Publishers to pay $69 million over e-book price-fixing allegations

The companies signed the agreement with 54 attorneys general across U.S. states, districts, and territories.

Apple isn't settling the e-book price-fixing suit with the attorneys general.
Apple isn't settling the e-book price-fixing suit with the attorneys general. Apple

Three major U.S. e-book publishers have agreed to a deal that will see them pay a significant sum for alleged e-book price-fixing.

Connecticut State Attorney General George Jepsen yesterday announced that he, "along with 54 attorneys general in other states, districts, and U.S. territories," have signed a $69 million deal with Hachette Book Group, HarperCollins Publishers, and Simon & Schuster (which is owned by CBS, the same company that publishes CNET) to settle antitrust claims over an alleged conspiracy to artificially inflate e-book prices.

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

Apple, which has also been cited in the federal government's investigation into the matter, did not settle with the attorneys general. Macmillan and Penguin also declined to settle with the attorneys general.

Earlier this year, the Justice Department announced that it was taking action against Apple and e-book publishers over instituting the so-called "agency model," allowing publishers to set the price on their titles. The move resulted in higher e-book pricing and quickly caught the attention of law-enforcement officials. Prior to the institution of the agency model, Amazon was selling e-books much closer to their wholesale price.

Apple co-founder Steve Jobs might have inadvertently called more attention to the agency model by telling his biographer Walter Isaacson last year that he offered the agency model -- and subsequent higher pricing -- to publishers.

"We told the publishers, 'We'll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway," Jobs told his biographer. "They went to Amazon and said, 'You're going to sign an agency contract or we're not going to give you the books.'"

Under the terms of this deal, the companies will pay consumers affected by the agency pricing 30 days after it's approved by the court. The consumers that will receive the cash made e-book purchases from the companies between April 1, 2010 and May 21, 2012, according to Jepsen.

The companies also agreed to end agency pricing they might currently have in place.

 

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