Indie Bookstores Sue Amazon, Big Publishers Over DRM

A class-action lawsuit was filed by three independent bookstores in New York late last week alleging that confidential agreements between Amazon and the six largest U.S. publishers will destroy independent booksellers, according to a report in the Huffington Post.

The contracts, say the Book House of Stuyvesant Plaza in Albany, N.Y., Fiction Addiction in Greenville, S.C., and Posman Books in New York City, “restrain the trade and commerce in the market for e-books sold within the United States” by applying digital rights management software (DRM) to limit the use of the digital content to Amazon devices and apps.

The argument is essentially that because many ebooks are only available through Amazon and because Amazon controls such a high percentage of the U.S. ebook market and because Amazon DRM limits the the flow of digital content into and out of the Kindle ecosystem, independent bookstores have been unable to enter into the ebook market. The suit seeks to make it so that open-source and DRM-free ebooks can be read on the Kindle and other e-reading devices, a lawyer for the plaintiff told the Huffington Post.

If the bookstores manage to win the lawsuit, it would “completely reshape the ebook marketplace,” according to the Huffington Post.

In April of 2012, The six largest U.S. publishers, aside from Random House, were recently sued by the U.S. Department of Justice, which alleged that they colluded along with Apple to fix the prices of ebooks. Hachette, HarperCollins and Simon & Schuster settled with the government immediately, resolving the lawsuit. Penguin, in advance of its merger with Random House, settled in Dec. Macmillan, the last holdout among the publishers, settled in Feb. 2013, citing the high financial risk associated with potentially losing in court.

Learn more about DRM:

What Do Authors Think of DRM? 

DRM, Will More Publishers Drop It?

— Amazon Inspires Wave of Anti-DRM Sentiment Following Customer Kindle Shutdown




6 thoughts on “Indie Bookstores Sue Amazon, Big Publishers Over DRM

  1. Michael Covington

    Interesting tactic, although they should think through the further ramifications of a DRM-less marketplace without clear legislation relating to digital content and the first sale doctrine. If they could/should win this case (which I highly doubt), no DRM could further expand the possibility of a used eBook marketplace. Consumers purchasing an unprotected file, will have no disincentive to redistribute their files (either for resale, exchange or without any request for remuneration) which could be a huge blow to authors and publishers alike. Additionally, as evil as we make DRM out to be, it’s the very thing that allows us to track reader behavior, to know who, where, when and possibly shed some light into why a reader likes (or doesn’t) a book.

  2. Andrea D'Orta

    Used ebook marketplaces already exisit and they are called filesharing sites. The only difference is that there is no direct money changing hands or a proper transaction taking place. I think the issue here is that Amazon ecosystem is squeezing the market and the only way to counter this threat is to create a similarly large alternative open-ecosystem where small/medium retailers can have a chance to trade. Furthermore, honest consumers will benefit from it because it will create full interoperability between various devices and ultimately a multi- market with true competitive pricing and quality of service. The alternative would be a total kindle assimilation.

  3. James Byrd

    The article says: “The suit seeks to make it so that open-source and DRM-free ebooks can be read on the Kindle and other e-reading devices”

    That doesn’t make sense. The Kindle can already read DRM-free ebooks. I’ve read PDF ebooks and plenty of MobiPocket books on my kindle that did not have DRM. Many of the books you buy directly from Amazon do not have DRM.

    Plus, KDP gives authors the option of applying DRM or not applying it to their e-books. I publish several books through KDP, and none of them have DRM. I don’t think Amazon is pro-DRM at all, or else they would not make it optional. In particular, they would probably force KDP Select users to apply DRM (but they don’t).

    Granted, the Kindle Store terms of service state that you can only read Kindle books that you buy from Amazon on an approved Kindle reading application (meaning a Kindle device, Kindle for PC, or an app). But that doesn’t stop you from loading e-books you buy from other vendors onto your Kindle.

    Either the nature of the lawsuit is being misrepresented here or the plaintiffs don’t know what they are doing.

  4. Cory Verner

    I do think there is a middle ground here. We need to look for options that make file sharing difficult but allow customers to actually use the content they purchase in the manner and on the device of their choosing. Presently, the vast majority of DRM’d files purchased on independent etail sites use Adobe DRM. These files cannot be read on a kindle device in most cases. It is estimated that 60% of ebook readers use a Kindle, so this significantly limits the reach an independent ebook retailer has.

    The exception, of course, is using apps to allow the content to be read. This only solves delivery issues on tablets and phones, however, and not on Kindle e-ink readers. Also, it’s not ideal since customers need to remember where they purchased the content and go to the associated app to read the book. Also, app solutions are very expensive and so only the largest of the independents will be able to implement them. I wrote more about these issues in an article early last year.

    We have been experimenting with several options (not all are live yet) on our ebook download site, including watermarking. In most cases the files are not DRM’d in the traditional sense, but the average user will have difficulty sharing the books they purchase. In the case of watermarking we have performed several tests stripping watermarks from files and have consistently found it easier to break Adobe’s DRM than to remove the watermarks.

    The goal of DRM should be to prevent mass sharing, not to exclude a majority of etailers from selling ebooks, which DRM certainly does. We have requests almost weekly of people wanting to sell ebooks who can’t because of DRM. These include authors, publishers, Christian ministries and retailers (both traditional and e).

  5. Joan Mullally

    DRM is optional. The publisher/author makes this choice for every title they publish through the KDP system at Amazon. They are not forcing publishers to do anything. And most people in the industry know that most DRM can be cracked if someone is determined to steal content.

    You also do not need a Kindle device in order to be able to read ebooks that you buy from Amazon. Using the free apps available, you can read on any device. Amazon is basically offering a ‘digital locker’ you can check books in and out of in whatever format you would like to read in. There is no restricted access, as they are implying. I can read my book on my Kindle, ipad or iphone, or right on my desktop. I can even SHARE it with another person for 14 days. At the end of that timel, I get it back and they can decide to buy it or not depending on if they want to continue using it.

    All this flexibility, rather than supposedly rigid, Procrustean DRM, is really what has these indies up in arms and running scared. They are late to the ebook party and want revenue and this lawsuit is a feeble attempt to try to deal with this issue.

    But would I buy an ebook from any of these Indies? Probably not. Why? It has nothing to do with DRM. Let’s face facts; how many of these booksellers are we confident will be around in 5 years? If ‘Indie Bookseller X’ went out of business, would my library of ebooks vanish when they did?

    By contrast, most consumers are confident Amazon will be around in 5 years, or longer.

    Most have also experienced the Amazon level of customer service, which in many cases has been superior, in my personal experience, to many other sites, let alone small ‘mom and pop’ bookstores.
    I do not really see any of these albeit worthy booksellers having the staff on hand capable of dealing with multiple devices, platforms, user issues and so on.

    I love books, and buy more in one month than most people do in a year. I was an early adopter of Amazon when it first started and despite a few hiccups, nothing in the past 15 years or so has caused me to change my mind about them.

    Does it mean me shopping in fewer Indie stores? Not really, because of the Amazon marketplace, where I have got many second-hand bargains over the years, purchases, may we remind ourselves, that do not enrich any publisher or record label or film studio, but rather the seller, the Indie store.

    Does it mean a wider array of titles-absolutely, because I can buy quality ebooks from top publishers and Indie publishers and even direct from talented authors thanks to the disintermediation offered by Amazon through their KDP program.

    If Indies want to ‘follow the money’, why not work WITH Amazon, instead of filing this transparent lawsuit that just shows how little they know about the ebook and publishing industry.

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