Amazon Faces Lawsuit Over Kindle Cracks
15 Juillet 2009 - 7:50PM
Dow Jones News
Amazon.com Inc.'s (AMZN) Kindle electronic book reader may not
be all its cracked up to be.
That's what one Seattle area customer claims in a lawsuit filed
Tuesday that alleges his $359 Kindle 2 has cracked and its screen
froze only a few months after purchase. The lawsuit, filed in U.S.
District Court for the Western District of Washington, seeks
class-action status and says damages could exceed $5 million in
refunds, treble damages and legal costs.
Matthew Geise, a Seattle real estate executive, says he bought a
second-generation Kindle for his wife and the device's screen
started freezing after cracks developed on the frame. The cracks
appeared near where the official Amazon leather cover attaches to
the device with metal clips.
Beth Terrell, Geise's lawyer, acknowledged in an interview that
she wasn't sure whether the screen damage was caused by the
cracks.
The lawsuit is a first chink in what has largely been a huge
success story for Amazon. Citi analyst Mark Mahaney has estimated
Amazon's Kindle-related revenue could reach $1.2 billion by 2010,
or roughly 5% of the company's sales next year. Amazon wasn't
immediately available for comment on the lawsuit.
Amazon does not release Kindle sales figures, making it much
more difficult to estimate the number of customers who might be
part of the class action. The lawsuit states that Internet
complaint boards and product review sites contain scores, if not
hundreds, of complaints from Kindle owners whose devices have been
damaged by their covers.
"I think it's a much bigger problem, given the number of posts
going up everyday," said Terrell. "These are just the tip of the
iceberg."
The lawsuit states that Geise called Amazon to make a warranty
claim and was told by a customer-service representative the company
would repair the screen freeze but not the cracks because they were
caused by improperly opening the cover backwards. Geise, who said
in an interview that the Kindle was not improperly opened, was told
he would have to pay $200 for repairs.
The lawsuit also states that an Amazon supervisor later told
Geise's wife that cracking of the Kindle was a "common
problem."
Shares Amazon rose 2.3% to $83.85 in midday trading.
-By Scott Morrison, Dow Jones Newswires; 415-765-6118;
scott.morrison@dowjones.com