As many of you probably remember, in March, 2008, an Amazon / BookSurge representative called us on the phone and told us we (and other Print on Demand publishers) must start paying Amazon to print our books. If we didn’t, they would remove our “buy it now” buttons from Amazon.com.

NOTE: Amazon recently retired the BookSurge name (that was not a surprise), and is now doing their POD business under the name CreateSpace. Other than the name, not much appears to have changed.

After the phone call, we publicly cried foul, and alerted the publishing industry about the threat. We subsequently heard from other publishers who had received the same ultimatum, including a university press. A media firestorm erupted and many authors and publishers alike screamed “monopoly”, launching an online revolt. Several, including myself, boycotted Amazon.com, and publicly shared their anger about the Amazon / BookSurge (now CreateSpace) Ultimatum.

Our publicity efforts forced Amazon to finally make public what targeted POD publishers claimed to have been told through what some considered intimidating phone conversations. Until that point, Amazon hadn’t appeared to want to put anything in writing.

Unfortunately, many of the large POD publishers signed the Amazon / BookSurge (now CreateSpace) contract after Amazon gave them a deadline. We did not. BookLocker.com, instead, filed a class-action lawsuit against Amazon, alleging their actions violated federal antitrust laws.

That’s when the real battle began. We spent hundreds of hours researching, corresponding with other publishers, authors and our attorneys, and writing and rewriting legalese that would at times make my eyes glaze over. Each time I had to work on the case, my initial anger about the unfairness of it all would return. I’ll admit it was hard to keep a smile on my face most days. The worst part of the entire experience was the time I was forced to spend away from our children because of Amazon’s actions. Mason is three years old and we’ve been dealing with this for almost two years now.

As expected, Amazon filed a motion to dismiss. We were not surprised in August, 2009 when Chief U.S. District Judge John Woodcock Jr. issued a 26-page order denying Amazon’s motion to dismiss.

We suspected Amazon would want to settle before discovery began and we were right.

We hammered out the details for almost two months. I wanted to share the settlement information with you all in the worst way during that time, but could not because the negotiations could have fallen through at any moment (and almost did a few times!). For example, we specified initially that any cash offered to BookLocker by Amazon would go directly to a charity and we wanted that statement included in the settlement. Amazon refused to allow the charity wording to appear in there. (Why do you think they did that??) We subsequently refused any cash payment from Amazon. We then included a statement in the settlement that BookLocker declined a cash settlement from Amazon…and Amazon insisted on removing that verbiage, too.

You can read the final settlement HERE.

We didn’t do this for the money. We did it to make Amazon understand that covert efforts aimed at forcing POD publishers to pay Amazon / BookSurge (now Createspace) to print their books is not the way responsible corporate citizens should act. By getting Amazon to rescind their pay-us-to-print-your-books-or-else policy, we believe BookLocker’s lawsuit achieved its goal.

Large companies will run all over small ones unless somebody fights back. The publishing industry contains many players and, for the benefit of readers everywhere, they all deserve an equal place in the market. Allowing the largest online retailer to strong-arm publishers into paying more for a product that may, in fact, be inferior hurts publishers, authors, and, ultimately, the reader. Yes, BookSurge (now operating under the CreateSpace name) has had quality problems. We recently ordered some books from them to see if things had changed. One arrived looking so bad that Amazon inserted an apology note into the book itself, saying it was the best they could get from their distributor. (IT’S THEIR BOOK!) Another arrived with the interior appearing upside-down. Their quality problems have been reported online by others as well.

I know many of you, readers, authors, and publishers alike, have many questions and I’ll be happy to answer them! Please email your questions to me at angela – at – booklocker.com. I’ll publish the questions (anonymously, of course) and the answers right here – so keep checking back.

Finally, we want to publicly express our deepest gratitude to Seth Klein, Bob Izard, and all the caring folks at Izard Nobel LLP, and to Anthony Pellegrini and the team at Rudman & Winchell. Without them, we and all POD publishers might be in a completely different position today.

UPDATE – NEWS ARTICLES:

Amazon, Booklocker Settle
Publishers Weekly

Amazon settles lawsuit over print-on-demand books
TechFlash

Amazon Settles Antitrust Lawsuit Filed by BookLocker
Writing for Hire

Amazon Agree Settlement in Booklocker.com Antitrust Lawsuit
Mick Rooney – POD, Self Publishing and Independent Publishing

Amazon Backs Down On Demanding Publisher Use Only Its Own Print-On-Demand Solution
TechDirt

Amazon defeated by independent POD Publishers
The Long Riders’ Guild Press

Amazon Settles Antitrust Lawsuit Filed by BookLocker
Writing for Hire

Amazon – And the Perils of PODing
Sgt. Mom

Who Moved My Buy Button?

UPDATE – QUESTIONS FROM READERS, AUTHORS AND PUBLISHERS:

What about the ones who caved? Do you think they’ll renegotiate? – Nan

Unfortunately, since the case had not yet been certified as class-action, the POD publishers who caved must ask their own attorneys what they can do. Had they joined us as lead plaintiffs in the beginning (many publishers were afraid to publicly confront Amazon), they would have been covered by any settlement as well. I admit this was a very bitter part of the story for me. We were basically thrown to the wolves, and had to publicly fight on our own, with many publishers whispering to us in the background, but not publicly joining us on the front lines. I may write about that in the future. For now, we are enjoying the victory.

I’m delighted to hear this but a bit worried that you and Richard were forced to pay all of the legal fees you incurred over the two year period. I admit I only scanned the entire write up — did you indeed have to pay everything with no compensation? -T

Oh, heavens no. The law firm took our case on a contingency basis and Amazon agreed to pay our attorneys $300K directly.

You are sweet to be concerned about us, T!! No way could we afford to front $300K in legal fees (or even a fraction of that). Makes my stomach turn just thinking about it.

Congratulations on the settlement. Could you clarify a point? I’ve read the settlement, and it’s clear that Booklocker is exempted from Amazon’s “pay us to print your books or else” policy, but what about other publishers? Their November 2009 update mentions working on a “case-by-case basis,” but this could mean that any other publisher could be subject to the same “or else” policy. Do I misunderstand? – P.

Since our case was not yet certified as class-action, and since none of the “other guys” had joined us as lead plaintiffs, the settlement itself does not (and could not) apply to anyone other than Booklocker.com.

The publishers who have already signed the Amazon / BookSurge (now CreateSpace) contract would need to contact their own attorneys to assess their situation. We could not negotiate a settlement on behalf of all POD publishers because we were the only plaintiff at that point in time.

While I agree that Amazon’s new statement is very vague and doesn’t really promise anything, they did agree to rescind their original policy. Since we had no control over their actions with regards to other POD publishers (since they weren’t plaintiffs yet), we couldn’t force them to offer something to companies (potential class members) that weren’t (yet) involved in the lawsuit.

Again, had any of them stepped up to the plate and stood beside us as lead plaintiffs, they would also have been protected by any settlement. Unfortunately, we were contacted by many, some of whom begged us to never divulge their names, who admitted they were afraid of going public and angering Amazon.

You at Booklocker are truly amazing. I say congratulations to the Amazon litigation, I just kowtow before you. I love your triumph. I looked up your pages about that, but couldn’t find out why you settled when you could have won. -E.

Amazon rescinded their policy and promised not to mess with us. Again, while we’d have loved to protect all POD authors and publishers, no other publisher had stepped forward to join us in the lawsuit. We couldn’t make deals for companies that weren’t plaintiffs. We are very happy that we were able to protect our authors.

Sure, we could have gotten greedy and demanded tens of thousands of dollars, etc, etc., but that’s just not the kind of people we are. Why drag it out, muck up the courts, force the legal fees even higher (on both sides), and keep the stress at such an extreme level when we could just get back to work and living our normal, quiet lives? Like I said, we didn’t do this for the money. We did it because it was the right thing to do.

On February 9th, BookLocker.com and Amazon / BookSurge were in Federal court in Bangor, Maine. BookLocker subsequently filed an amended complaint to clarify some points raised by the judge.

That amended complaint is here:
http://antitrust.booklocker.com/amended-complaint.pdf

Amazon / BookSurge has until March 20th to respond.

As expected, Amazon filed a motion to dismiss our lawsuit last month. BookLocker today filed its response.

1. BookLocker’s original complaint is HERE.

2. Amazon’s motion is HERE.

3. BookLocker’s response is HERE.

We’d love to hear your COMMENTS! Please post them RIGHT HERE.

The wheels of justice tend to turn very slowly. We’ll keep you updated as the case progresses.

Just a quick update about the status of the lawsuit.  Amazon has retained Gibson, Dunn & Crutcher, LLP as their law firm.  Under the current scheduling order entered by the court, Amazon will be filing a motion to dismiss the case by June 30th. A motion to dismiss is basically Amazon’s legal argument as to why, even assuming the facts alleged in our complaint are true, those allegations do not constitute a violation of antitrust laws.  BookLocker will then have until July 31st to respond with an opposition brief. In the BookLocker opposition, we will detail all the reasons why we believe Amazon’s argument is wrong. Finally, Amazon will have the opportunity to file a reply brief on August 21st, after which the judge will make a determination as to whose argument is correct as a legal matter, and thus if the case can proceed.

We just got confirmation that Amazon was served on May 21st. If they
didn’t know about the suit before, they sure do now.

The ball is now in Amazon’s court, and we’ll see how they respond.

BookLocker.com has filed a class action lawsuit against Amazon.com in response to Amazon’s recent attempts to force all publishers using Print on Demand (POD) technology to pay Amazon to print their books. You can read the complaint here.

This article may be quoted and/or reprinted in its entirety.

BookLocker.com has filed a class action lawsuit against Amazon.com in response to Amazon’s recent attempts to force all publishers using Print on Demand (POD) technology to pay Amazon to print their books.

You can read the complaint here.

Amazon began their clandestine effort earlier this year by phone (nobody there seemed to want to put anything in writing), approaching POD publishers, and telling them they must pay Amazon to print their books or their active “buy” buttons would be turned off at the Amazon.com website. What this means is Amazon customers won’t be able to purchase those books directly from Amazon.com (and would not qualify for free shipping), but only through third-party resellers on the site.

Under the Amazon/BookSurge contract, Amazon:

* Controls the printing price of the POD books – The prices can change at anytime, at Amazon’s discretion, with 30 days notice.

* Controls the retail price of the POD books across the board – Publishers would not be able to sell their books for a lower price through “any other channel” (including other bookstores), and would not even be able to sell their books for less to their own customers under any circumstances.

* Controls the wholesale price of the POD books – Amazon’s new contract demands a 48%-52% discount (different contracts have been sent to different publishers). Many small, independent publishers can’t afford to offer this discount to bookstores and would be forced to raise their book prices, which will ultimately hurt book buyers.

* Controls the digital setup and scanning fees for each POD title – After the initial dump of current books, publishers would be charged approximately $50 per title (again, different publishers are receiving different contracts) in setup fees and/or varying scanning fees payable to Amazon/BookSurge. These fees can change at anytime, at Amazon’s discretion, with 30 days notice.

* Controls the formatting specifications – Many publishers can’t absorb the massive number of man-hours required to reformat every single book interior and cover file in their inventory to match Amazon’s specifications.

* Controls the quality of the books – Refer to THIS ARTICLE for details and links. It’s no secret that BookSurge has a poor reputation for quality, including complaints about pages falling out of books, upside-down pages, and more. If a publisher pays Amazon to print their books, their reputation could suffer due to any possible BookSurge quality problems with that publisher’s books.

* Attempts to control the public’s knowledge of who has signed the Amazon/BookSurge contract, along with the details of that contract, through a confidentiality clause, so that publishers signing it may feel they can’t talk about it at all.

* And, Amazon controls the golden nugget – that coveted “buy” button that book buyers want (so their order can qualify for free shipping).

In a public statement, Amazon offered only one alternative to publishers, which is their “Advantage Program.” However, they did not divulge in the public statement that the terms of the Advantage Program are even worse than their printing contract. The Advantage Program requires POD publishers to give Amazon 55% of the list price, pay them $29.95/year, and pay the shipping costs for books going to Amazon.

STRONG DISSENT FROM INDUSTRY REPRESENTATIVES
The Author’s Guild, the American Society of Journalists and Authors (ASJA), The Small Publishers Association of North America (SPAN), YouWriteOn.com (the U.K.’s leading writer’s website) and the National Writer’s Union have all issued strong statements denouncing Amazon’s attempted power grab of the industry.

OUR STORY
After hearing rumors of Amazon’s alleged activities, we spoke to an Amazon/Booksurge representative by phone on March 26th. You can read what transpired that day HERE.

After reviewing all the materials presented to us, and after talking on- and off-the-record with publishers, authors and industry representatives at all levels of this controversy, it is our opinion that Amazon may be positioning itself to directly print and control every book it sells. By forcing publishers to sign their extraordinarily oppressive contract, Amazon gains the power to charge publishers whatever printing and distribution costs it desires, as well as controlling the retail, discount and wholesale prices of the books it prints, and, through this contract, automatically positions itself to control the market.

We cannot say for certain if what Amazon is doing is legal or not at this point; that is for the Federal courts to decide. However, in our opinion, the seemingly covert manner in which Amazon has conducted itself in this matter seems to make their actions highly suspicious.

WHAT’S NEXT?
Amazon has already taken control of publishers’ ebook sales on the Amazon.com website by requiring ebooks to be available for their ebook reader, the Kindle. Now, Amazon is attempting to take control of the printing of all POD books. We wonder if traditionally published books are next. Some are speculating that Amazon won’t stop until they are being paid to print every book they sell.

ADDITIONAL INFORMATION
You can read more information about this situation HERE, including a time-line of the events that have transpired. You can comment on this situation HERE.

ARE YOU AFFECTED?
According to Amazon’s public statement, ALL POD books will be affected. If you are a POD publisher (this includes self-published authors who publish their own POD books through a printer), or a traditional publisher using POD technology for some or all your books, and would like more information, please contact:

Angela Hoy, Publisher
BookLocker.com
angela@booklocker.com

COMMENTS can be posted to the bottom of THIS PAGE.