1

6
AMERICAN ARBITRATION ASSOCIATION
7

8 AMAZON DIGITAL SERVICES LLC, a

Delaware limited liability corporation, No.
9
Claimant, DEMAND FOR ARBITRATION
10
v.
11
NILMER RUBIO, an individual,
12
Respondent.
13

14 INTRODUCTION AND BACKGROUND

15 1. Respondent Nilmer Rubio has engaged in a scheme to manipulate and abuse

16 Amazon’s services to reap illicit financial gain, while harming Amazon and those who use its

17 services. Amazon brings this action both to protect its users from Respondent’s unlawful

18 scheme and to obtain redress for the harm inflicted by it.

19 2. Amazon Digital Services LLC, a subsidiary of Amazon.com, Inc. (collectively,

20 “Amazon”) gives independent authors and publishers the ability to publish works directly

21 through Amazon’s Kindle Direct Publishing (“KDP”) program.

22 3. KDP allows authors and independent publishers to reach millions of active

23 eBook readers on Amazon. Authors control the rights to their works and can make changes to

24 their books at any time. Authors can set up an eBook for publication in minutes, and within 72

25 hours the eBook appears for sale on the Amazon Kindle Store.

26 4. KDP users earn royalties when Amazon customers purchase their books or read

27 them through Kindle subscription reading programs. Kindle Unlimited (“KU”) permits

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 1 subscribers, for a monthly fee, to read as many books as they want from a selection of over one

2 million titles. The Kindle Owners’ Lending Library (“KOLL”) is a benefit for Amazon Prime

3 members, and it allows members to borrow one eBook per month at no additional cost. KDP

4 authors can choose to include their books in KU and KOLL by enrolling in an optional program

5 called KDP Select, which offers certain benefits to authors in exchange for making their eBooks

6 exclusively available through Amazon for a 90-day period.

7 5. KDP authors participating in KDP Select earn monthly royalties based on the

8 number of pages of their eBooks that KU and KOLL customers read that month. Amazon

9 maintains a global royalty fund, from which KDP Select authors receive a share, calculated as a

10 percentage of the total number of pages read through KU and KOLL that month.

11 6. The more pages KU and KOLL customers read of an individual author’s books,

12 the larger the author’s share of the royalty fund becomes; and, accordingly, other authors will

13 receive less from the fund. The KDP royalty system thus depends on the integrity of a fair

14 allocation of page reads—i.e., that authors are not artificially inflating their page reads to the

15 detriment of other authors.

16 7. Amazon thus employs various tools, including automated and manual reviews, to

17 protect against abuse of the KDP royalty system. Amazon also requires KDP authors to ensure

18 that no tactics used to promote their books manipulate Amazon eBook programs. If authors

19 cannot trust that the KDP royalty system fairly rewards page reads of their eBooks, that loss of

20 trust damages the integrity of the KDP program and the reputation of Amazon as a reliable and

21 reputable self-publishing service.

22 8. KDP Select authors’ books are also available for sale to Amazon customers to

23 purchase at an individual price. These book sales counts towards a book’s “best seller’s rank” on

24 Amazon. The higher the book’s best seller’s rank, the more visible it becomes to customers,

25 which in turn may result in increased purchases and greater author royalties from KU/KOLL

26 reading activity.

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 1 9. Another benefit that KDP Select offers to authors is the ability to select up to five

2 “promo days” out of each 90-day KDP Select enrollment period in which their eBook will be

3 available to customers to download for free. Books that are downloaded for free during the

4 promo days also count towards their Amazon best seller’s rank, and the promo days can have

5 the effect of allowing books to rise in best seller’s ranking.

6 10. Amazon prohibits KDP authors from publishing books that are undifferentiated

7 or barely differentiated from existing titles in the Kindle store for purposes of preserving a

8 positive customer experience.

9 11. Respondent Nilmer Rubio has tried to manipulate and abuse the KDP service for

10 financial gain and to the detriment of other KDP authors and Amazon’s reputation. Rubio has

11 proposed to authors that he can artificially inflate their page reads in return for a share of their

12 additional profits—as a kick-back. As one author wrote Amazon, Mr. Rubio’s actions “call into

13 question the integrity of [Amazon’s] platform.”

14 12. Amazon files this demand for arbitration against Mr. Rubio to protect Amazon

15 and its publishers against Mr. Rubio’s abuse of the KDP service, bringing claims for breach of

16 contract, intentional interference with contractual relations, and violation of the Washington

17 Consumer Protection Act.

18 PARTIES

19 13. Claimant Amazon Digital Services LLC is a Delaware limited liability

20 corporation with its principal place of business in Seattle, Washington.

21 14. Respondent Nilmer Rubio is an individual residing in Olangapo City, in the

22 Philippines.

23 JURISDICTION AND GOVERNING LAW

24 15. Mr. Rubio agreed to the Amazon Conditions of Use when he created his Amazon

25 customer account on October 11, 2015. Mr. Rubio agreed that “[a]ny dispute or claim relating

26 in any way to your use of any Amazon Service, or to any products or services sold or distributed

27 by Amazon or through Amazon.com will be resolved by binding arbitration ….” The

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 1 Conditions of Use further specified the arbitration would be conducted by the American

2 Arbitration Association under its rules.

3 16. In using the Kindle Store—including to access eBooks in the KU library—Mr.

4 Rubio also agreed to the Kindle Store Terms of Use. Mr. Rubio agreed that “[a]ny dispute or

5 claim arising from or relating to this Agreement or the Service is subject to the binding

6 arbitration … in the Amazon.com Conditions of Use.”

7 17. The parties’ agreements, the Federal Arbitration Act and the laws of the State of

8 Washington govern this dispute.

9 18. Amazon requests this arbitration be conducted in person in King County,

10 Washington, where the parties’ contractual relationship is centered, with the list of potential

11 arbitrators drawn from the Western District of Washington where this matter is to be heard.

12 FACTS COMMON TO ALL CLAIMS

13 19. On January 12, 2017, Amazon received a complaint from a KDP author that Mr.

14 Rubio had approached the author on the social media platform Facebook. Mr. Rubio offered to

15 increase the author’s page reads on KU, in exchange for a kick-back of 40 percent of the profits

16 from page reads. Mr. Rubio explained he would use a multitude of Amazon accounts to

17 artificially inflate the author’s numbers. Amazon has also received similar complaints about Mr.

18 Rubio from at least one other KDP author.

19 20. On information and belief, Mr. Rubio has created hundreds of Amazon customer

20 accounts. At one time, Mr. Rubio had his own KDP account as a self-publisher. That account,

21 however, was terminated because Amazon detected that Mr. Rubio had used it to engage in

22 abusive reading activities—i.e., he had been inflating page reads of his own eBooks.

23 21. On information and belief, Mr. Rubio has continued and will continue to

24 approach KDP authors with his proposed scam. Mr. Rubio’s promised conduct will directly

25 harm the integrity of the KDP royalty system and the royalties of other authors. His offers

26 alone, however, cause Amazon reputational harm, as the authors he approach cannot know if

27 their royalties reflect an accurate percentage of genuine page reads. Mr. Rubio’s scam also

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 1 causes Amazon monetary harm, if authors decide to leave or not join KDP because of concerns

2 about the integrity of the KDP royalty system and payments.

3 CLAIMS
4 First Claim: Breach of Contract (Kindle Store Terms of Use)

5 22. The Kindle Store Terms of Use constitute a binding and enforceable contract

6 between Amazon and Mr. Rubio.

7 23. Section 1 of the Kindle Store Terms of Use states that a user of the Kindle Store

8 has a “non-exclusive right to view, use, and display” Kindle Content, including eBooks in the

9 KU library, “solely for [the user’s] personal, non-commercial use.”

10 24. On information and belief, Mr. Rubio uses his Amazon account to exploit Kindle

11 Content for commercial use, by artificially inflating authors’ page reads in return for a share of

12 their KDP royalties.

13 25. Mr. Rubio’s material breaches have caused Amazon damage in the form of

14 reputational and monetary harm, the amount of which is to be proved in arbitration.

15 Second Claim: Breach of Contract (Conditions of Use)

16 26. The Conditions of Use constitute a binding and enforceable contract between

17 Amazon and Mr. Rubio.

18 27. The Conditions of Use state that “[n]o Amazon Service . . . may be . . . exploited

19 for any commercial purpose without express written consent of Amazon.” It further states that

20 “[y]ou may not misuse the Amazon Services.”

21 28. On information and belief, Mr. Rubio has exploited an Amazon Service—Kindle

22 Unlimited—for commercial use by artificially inflating authors’ page reads in return for a share

23 of their KDP royalties. This practice also constitutes a misuse of the Amazon Services.

24 29. Mr. Rubio’s material breaches have caused Amazon damage in the form of

25 reputational and monetary harm, the amount of which is to be proved in arbitration.

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ARBITRATION DEMAND – 5 L AW O F FI CE S
Suite 2200
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206.622.3150 main · 206.757.7700 fax
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 1 Third Claim: Intentional Interference with Contractual Relations

2 30. Every KDP author participating in KDP Select has agreed to the Terms and

3 Conditions for KDP Select Program (“KDP Select Terms”). Section 2.3 of the KDP Select

4 Terms establishes that Amazon will pay royalties to KDP authors based on a “proportionate

5 allocation” of the KDP Select fund, based on “how much of your content is read.”

6 31. Mr. Rubio knows of the KDP Select Terms—a contract between Amazon and

7 KDP authors—and has intentionally interfered with that relationship by offering to artificially

8 inflate page reads in return for a share of authors’ KDP royalties.

9 32. Mr. Rubio’s interference was through improper means—by violating the Kindle

10 Store Terms of Use and the Conditions of Use—and for the improper purpose of profiting from

11 his improper manipulation and abuse of the KDP royalty system.

12 33. Mr. Rubio’s intentional interference with Amazon’s contractual relationships

13 with KDP authors has caused Amazon damage in the form of reputational and monetary harm,

14 the amount of which is to be proved in arbitration.

15 Fourth Claim: Unfair Business Practice

16 34. Mr. Rubio has engaged in unfair and deceptive acts and practices in violation of

17 the Washington Consumer Protection Act, RCW 19.86.020.

18 35. By offering to artificially inflate page reads in return for a share of authors’ KDP

19 royalties, Mr. Rubio has engaged in an unfair or deceptive act or practice in trade or commerce.

20 36. Mr. Rubio’s acts and practices impact the public interest. By offering to

21 artificially inflate page reads in return for a share of authors’ KDP royalties, Mr. Rubio threatens

22 the integrity of the KDP’s system of royalties. Mr. Rubio’s unfair acts and practices affect not

23 only other KDP authors (who may question whether they receive a fair royalty share), but also

24 readers (who would lose access to content if authors leave KDP because of practices like Mr.

25 Rubio’s).

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Davis Wright Tremaine LLP

ARBITRATION DEMAND – 6 L AW O F FI CE S
Suite 2200
1201 Third Avenue
Seattle, WA 98101-3045
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 1 37. These unfair and deceptive acts and practices have proximately caused damage to

2 Amazon in the form of reputational and monetary harm, in an amount to be proved in

3 arbitration.

4 REQUEST FOR RELIEF

5 Amazon respectfully requests the following relief:

6 A. That Mr. Rubio be found in breach of contract, to have intentionally interfered

7 with Amazon’s contractual relationships with KDP authors, and to have committed an unfair or

8 deceptive act or practice in violation of Washington’s Consumer Protection Act;

9 B. That Mr. Rubio be found liable for, and ordered to pay, damages in an amount to

10 be proved in arbitration;

11 C. That Amazon be awarded treble damages and recover its reasonable attorneys’

12 fees pursuant to RCW 19.86.090; and

13 D. That Mr. Rubio be enjoined from further wrongful conduct against Amazon and

14 from interfering in its contractual and business relationships with KDP authors.

15

16 DATED this 6th day of September, 2017.

17 DAVIS WRIGHT TREMAINE LLP

Attorneys for Amazon Digital Services LLC
18

19 By s/ John A. Goldmark
John A. Goldmark, WSBA #40980
20 Tom Wyrwich, WSBA #45719
1201 Third Avenue, Suite 2200
21 Seattle, WA 98101-3045
Tel: (206) 622-3150; Fax: (206) 757-7700
22 Email: johngoldmark@dwt.com
tomwyrwich@dwt.com
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Davis Wright Tremaine LLP

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Suite 2200
1201 Third Avenue
Seattle, WA 98101-3045
206.622.3150 main · 206.757.7700 fax
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