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E-book price-fixing: three publishers agree to pay $69 million to consumers

Hachette Book Group, HarperCollins, and Simon & Schuster say they will pay consumers to settle claims they conspired to fix e-book prices.

By Husna Haq / August 30, 2012

In a settlement that marks a major victory for the DOJ, three of the five publishing companies accused of conspiring to fix the prices of e-books have agreed to pay $69 million to consumers.

Shannon Stapleton/Reuters

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Big news in the Justice Department’s e-book price-fixing suit: Three of the five publishers accused of price-fixing – Hachette Book Group, HarperCollins, and Simon & Schuster – have agreed to pay $69 million to consumers to settle claims they illegally conspired to fix the price of e-books.

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The publishers will reimburse consumers who bought books between April 1, 2010 and May 12, 2012, a total of $69 million, with reimbursements ranging from 25 cents to $1.32 per book, according to the Baltimore Business Journal.

In announcing the settlement, Connecticut attorney general George Jepsen called the payout “restitution to customers who were harmed by this price-fixing scheme.”

The publishers must also pay $7.5 million in fees and costs to states.

“We will not tolerate publishers colluding to overcharge consumers millions of dollars for some of the most popular e-books,” John Suthers said in a statement.

A spokesperson for HarperCollins said, “HarperCollins did not violate antitrust laws but made a business decision to settle to avoid the expense and distraction of litigation.”

According to the settlement, the settling publishers must also terminate their existing agency pricing agreements (whereby publishers set the price of books rather than retailers, as in the wholesale model).

The settlement, which must still be approved by the US District Court, is a major victory for the Department of Justice, which brought a highly controversial lawsuit against five of the country’s largest publishers, and Apple, for allegedly conspiring to fix the price of e-books. While Hachette, HarperCollins, and Simon & Schuster agreed to settle early on, Apple, Macmillan, and Penguin vowed to fight the charges and a separate suit against is continuing.

It’s a highly controversial lawsuit (remember NY Sen. Chuck Schumer challenging the DOJ and charging that “the suit could wipe out the publishing industry as we know it”), and this settlement marks a major victory for the DOJ.

We’re eager to see how this settlement impacts the continuing suit against Apple, Macmillan, and Penguin.

Husna Haq is a Monitor correspondent.

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