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Bookseller abandons suit against chains

The owner of a bookstore in Chapel Hill, North Carolina drops his lawsuit against Amazon, Barnes & Noble, and Borders.

    In the independent bookstores' battle for survival, the chains and Internet giants won a small victory yesterday as a bookstore in Chapel Hill, North Carolina, dropped a lawsuit alleging violation of antitrust laws and unfair competition.

    The suit named, Barnes & Noble, and Borders. Filed last August in U.S. District Court in New York in by Wallace Kuralt, owner of the Intimate Bookshop, it asked for $11.25 million in actual damages as well as unspecified injunctive relief and punitive damages.

    The suit alleged that the companies used predatory pricing policies to squeeze smaller stores out of competition. But Kuralt was never joined by national or regional booksellers' associations in his sui and eventually he simply abandoned it, said Amazon spokesman Bill Curry.

    Amazon cited the suit in its 10-K filing with the Securites and Exchange Commission today. The company is also fighting charges from Wal-Mart that Amazon's recruitment of certain executives from the mass-market retailer constituted misappropriation of trade secrets.

    Kuralt filed his suit after closing down eight of his nine bookstores in the Chapel Hill area during the last two years. Kuralt shuttered his store in downtown Chapel Hill, home of the University of North Carolina, last year after almost 30 years in the same spot.

    That store has been replaced by a perfumery, and now there are no stores selling new books in downtown Chapel Hill, according to Keebe Fitch, treasurer of the Southeast Booksellers Association.

    "The community is feeling the loss of the store," said Fitch.

    Meanwhile, a lawsuit against Barnes & Noble and Borders filed by the American Booksellers Association on behalf of more than 25 bookstores, mostly in California, is still pending, said ABA spokesman Len Vlahos. That suit does not include Amazon.

    Kuralt's suit may not have been much of a threat, although pending litigation is always a concern for Amazon, Curry said. In this case, "The outcome speaks for itself," he added.

    In the 10K filing, Amazon said that it is decreasing its dependence on Ingram, the book distributor that has agreed to merge with Amazon competitor Barnes & Noble. In 1998, Amazon bought 40 percent of its books from Ingram, down from 60 percent in 1997, although Ingram remains Amazon's single largest supplier.

    Amazon also plans to expand its presence in foreign markets, according to the filing, although international sales have been decreasing as a percentage of the company's total sales. International sales, including exports from the United States, were 33 percent of the total in 1996, 25 percent in 1997 and just 20 percent in 1998.