August 23, 2014

Update: Publishers Agree To $69 Million Settlement For Ebook Buyers

From

This story has been updated to indicate that the proposed settlement in the state-led ebook antitrust case, which three publishers agreed to on August 29, has been approved by the court.

On September 6, U.S. District Judge Denise Cote approved a $69 million settlement to be awarded to consumers who purchased agency-priced ebooks between April 2010 and May 2012, as part of a state antitrust suit filed against HarperCollins, Hachette SA, and Simon & Schuster. Led by the Attorneys General of Connecticut and Texas, 49 states (excluding Minnesota) and 5 U.S. territories had accused the publishers of conspiring to fix ebook prices.

The three publishers are also working on a separate, federal antitrust settlement with the DOJ. In both the state and federal suits filed in April against Apple, Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster, the central argument has not hinged on the agency model itself—in which publishers set the price for a product that is then sold by a retailer. Instead, the DOJ and the states have argued that competing publishers were illegally working with one another, and with Apple, to set agency-model prices for ebooks.

“Competitors can’t join together and make agreements on price. We’re going to stop that,” Justice Department antitrust official Sharis Pozen said in an interview with the Wall Street Journal prior to the filing of the federal suit.

HarperCollins, Hachette, and Simon & Schuster quickly agreed to settle after the suits were filed. Macmillan and Penguin have continued to deny the charges of price fixing, and earlier this month, Apple demanded a trial in a strongly worded memo to the DOJ.

The settlement will be effective 30 days from approval, with varying levels of compensation distributed to each state. The three publishers will have one week to sever their agency model contracts with Apple, and 30 days to sign new contracts with retailers. The settlement affects all agency-priced ebooks sold during the period in question, so online retailers including Amazon, Barnes & Noble, Apple, Kobo, Google, and Sony have agreed to identify and contact customers eligible for restitution. According to an ABC News report, customers can receive payment via check or credit toward future ebook purchases.

“This action sends a strong message that this sort of anticompetitive behavior will not be accepted,” Connecticut Attorney General George Jepsen said in a prepared statement. “Through our ongoing litigation, we hope to provide additional restitution to consumers.”

 

Share
Matt Enis About Matt Enis

Matt Enis (menis@mediasourceinc.com; @matthewenis on Twitter) is Associate Editor, Technology for Library Journal.

Comments

  1. The settlement will be effective 30 days from approval, with varying levels of compensation distributed to each state.

Speak Your Mind

*

Notify me of followup comments via e-mail. You can also subscribe without commenting.