With capitalism continuing to surge and tighten its hold on the market, price fixing is becoming an ever expanding issue. This happens when companies confer with each other about what prices should be, instead of coming to their own prices without comparing notes with the competition (in a bet to increase their own profits and keep the market in their pocket). This limits the possibility of competition, forcing the consumer to have no other choice but to pay up, unaware that they are being led to pay more than what they should.

The U.S. economy is part socialism and part capitalism, with recent years leaning more towards capitalism as companies continue to vie for the biggest profit. Antitrust laws have been put into place to protect consumers from these predatory business practices and allow for fair competition in the market. Even the UK has similar laws and entities to protect consumers. Companies like Amazon and Google however, try to control and twist the market for their gains, as can be seen from their lack of initiative to clear out fake reviews, which these companies thrive off for customer enticement. With these continual pushes against the set boundaries, we see it leak out into more than just their marketplaces, but into manufacturing sectors as well.

There are numerous cases where large companies like Amazon and the Big Five in publishing have been accused of trying to fix market prices. By working together to create a baseline profit, they effectively stunt the market growth. This makes it impossible for independent businesses to survive, and allows these mega-corporations to reap the benefits.

In 2011, Hagens Berman filed a suit against the Big Five along with Apple, claiming that they were working together to force Amazon to raise its e-book prices. The lawsuit went on to accuse that because Amazon was offering books at $9.99 it would disrupt the sales status quo among publishers, while also making it difficult for Apple to enter the e-book competition with low returns. It took about three years for a judge to rule that Apple and the Big Five did attempt to change the pricing of e-books for their interests. It concluded with Apple paying upwards of $166 million towards state and consumer charges.

As of January 2021, Amazon and Big Five are currently under similar investigations for price-fixing in the digital market. The case is being headed by the same firm that won against Apple a decade ago. Despite the current laws in place, Amazon and the Big Five are trying to place the threshold of prices within their control and keep it at a point where they alone can benefit. Smaller businesses would be unable to compete, as they could not turn a profit in the same way Amazon easily can through slashed pricing and bulk stock. This choking of the market is exactly what the antitrust laws were created to prevent. Currently, the case is still ongoing, with publishers arguing that the case is baseless and filing for dismissal

In addition to this lawsuit, the same law firm, Hagens Berman has filed a second lawsuit in March of 2021. This lawsuit is being made on behalf of booksellers, who claim that Big Five and Amazon are restraining price competition in the retail and online print market. With Amazon’s domination of the book industry, it removes the competition which “alters the framework of the industry and severely threatens the industry”. Independent bookstores are fighting tooth and nail to stay afloat against Jeff Bezos’ retail giant. These stores are at the heart of the community and are there for the people. Last year, the American Booksellers Association launched a campaign against Amazon called #BoxedOut, as a call-to-arms for consumers to shop and support their local independent bookstores, while boycotting purchases from Amazon.

Amazon’s uninhibited growth and unrestrained self-interest has led to these cases and continual problems. Even with  antitrust laws in place, corporations like Amazon, as well as the Big Five publishing houses, will continue to push the edge just a little further every time. Thus far they have been caught and reprimanded, yet continue in their efforts to increase their bottom line with no regard for the consumers, their authors, or independent retailers and publishers. In July of 2021, the Biden Administration issued an executive order that would begin to scrutinize companies more closely about the violation of these antitrust laws. In particular, the order intends to monitor mergers more closely (of which we have seen countless within the publishing sector this year alone). Hopefully revisions to these guidelines will make it harder for any company to take advantage of loopholes, and by doing so will begin a restructuring of a grossly inequitable system.

Quick Fox will continue to monitor these ongoing lawsuits and will update this piece as the cases develop.

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