Book publishers reach $69M settlement in e-book price-fixing case

By on August 31, 2012, 9:00 AM

Three book publishers have agreed to an anti-trust settlement that will see them collectively pay more than $69 million in order to resolve charges that they collaborated with Apple to raise the prices of digitally-distributed books. Hachette Book Group, HarperCollins Publishers and Simon & Schuster are among the original group that has settled: Apple, MacMillan and Penguin Group weren’t included in this agreement.

The settlement was reached with the attorneys general of 54 US states, districts and territories. Furthermore, these three publishers must allow online retailers to set prices for e-books as they see fit moving forward.

The Department of Justice notified Apple and five major book publishers in March about plans to file an antitrust lawsuit against them if they didn’t change business practices with regards to e-book pricing. The move was spurred by a European Commission investigation into the matter in December 2011. The DOJ followed through on their promise, filing a lawsuit in April 2012.

The issue relates to alleged meetings that Apple had with the book publishers before the first iPad was released. Apple wanted book publishers to adopt an “agency model” where they would be able to set their own prices for titles in Apple’s online book store. Digital book sales up until that point had worked on a “wholesale model” where publishers would sell books to stores and it was up to the store to price the books as they saw fit.

Publishers weren’t fond of the wholesale model because retailers like Amazon would often price best sellers for just $9.99, less than what they paid for them simply to gain a wider Kindle customer base. With an agreement with Apple, publishers were able to force other retailers into a similar deal or threaten to pull their catalogs. This resulted in consumers paying “tens of millions” of dollars more for e-books than they would otherwise have.

A large portion of the judgment will be given to customers affected by the price-fixing. Amazon, Apple, Barnes & Noble, Google and Sony will all be contacting customers in the near future regarding the settlement.




User Comments: 6

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Tygerstrike said:

Yep we knew Apple was evil. Old news. Good news is that every person who has purchased a online book will prolly be getting a few free ones. A bonus for consumers. Its unfortunate that Apple had to go and try and change the capitalistic system that the US runs on. Im guessing tho that Apple isnt going to be as fazed by this as most would think. They are still riding the Samsung Gravy Train.

Guest said:

So... YOU get sued for selling at a price that YOU decide for YOUR product? odd... if I make something, I damn well will sell it for whatever price I want, if you don't like my price, too bad, then don't buy it.

Guest said:

There is no gravy train as the US Samsung case will likely be thrown out due to the jury being, well ******. Apple hasnt collected any money and lets not forget that this was only for the US, and things in Europe are very different for Apple.

In the end even if Samsung loses the US case, they still made more money than what the jury awarded Apple and Samsung has become even more popular. Also Samsung still makes alot of parts for the iPad and iPhones(the deal is worth Billions). No matter what happens, Samsung still comes out on top.

MilwaukeeMike said:

So... YOU get sued for selling at a price that YOU decide for YOUR product? odd... if I make something, I damn well will sell it for whatever price I want, if you don't like my price, too bad, then don't buy it.

You missed this part. "With an agreement with Apple, publishers were able to force other retailers into a similar deal or threaten to pull their catalogs"

Tygerstrike said:

@ 2nd Guest.

Its enough of a boost to Apple that they immediatly went and filed to have specific Samsung phones banned. Altho the ruling is for a monetary sum and only for patent infringment, Apple used that ruling to try and gut Samsung. Half of the devices that Apple had listed are old phones. Very 2010. They were hot in 2010 and 2011 but not now.

Guest said:

$69M? Publishers don't care, especially if that is a collective amount.

But the underlying problem: how much of this goes to the consumers? None! I'm thankful we at least have antitrust, but there are still some serious issues.

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