deal-
`simon-schuster-dangerous-boycott; Thad McIlroy, What the Big 5's Financial Reports Reveal
`About the State of Traditional Book Publishing, Book Business (Aug. 5, 2016),
`https://www.bookbusinessmag.com/post/big-5-financial-reports-reveal-state-traditional-book-
`publishing/.
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`retail in the United States,4 including about 90% of all print books sold online.5 Plaintiff alleges
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`that Amazon and the Big Five restrain competition in the sale of print trade books through highly
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`restrictive most favored nation clauses (MFNs) in their distribution agreements. These
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`anticompetitive provisions ensure that no rival bookseller can differentiate itself from, or
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`otherwise compete with, Amazon on price or product availability in the sale of print trade books.
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`3.
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`In general, MFNs entitle the buyer to the lowest price or best terms that the
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`supplier offers to any other buyer,6 but combined with Amazon’s market dominance, they serve
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`an anticompetitive purpose that controls the wholesale price of print trade books, destroys
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`Amazon’s retail competition, reduces consumer choices, and creates a disincentive among
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`booksellers to compete on price or non-price promotions in the sale of print trade books.
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`4.
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`It would increase the Big Five’s book distribution and therefore be in their
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`economic self-interest to let Amazon’s rival booksellers gain market share by offering them
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`lower wholesale prices or exclusive early releases. But Amazon’s contracts with publishers cover
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`practically all the potential avenues a competing bookseller may attempt to use in order to
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`differentiate itself against Amazon.7 To control wholesale prices, the Big Five agree to
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`4 House Judiciary Committee, Investigation of Competition in Digital Markets, Oct. 5, 2020
`at 295,
`https://judiciary.house.gov/uploadedfiles/investigation_of_competition_in_digital_markets_majo
`rity_staff_report_and_recommendations.pdf (“House Report”).
`5 Id. at 255 n.1562.
`6 See Apple, 952 F. Supp. 2d at 662.
`7 European Commission’s Directorate General for Competition, Case AT.40153 EBook
`MFNs and related matters (Amazon),
`https://ec.europa.eu/competition/antitrust/cases/dec_docs/40153/40153_4392_3.pdf (“5.4.2017
`DG Comp. Decision”) at 38.
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`Case 1:21-cv-02584 Document 1 Filed 03/25/21 Page 6 of 48
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`anticompetitive restraints that prevent Plaintiff and other booksellers from competing with
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`Amazon.
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`5.
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`Despite multiple investigations and censure for the use of anticompetitive MFNs,
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`Amazon and the Big Five have employed and continue to employ this device to fix wholesale
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`prices, create a barrier to market entry for new competitors, and hinder the expansion of existing
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`competitors in the retail market for the sale of print trade books. The harm caused by
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`Defendants’ supracompetitive wholesale prices and attendant injuries to the retail sale of print
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`trade books persists and will not abate unless Amazon and the Big Five are stopped. Plaintiff
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`seeks a nation-wide injunction under Section 16 of the Clayton Act to enjoin Defendants
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`Amazon and the Big Five from enforcing this restraint.
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`6.
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`By entering into agreements that fix the wholesale price of books and prevent
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`Amazon’s competitors from competing on price or product availability, Defendant Amazon has
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`willfully acquired its monopoly power in the U.S. online retail trade book market, where it
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`accounts for roughly 90% of all print book sales. Such conduct is an abuse of monopoly power in
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`violation of Section 2 of the Sherman Act.
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`7.
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`Plaintiff and members of the proposed Bookseller and Online Bookseller Classes
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`(defined below) seek monetary recovery, including treble damages, for all overcharges incurred
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`by the Classes as defined herein. Plaintiff and the proposed Classes have standing to recover
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`damages under Section 4 of the Clayton Act because Defendants’ anticompetitive use of MFNs
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`and similar provisions materially and proximately cause injury to and have caused Plaintiff and
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`Class members to pay supracompetitive wholesale prices for books.
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`8.
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`Further, Plaintiff and the proposed Classes seek injunctive relief that terminates
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`the ongoing violations alleged in this Complaint. They have standing under Section 16 of the
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`Clayton Act because they are threatened with impending future harm in the form of additional
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`overcharges.
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`II.
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`JURISDICTION
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`9.
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`This Court has federal question jurisdiction pursuant to the federal antitrust laws
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`invoked herein, including the Sherman Act and Clayton Antitrust Act, e.g., 28 U.S.C. § 1331, 28
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`U.S.C. § 1337(a), and 15 U.S.C. § 15(a).
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`10.
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`This Court also has subject matter jurisdiction pursuant to the Class Action
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`Fairness Act of 2005, 28 U.S.C. § 1332(d), because at least one Class member is of diverse
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`citizenship from Defendants, there are more than 100 Class members nationwide, and the
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`aggregate amount in controversy exceeds $5,000,000.
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`11.
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`Plaintiff Bookends & Beginnings LLC operates a bookstore in Evanston, Illinois.
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`Plaintiff purchases books at wholesale prices directly from the Big Five and directly competes
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`with Amazon in the U.S. market for the retail sale of print trade books and in the submarket for
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`online sales of print trade books. Plaintiff was harmed and injured financially because of
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`Defendants’ conduct, as described further herein.
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`12.
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`This Court has personal jurisdiction over Defendants under Section 12 of the
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`Clayton Act, because Defendants reside in this District or may be found or transact business in
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`this District. Each of the Big Five Defendants have headquarters and operate their businesses in
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`this District. Amazon likewise may be found or transacts business in this District. Amazon has
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`over 8,000 employees in its New York City work force, including many who work at its
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`Manhattan office space.8 It has five warehouses in New York, including two in Manhattan.9 It
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`also owns and operates four Amazon Books stores and eight cashier-free Go-stores in locations
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`throughout Manhattan.10 Amazon has eight office properties in Manhattan, most of which are
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`clustered in Midtown, including the iconic Lord & Taylor building on Fifth Avenue.11 Amazon
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`has engaged in an illegal, anticompetitive scheme to monopolize the eBooks market that was
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`directed at, and had a direct, substantial, reasonably foreseeable and intended effect of causing
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`injury to the business or property of persons and entities residing in, located in, or doing business
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`in this District.
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`13.
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`Exercising personal jurisdiction over Amazon is also appropriate under Section
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`302(a) of New York’s long-arm statute because Amazon transacts business in the State of New
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`York, directly or through agents, such that it has sufficient minimum contacts with New York.
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`Plaintiff further avers on information and belief that Amazon’s online sales to its customers in
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`New York State represent at least 5% of Amazon’s U.S. sales and therefore rise to the level of
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`8 Ed Shanahan, Amazon Grows in New York, Reviving Debate Over Abandoned Queens
`Project, NYT (Dec. 9, 2019), https://ww, w.nytimes.com/2019/12/06/nyregion/amazon-hudson-
`yards.html.
`9 https://en.wikipedia.org/wiki/List_of_Amazon_locations#United_States ; Ben Fox Rubin,
`Why Amazon built a warehouse inside a Midtown Manhattan office tower, CNET (Dec. 21,
`2015), https://www.cnet.com/news/why-amazon-built-a-warehouse-inside-a-midtown-
`manhattan-office-tower/.
`10 Where are Amazon Go stores located in New York?, Bing,
`https://www.bing.com/maps?q=where+are+amazon+go+stores+in+new+york&qs=NW&pq=wh
`ere+are+amazon+go+stores+in+new+&sc=5-
`34&cvid=29EA099E9F8E4797A844A8DCA5842069&FORM=QBLH&sp=1&ghc=1; Where
`are Amazon Books stores located in New York?, Bing,
`https://www.bing.com/maps?q=where+are+amazon+books+stores+located+in+new+york%3F&
`cvid=1f533e8508ec4a378125b0ed5e3fc0cb&FORM=ANAB01&PC=U531.
`11 Matthew Haag, Manhattan Emptied Out During the Pandemic. But Big Tech Is Moving In.
`NYT (Nov. 9, 2020), https://www.nytimes.com/2020/10/13/nyregion/big-tech-nyc-office-
`space.html.
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`substantial solicitation necessary to satisfy the minimum contacts required to support this Court’s
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`exercise of personal jurisdiction over Amazon.
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`III. VENUE
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`14.
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`Venue is proper under 28 U.S.C. § 1391(b)(1) and (2) because Defendants reside
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`in this judicial district and a substantial part of the events or omissions giving rise to the claims
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`occurred in this judicial district.
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`A.
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`Plaintiff
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`IV.
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`PARTIES
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`15.
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`Bookends & Beginnings LLC is an Illinois limited liability company that operates
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`a bookstore in Evanston, Illinois selling physical books in its store and online through its
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`website: www.bookendsandbeginnings.com. Bookends & Beginnings purchases books directly
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`from each of the Big Five Publishers.
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`B.
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`Defendants
`1.
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`Amazon
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`16.
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`Amazon is an online retailer giant with its principal headquarters in Seattle,
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`Washington and with facilities and employees scattered throughout the United States, including
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`in this District. Amazon is vertically integrated and is active upstream as a publisher, with its
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`own imprints (i.e., publishing labels), and downstream as an eBook retailer. Amazon sells
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`eBooks and offers eBook reading subscription services to its retail customers in New York and
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`throughout the United States from the Amazon.com platform. Amazon also operates Amazon
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`Publishing, a division of Amazon that publishes books and competes with the Big Five
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`Defendants.
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`2.
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`17.
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`Hachette
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`Defendant Hachette is a leading U.S. trade publisher, having its principal place of
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`business in New York City, and is qualified to do business and is doing business in the State of
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`New York and in this District. Hachette has been publishing books since 1837, and its publishing
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`brands currently include Little, Brown and Company; Little, Brown Books for Young Readers;
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`Grand Central Publishing; Basic Books; Public Affairs; Orbit; FaithWords; and Center Street.
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`Hachette’s books and authors have garnered major awards including Pulitzer Prizes, National
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`Book Awards, Newbery Medals, Caldecott Medals, and Nobel Prizes. Hachette’s bestselling
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`authors have been published all over the world and include David Baldacci, Michael Connelly,
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`Malcolm Gladwell, Elin Hilderbrand, N. K. Jemisin, Stephenie Meyer, James Patterson, J.K.
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`Rowling, Nicholas Sparks, Rick Steves, Donna Tartt, and Malala Yousafzai.
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`3.
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`18.
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`HarperCollins
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`Defendant HarperCollins is a leading U.S. trade publisher, having its principal
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`place of business in New York City, and is qualified to do business and is doing business in the
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`State of New York and in this District. With over two hundred years of history and more than
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`120 branded imprints around the world, HarperCollins publishes approximately 10,000 new
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`books every year in 16 languages, and has a print and digital catalog of more than 200,000 titles.
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`Writing across dozens of genres, HarperCollins’ authors are winners of the Nobel Prize, the
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`Pulitzer Prize, the National Book Award, the Newbery and Caldecott Medals, and the Man
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`Booker Prize.
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`4.
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`19.
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`Macmillan
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`Defendant Macmillan is a leading U.S. trade publisher, having its principal place
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`of business in New York City, and is qualified to do business and is doing business in the State
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`of New York and in this District. Macmillan is part of a global trade-publishing group operating
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`worldwide, with trade publishing companies in the United States, Germany, the United
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`Kingdom, Australia, South Africa, and India. Macmillan operates eight divisions in the US:
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`Celadon Books; Farrar, Straus and Giroux; Flatiron Books; Henry Holt and Company;
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`Macmillan Audio; Macmillan Children’s Publishing Group; St. Martin’s Press and Tor/Forge. Its
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`writers, including, among others, Jeff VanderMeer, Senator Elizabeth Warren, James Comey,
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`Orson Scott Card, and Paul Beatty, come from a vast array of literary backgrounds and have won
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`awards including the Caldecott Medal, the Nobel Prize, the Man Booker Prize, the Pulitzer Prize,
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`the National Book Award, and the Printz Award.
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`5.
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`20.
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`Penguin
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`Defendant Penguin is a leading U.S. trade publisher, organized under the laws of
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`Delaware, having its principal place of business in New York City, and is qualified to do
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`business and is doing business in the State of New York and in this District. With a rich history
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`dating back to the 1800s, Penguin’s expansive publishing portfolio includes nearly 275
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`independent publishing imprints and brands on five continents and contains books and products
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`for readers of all ages at every stage of life. Penguin publishes 15,000 new titles annually and
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`sells close to 800 million print, audio, and eBooks annually. Penguin’s many authors include
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`more than 80 Nobel Laureates and hundreds of the world’s most widely read authors.
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`6.
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`21.
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`Simon & Schuster
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`Defendant Simon & Schuster is a leading U.S. trade publisher, organized under
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`the laws of New York, having its principal place of business in New York City, and is qualified
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`to do business and is doing business in the State of New York and in this District. It publishes
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`2000 titles annually in numerous well-known imprints and divisions such as Simon & Schuster,
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`Scribner, Atria Books, Gallery Books, Pocket Books, Adams Media, Simon & Schuster
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`Children’s Publishing and Simon & Schuster Audio and international companies in Australia,
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`Canada, India and the United Kingdom. Simon & Schuster proudly brings the works of its
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`authors, which include, among others, Dale Carnegie, Sharon Draper, Jennifer Egan, Joseph
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`Heller, Ernest Hemingway and Stephen King, to more than 200 countries and territories. Its
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`books and authors have been winners of the Pulitzer Prize, National Book Award, National Book
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`Critics Circle Award, Newbery Medal, and Caldecott Medal. On November 25, 2020, Penguin
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`announced plans to acquire Simon & Schuster; the proposed merger would create a single
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`publishing house with approximately 50% of all trade books published.12
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`V.
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`STATEMENT OF FACT
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`A.
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`Defendants’ agreements raise wholesale prices and prevent any meaningful
`competition in the sale of trade books.
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`22.
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`Defendants employ a comprehensive set of unreasonably restrictive MFNs that
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`cover virtually all aspects of competition between booksellers to ensure that no rival bookseller
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`can differentiate itself from, or otherwise compete with, Amazon in the sale of trade print books
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`at retail. These provisions include price and product availability. They have the intent and effect
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`of controlling wholesale prices of print trade books and preventing competition with Amazon in
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`the retail sale of print trade books.
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`23. Wholesale price parity: Publishers typically rely on a wholesale model to sell
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`trade print books to booksellers, who then sell to the public at retail.13 Defendants control
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`12 John Maher, PRH Purchase of S&S Draws Objections, Publishers Weekly (Nov. 30,
`2020), https://www.publishersweekly.com/pw/by-topic/industry-news/publisher-
`news/article/85005-first-reactions-to-s-s-sale.html.
`13 Constance Grady, The 2010s were supposed to bring the ebook revolution, Vox (Dec. 23,
`2019), https://www.vox.com/culture/2019/12/23/20991659/ebook-amazon-kindle-ereader-
`department-of-justice-publishing-lawsuit-apple-ipad.
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`wholesale prices by eliminating the factors that would lead to competitive wholesale pricing.
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`Amazon’s MFN ensures that the publisher cannot offer Amazon the same title on the same date
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`for a higher wholesale price than it offers to any other bookseller.14 This agreement hinders
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`competing retailers from offering their consumers lower book prices than Amazon.15 Publishers
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`have an incentive to diversify the distribution of their books and prevent any one bookseller from
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`having a stranglehold over the distribution of their books. In a competitive market to encourage
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`diversification, competing booksellers may be able to obtain lower wholesale prices from
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`publishers than Amazon, which would enable them to gain market share by offering lower prices
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`to consumers. Because publishers cannot offer lower wholesale prices to competing booksellers,
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`this reduces the booksellers’ incentives to undercut Amazon’s prices at retail to improve their
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`market position, reduces consumer choices, and leads to higher consumer prices.16 And it ensures
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`that Amazon obtains access to books at the best wholesale terms in scenarios where publisher
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`otherwise would have a preference not to offer a given book to Amazon.17
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`24.
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`Selection parity: Because of Amazon’s market dominance, its retail competitors
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`need to provide additional value to consumers, for example in the form of differentiated content
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`or early releases because even temporarily offering content that is unavailable on Amazon would
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`increase competition in the retail distribution of books.18 In a competitive market, publishers
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`would have a financial incentive to incur the added investment cost of developing innovative
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`products for exclusive release by Amazon’s retail competitors or to offer them exclusive early
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`14 5.4.2017 DG Comp. Decision at 30 n.48.
`15 Id. at 37.
`16 Id.
`17 Id. at 38.
`18 Id. at 30.
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`releases, so that Amazon’s competitors would gain market share and weaken Amazon’s
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`bargaining power over the publishers.19 But Amazon’s MFN requires publisher to provide their
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`books for sale on Amazon.com at the earliest date available to other booksellers and include all
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`the same features as the books available through Amazon’s retail competitors.20 Amazon’s
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`selection parity clause harms the retail competition because it forecloses a significant avenue for
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`retailers to compete with Amazon by differentiating the product or making it available earlier.21
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`25.
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`Promotion Parity Clause: This clause forecloses even temporary competition, by
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`requiring publishers to offer Amazon any promotional wholesale price, or promotional content
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`that they offer to any other bookseller.22 This prohibition on price and non-price promotions is
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`anticompetitive because it undermines competing booksellers’ incentives to invest in price and
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`non-price related promotional activities.23 Booksellers lose incentive because they anticipate that
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`some additional sales triggered by their price and non-price related promotional activities would
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`also be made by Amazon, leaving less additional sales for them and, hence, reducing their
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`incentives to engage in promotional activities in the first place.24
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`26.
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`Amazon benefits from this agreement because regardless of the wholesale prices,
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`it faces no meaningful competition from any rival bookseller. The Big Five Defendants benefit
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`from this agreement because they have no incentive to lower wholesale prices and therefore can
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`maintain them as supracompetitive levels.
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`19 Id. at 29-30.
`20 Id. at 10, 27.
`21 Id. at 31.
`22 Id. at 10 and 32 n.49.
`23 Id. at 31.
`24 Id. at 30.
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`Case 1:21-cv-02584 Document 1 Filed 03/25/21 Page 15 of 48
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`27.
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`Acting individually, none of the Big Five Defendants would have an incentive to
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`enter into restrictive agreements that consolidate power in Amazon and cede substantial control
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`over the distribution of their books, unless the agreements granted them the power to control
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`wholesale prices of print trade books. For example, Macmillan’s CEO John Sargent warned that
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`Amazon’s large market share is “one of the big problems in the digital marketplace” and as
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`“publishers, authors, illustrators, and agents, we need broader channels to reach our readers.”25
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`And recent statement from the Association of American Publishers, to which all of the Big Five
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`belong,26 called “for government officials to step in quickly and decisively to exercise
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`corrective measures” to address Amazon’s “dominant position in the publishing industry.”27
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`28.
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`But the Big Five did not act in isolation. During the Apple conspiracy, they were
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`in constant communication regarding their negotiations with both Apple and Amazon.28 And in
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`their negotiations at the conclusion of the terms of the consent decrees imposed by the Apple
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`court, Defendants publicly signaled that Amazon was offering the same basic terms in their book
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`distribution agreements and that each of the Big Five was accepting those terms.29
`
`
`25 Brian Stelter, Amazon, HarperCollins avert public Fight, CNN (Apr. 14, 2015),
`https://money.cnn.com/2015/04/14/media/amazon-harpercollins-deal/index.html.
`26 Our Members - AAP, https://publishers.org/who-we-are/our-members/
`27 Statement from Maria A. Pallante, President and CEO, Association of American
`Publishers, https://publishers.org/news/association-of-american-publishers-comments-on-
`american-booksellers-association-whitepaper-american-monopoly-amazons-anti-competitive-
`behavior-is-in-violation-of-antitrust-laws/.
`28 United States v. Apple, Inc., 791 F.3d 290, 318 (2d Cir. 2015).
`29 S&S, Amazon Agree on ‘Version’ of Agency Pricing, Publishers Weekly (Oct. 21, 2014),
`https://www.publishersweekly.com/pw/by-topic/industry-news/industry-deals/article/64461-s-s-
`amazon-agree-on-version-of-agency-pricing.html.; Megan Guess, Amazon and Hachette resolve
`dispute with multi-year agreement, Ars Technica (Nov. 13, 2014),
`https://arstechnica.com/information-technology/2014/11/amazon-and-hachette-resolve-dispute-
`with-multi-year-agreement/; Macmillan Strikes Deal with Amazon, but “Irony Prospers in the
`Digital Age” - The Authors Guild (Dec. 19, 2014), https://www.authorsguild.org/industry-
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`29.
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`Knowing that each of the Big Five agreed to the same restrictions, gave the
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`individual Big Five Defendants the necessary assurance that their principal publishing rivals
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`would not gain a special advantage in a niche market or generate price wars at the wholesale
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`level by offering better terms to Amazon’s rivals.
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`30.
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`Defendants’ anticompetitive conduct has caused and continues to cause Plaintiff
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`and the proposed Classes to overpay for books purchased from the Big Five at wholesale without
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`any offsetting competitive benefit for the high price, e.g., exclusive sales, special editions, or
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`early releases.
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`B.
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`Courts and enforcement agencies have repeatedly found that Defendants’ MFNs
`harm competition.
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`31.
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`Amazon’s and the Big Five’s continued anticompetitive use of MFNs to restrain
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`competition for trade books prices is astonishingly brazen in light of repeated investigations into
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`Defendants’ practices. A decade ago, the Big Five conspired with Apple to raise trade eBook
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`prices via MFNs.30 This conduct led to concurrent investigations by federal and state prosecutors
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`in the United States and by the European Commission’s Directorate General for Competition
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`(the “DG Comp”), which resulted in orders prohibiting the publishers from entering into MFNs
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`advocacy/macmillan-strikes-deal-with-amazon-but-irony-prospers-in-the-digital-age/; No
`Authors Held Hostage as HarperCollins and Amazon Come to Terms, The Authors Guild (Apr.
`16, 2015), https://www.authorsguild.org/industry-advocacy/no-authors-held-hostage-as-
`harpercollins-and-amazon-come-to-terms/; Jillian D’Onfro, Another major publisher is going to
`war with Amazon, Business Insider (Mar. 31, 2015),
`https://www.businessinsider.com/harpercollins-amazon-contract-expiring-2015-3; For the Big
`Five, Agency Now Holds Sway Across the Board, The Authors Guild (Sep. 9, 2015),
`https://www.authorsguild.org/industry-advocacy/for-the-big-five-agency-now-holds-sway-
`across-the-board/.
`30 Id.
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`in connection with the sale of eBooks on either continent for a period of five years.31