Reprinted from The Christian Science Monitor, By Husna Haq August 30, 2012
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.
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 andcharging 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.