Tarrytown, N.Y. – The locally based American Booksellers Association (ABA) and 26 independent bookstores dropped a federal antitrust lawsuit against New York-based Barnes & Noble Inc. and Ann Arbor, Mich.-based Borders Group Inc. in exchange for $4.7 million.

The small bookstores accused the two national chains of illegally using their size to demand discounts from publishers, a move they said undermined independent booksellers’ ability to compete.