National Association of College Stores Resolves Amazon Litigation

"Amazon may change its advertising in 2012 and later years, and it would not serve the college store industry well if we were to spend hundreds of thousands of dollars litigating about advertisements that may no longer be used in the future," said NACS President Danny Key, CCR, Director of Bookstore Services at Wingate University, Wingate, NC.

The lawsuit arose because NACS filed a proceeding with the Better Business Bureau's National Advertising Division (NAD) complaining about Amazon's textbook price comparisons used in the 2011 spring semester. That advertising claimed students could save "up to 60%" on new textbooks, "up to 90%" on used textbooks, and that they could receive "up to 60%" on buy-back when dealing with Amazon.

Before the NAD could address whether Amazon's ads were substantiated, Amazon filed suit against NACS in federal court in Seattle seeking a judgment that its claims were neither false nor misleading under the federal Lanham Act. When Amazon filed its federal case, NAD decided not to consider the NACS complaint.

NACS sought to have the federal case dismissed on jurisdictional grounds, but the court denied the motion.

As part of the settlement process, Amazon provided NACS' attorneys, on a confidential basis, with the methodology by which it substantiates its savings claims and the results of its substantiation. While not endorsing the substantiation methodology or the results obtained, NACS agreed that it was sufficient to determine that there is no current dispute about the advertising that NACS had questioned in its NAD complaint. As a consequence, NACS and Amazon agreed to settle the litigation with no money being exchanged and an agreement not to challenge each other about substantially similar claims for at least one year.

Truth in Advertising Paramount
NACS is pleased that it was able to resolve this case efficiently, and that it has brought to the forefront once again the need for all retailers, whether physical stores or on-line sellers, the need to substantiate the claims that they make in their advertising.

NACS is convinced that students receive the best value for their textbook-buying dollars by purchasing course materials, whether in print or online, in or through the college store. Whether the student wants a new physical book, a used book, a course-pack, a rental, or an electronic book, the college store offers a range of options at the best value, and it remains the most accessible, user-friendly option for college students, while also supporting higher education.