Publishers ink $69 mn deal in ebook price-fixing case

Aug 30, 2012

US prosecutors announced Thursday that the top three US publishing houses have inked a $69 million deal to close the book on charges that they schemed to fix prices of digital titles.

Hachette Book Group, HarperCollins and Simon & Schuster Inc. have agreed to compensate ebook buyers to resolve antitrust claims, according to a joint statement by 55 attorneys general.

"While publishers are entitled to their profits, consumers are equally entitled to a fair and open marketplace," Connecticut Attorney General George Jepsen said in a statement.

"This settlement will provide restitution to those customers who were harmed by this price-fixing scheme, but it also will restore competition in the ebook market for consumers' long-term benefit."

The settlement was announced along with news that a civil antitrust lawsuit has been filed in US district court in New York state against the trio of publishers and others in the business.

Publishers "conspired and agreed to increase retail ebook prices for all consumers," according to court documents.

The settlement and the freshly-filed suit stem from a two-year antitrust investigation by the US Department of Justice and attorneys general in Connecticut and Texas, according to Jepsen.

cited evidence showing that publishers prevented retail price competition, resulting in buyers paying tens of millions of dollars more for ebooks.

"This action sends a strong message that this sort of anti-competitive behavior will not be accepted," Jepsen said.

The settlement deal, which requires court approval, calls for Hachette, HarperCollins and Simon & Schuster to compensate people who bought ebooks from April 2010 to May 21, 2012 priced on an "agency" model.

The have also agreed to terminate existing agreements with retailers such as Amazon and Barnes & Noble, freeing them to cut ebook prices.

A case against Apple and "non-settling" publishers Penguin and Macmillan is pending in US district court in New York, according to Jepsen.

The US lawsuit said the publishers conspired with Apple to end the longstanding "wholesale model" in which ebooks were sold to retailers, which had the power to set their own prices.

They replaced this with a so-called "agency model" where publishers would set prices charged by retailers for the ebooks. Under the arrangement, Apple was guaranteed a 30 percent commission on each ebook sold.

Prior to the introduction of Apple's iPad, online retail giant Amazon sold electronic versions of many new best sellers for $9.99.

After the agency model was adopted, the prices rose to $12.99 and higher, the suit said, and price competition among retailers was "unlawfully eliminated."

Explore further: Alibaba steals Yahoo's thunder ahead of IPO

add to favorites email to friend print save as pdf

Related Stories

US defends suit on Apple, e-books amid criticism

Jul 23, 2012

US antitrust authorities Monday defended their lawsuit accusing Apple and major publishers of a price-fixing conspiracy on e-books, saying the action is "in the public interest."

Apple denies e-book pricing conspiracy

Apr 13, 2012

Apple denied a charge that it schemed with publishers to hike prices for e-books, portraying itself as a hero for prying Amazon's "monopolistic grip" from the market.

US class-action ebook price-fixing suit can proceed

May 15, 2012

A judge Tuesday allowed a class-action case to proceed against Apple and six publishing houses alleging a price-fixing scheme for electronic books, citing "ample" indications of a conspiracy.

Recommended for you

New US-Spanish firm says targets rich mobile ad market

4 hours ago

Spanish telecoms firm Telefonica and US investment giant Blackstone launched a mobile telephone advertising venture on Wednesday, challenging internet giants such as Google and Facebook in a multi-billion-dollar ...

Technip, Heerema win third giant Angolan oil contract

7 hours ago

The ultra-deep Angolan offshore oil project called Kaombo generated the third huge contract in three days on Wednesday when French group Total picked two firms to carry out underwater engineering worth $3.5 billion.

Yahoo sees signs of growth in 'core' (Update)

22 hours ago

Yahoo reported a stronger-than-expected first-quarter profit Tuesday, results hailed by chief executive Marissa Mayer as showing growth in the Web giant's "core" business.

User comments : 0

More news stories

Quantenna promises 10-gigabit Wi-Fi by next year

(Phys.org) —Quantenna Communications has announced that it has plans for releasing a chipset that will be capable of delivering 10Gbps WiFi to/from routers, bridges and computers by sometime next year. ...

Floating nuclear plants could ride out tsunamis

When an earthquake and tsunami struck the Fukushima Daiichi nuclear plant complex in 2011, neither the quake nor the inundation caused the ensuing contamination. Rather, it was the aftereffects—specifically, ...

Unlocking secrets of new solar material

(Phys.org) —A new solar material that has the same crystal structure as a mineral first found in the Ural Mountains in 1839 is shooting up the efficiency charts faster than almost anything researchers have ...

Patent talk: Google sharpens contact lens vision

(Phys.org) —A report from Patent Bolt brings us one step closer to what Google may have in mind in developing smart contact lenses. According to the discussion Google is interested in the concept of contact ...

How kids' brain structures grow as memory develops

Our ability to store memories improves during childhood, associated with structural changes in the hippocampus and its connections with prefrontal and parietal cortices. New research from UC Davis is exploring ...