Penguin settles with US states in e-book price-fixing lawsuit

Apple continues as a litigating defendant in the suits brought by the DOJ and the states

Penguin has settled with U.S. states in an e-book price-fixing lawsuit, leaving only Apple now in the fray.

Four other publishers accused of price-fixing with Apple settled earlier with the 33 states and territories and the U.S. Department of Justice. Penguin had earlier settled in December with the DOJ in a case that is currently scheduled to go to trial in U.S. District Court for the Southern District of New York on June 3.

Penguin said in a statement on Wednesday that it had reached an agreement with the US state attorneys general and private class plaintiffs to pay US$75 million in consumer damages plus costs and fees to resolve all antitrust claims relating to e-book pricing. It also committed to the states to abide by the same injunctive relief as previously agreed in its settlement with the DOJ.

Apple and the five publishers were accused of working together to raise prices of e-books, in retaliation for competitor Amazon.com pricing most e-books at $9.99 beginning in late 2007. The five publishers are Hachette Book Group, Macmillan, Penguin Group, HarperCollins Publishers and Simon & Schuster.

The investigations conducted by Connecticut and Texas, and the resulting litigation, have paved the way for recovery of about $164 million for consumers nationwide to date, Connecticut attorney general George Jepsen said in a statement. The agreement with Penguin gives e-book retailers greater freedom to reduce the prices of book titles, he added.

Defendants exercised their market power when they collectively increased the average price of trade e-books, DOJ said in a recent filing. Apple and the publishers are charged with promoting an agency model to sell e-books where the publisher would set the price or a price range for each e-book and the retailer, acting as an agent, would receive a commission on each e-book sale. The prevalent wholesale model generally gave retailers the flexibility to fix the prices.

Apple did not enter into or facilitate a conspiracy to eliminate price competition or raise prices in the e-book industry, the company said in a recent filing.

Concerned about Amazon.com's low pricing of e-books, some publishers had already considered pursuing in 2009 the agency model, and had taken measures such as "windowing," a practice of delaying e-book releases to benefit sales of hardcover editions, Apple said in a recent filing. Apple engaged in "individual, one-on-one, and at times contentious negotiations" over the draft contracts with each publisher throughout January 2010, it said in the filing, to support its claim that there had not been a conspiracy with the publishers.

Penguin's settlement with the states must be approved by the federal judge in New York before it can take effect.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags internetApplelegale-commerceantitrustpenguinInternet-based applications and services

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?