A boy is shown reading a school assignment on an iPad in Montreal, April 1, 2011.Sheila Boardman
The e-book price fixing allegations at the heart of a lawsuit by the U.S. Department of Justice are now erupting on this side of the border.
A proposed class-action lawsuit filed in B.C. Supreme Court by the Vancouver firm Camp Fiorante Matthews Mogerman alleges that Apple Inc. and a number of publishers engaged in a "conspiracy" to lessen competition and "fix, maintain, increase or control the prices of e-books." It is the most recent of at least five such suits filed recently in courts in Ontario, Quebec and B.C.
Along with Apple, the publishers targeted by the Canadian actions include Hachette Book Group Inc., HarperCollins Publishers Inc., Holtzbrinck Publishers LLC, conducting business as Macmillan Publishers Inc., Penguin Group, Simon & Schuster, and their Canadian subsidiaries.
None of the allegations has been proven in court. Statements of defence have not been filed in the Canadian cases, according to lawyers for the plaintiffs involved. There was no comment as of late Wednesday from Penguin, Hatchette or HarperCollins.
The statement of claim in B.C. alleges that the defendants conspired to change the method by which e-books were sold, driving up prices, and with the intention of eroding the market share held by Amazon, which was the largest eBook seller "before the alleged conspiracy was implemented," it says.
It also alleges that the defendants or their representatives communicated secretly, in person and by phone, to discuss and fix e-book prices, in the lead-up to the introduction of Apple's iPad, which can function as an eReader, in April of 2010.
In addition it alleges that the growing Canadian eBook market is highly concentrated, making it more susceptible to collusion.
The allegations in the Canadian suits echo the allegations in the U.S., where the U.S. Justice Department has launched a high-profile antitrust suit.
"The U.S. case isn't going to cover Canadian consumers. So it's the same underlying facts, it's the same consumer protection agenda, but it is for different consumers in a different country," said lawyer Reidar Mogerman, who filed the suit in B.C. Supreme Court last week on behalf of plaintiff Denise E. McCabe, a non-practising Kamloops lawyer who has purchased a "significant" number of e-books.
Mr. Mogerman is working with London, Ont., firm Siskinds LLP, which filed a similar suit in the Ontario Superior Court of Justice last week.
"We did our own research in Canada in terms of are the markets the same, does the pricing work the same, if there was a wrongful act in the United States, did that same act take place in Canada and therefore would the same legal claims exist? And we believe the same claims do exist," said Charles Wright with Siskinds. "It is the same model and Canadians would have been affected in the same way."
Ms. McCabe's statement of claim suggests damages sought, should the class action be certified and proceed, will amount to both overcharged amounts – which can be quantified – and punitive damages.
"A U.S. case only covers a U.S. resident and obviously it would be our view that to the extent that the claims have merit and there's compensation to be paid to U.S. residents, there's no reason similar compensation shouldn't be available for Canadian residents," said Mr. Wright.
Mr. Wright and Mr. Mogerman say they will work in tandem with Seattle-based firm Hagens Berman Sobol Shapiro LLP, which is co-lead counsel in the related U.S. litigation.
Last week, the U.S. Department of Justice announced that it had reached settlements with Hachette, HarperCollins and Simon & Schuster, but would be continuing litigation against Apple, Macmillan and Penguin, which have aggressively denied the allegations.
Marsha Lederman